<PAGE> 1
SEMIANNUAL REPORT / APRIL 30 1999
AIM
GLOBAL FINANCIAL SERVICES FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
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[COVER IMAGE]
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THE BANKER AND HIS WIFE QUENTIN METSYS (1514)
THE WORLD'S EARLIEST BANKS CAME ABOUT WHEN PEOPLE PRE-
SENTED THEIR FORTUNES FOR SAFEKEEPING TO THOSE THEY COULD
TRUST, USUALLY GOLDSMITHS. THE GOLDSMITHS WOULD
ISSUE A NOTE THAT OFFERED TO PAY THE BEARER THE VALUE OF
THE COINS DEPOSITED. THESE NOTES WERE OFTEN EXCHANGED AND
CIRCULATED, RATHER THAN CASHED IN, AND THE GOLDSMITHS
PROFITED BY CHARGING INTEREST ON THE LOANS THEY GRANTED
USING THE GOLD AND SILVER IN THEIR POSSESSION.
-------------------------------------
AIM Global Financial Services Fund is for shareholders seeking long-term growth
of capital by investing primarily in the equity securities of financial-services
companies, including those engaged in banking, insurance, investment management,
brokerage and diversified financial activities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Financial Services Fund (formerly GT Global Financial Services
Fund) performance figures are historical and reflect reinvestment of all
distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund's Class B and Class C shares will differ from
that of Class A shares due to differences in sales charge structure and
expenses.
o Because Class C shares have been offered for less than one year (since
3/1/99), all total return figures for Class C shares reflect cumulative
total return that has not been annualized.
o Beginning March 1, 1999, Advisor Class shares were closed to new investors.
o For periods ended April 30, 1999, average annual total returns including
sales charges are as follows: Class A shares: since inception (5/31/94),
17.74%; 1 year, 12.96%. Class B shares: since inception (5/31/94), 18.12%; 1
year, 13.03%. Class C shares: since inception (3/1/99), 18.20%. Advisor
Class Shares: since inception (6/1/95), 25.58%; 1 year 19.26%.
o The Fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in
the value of the U.S. dollar relative to the values of other currencies, the
custody arrangements made for the Fund's foreign holdings, differences in
accounting, political risks and the lesser degree of public information
required to be provided by non-U.S. companies.
o Investing in a single-sector mutual fund involves greater risk and potential
reward than investing in a more diversified fund.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The MSCI Banking Index is a group of unmanaged banking industry securities
from the world's developed markets tracked by Morgan Stanley Capital
International.
o The MSCI World Index is a group of unmanaged global securities listed on
major world stock exchanges tracked by Morgan Stanley Capital International.
o The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group of
unmanaged securities widely regarded by investors to be representative of
the stock market in general. Results shown assume the reinvestment of
dividends.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY. THERE IS A RISK THAT YOU
COULD LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the Fund.
AIM GLOBAL FINANCIAL SERVICES FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable.
Chairman of During March and April, AIM participated in an
the Board of industrywide test that gave us a chance to see how our
THE FUND technology systems might be affected by the changeover to
APPEARS HERE] the year 2000 (Y2K). Everything went as well as we had
hoped; in general, the industry sailed through the testing
process with flying colors. The financial industry has been
seen as a leader in planning for year 2000 concerns. Thus,
it was no surprise to most participants that the test was an
overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in
the United States and to follow transactions through a
typical trading cycle--from order entry to the settlement process. Investment
banks, broker-dealers, custodian banks and mutual fund companies all worked
together to make this possible. Approximately 400 firms were involved in the
testing; AIM was one of 70 asset managers.
TEST RESULTS EXCELLENT
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. During 1998, we made substantial progress on
our preparations. We are now in the final phases of the project, continually
testing internal applications and our interfaces with outside parties. On the
investment side, our portfolio management staff is evaluating the Y2K
preparedness of the companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if there are
unexpected problems. Our plans will give AIM employees guidelines to follow for
a wide variety of situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
AIM Investor Line at 800-246-5463 or at our Web site. Thank you for your
continued participation in The AIM Family of Funds--Registered Trademark--. We
appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
-------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
-------------------------------------
AIM GLOBAL FINANCIAL SERVICES FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FINANCIAL STOCKS MAKE A COMEBACK
FINANCIAL STOCKS WERE SOME OF THOSE HARDEST HIT DURING LAST YEAR'S MARKET
DOWNTURN. HOW DID AIM GLOBAL FINANCIAL SERVICES FUND PERFORM DURING THE
REPORTING PERIOD?
Since our last report, the Fund's performance has improved markedly due to a
strong rebound in financial stocks and a strong U.S. economy.
For the six-month period ended April 30, 1999, the Fund posted a total
return of 40.32% for Class A shares and 39.93% for Class B shares, excluding
sales charges. Advisor Class shares finished the reporting period with a total
return of 40.69%. Those results finished soundly ahead of the MSCI World Index,
which had a return of 19.57% for the same period. The Fund also outperformed the
MSCI Banking Index, which posted a return of 23.61%.
Class C shares of the Fund, which commenced sales on March 1, 1999, had a
cumulative total return of 19.20% since that date, excluding sales charges.
===============================================================================
FUND BEATS INDEXES
For the six-month period ended 4/30/99,
excluding sales charges
- -------------------------------------------------------------------------------
CLASS A SHARES 40.32%
CLASS B SHARES 39.93%
MSCI BANKING INDEX 23.61%
MSCI WORLD INDEX 19.57%
Past performance is no guarantee of comparable future results.
===============================================================================
WHAT WAS THE MARKET ENVIRONMENT LIKE DURING THE REPORTING PERIOD?
Global markets rebounded in late 1998 largely due to a global credit easing
initiated by the Federal Reserve Board's (the Fed) rate cuts in the United
States. The Fed's moves helped buoy stocks and halt the downward spiral that
started in Asia and gave emerging markets-and the global financial system-a big
scare last summer.
The United States continues to see strong economic growth, stable prices for
goods and services, record low unemployment and stable lending rates. The U.S.
economy grew at a rate of 4.5% during the first quarter of 1999, with inflation
below 1%. In his semiannual report on monetary policy and the economy, Fed
Chairman Alan Greenspan said the Fed would need to re-evaluate the interest-rate
situation now that some stability has returned to world financial markets.
HOW WERE THINGS IN EUROPE?
The debut of Europe's new common currency, the euro, at the beginning of 1999
went smoothly. However, the euro has lost ground against the dollar since its
issuance and continues to lag. Europe has been enveloped in an economic
malaise-the European Central Bank (ECB) seems to be divided on the cause of and
cure for Europe's slump. The ECB cut the euro-zone discount interest rate on
April 8, and while inflation is low in the region, economists are concerned
about the economic outlook because of widely varying growth rates among the
euro-zone countries.
WHAT HAS BEEN HAPPENING WITH FINANCIAL STOCKS?
Financial-services stocks, which fell more sharply than the market as a whole
last year, at first recovered more quickly, but have since lagged the market
slightly. However, the U.S. financial sector continued to shine during the first
part of 1999, driven by benign interest rates and strong consumer spending. We
currently believe that financial-services stocks are likely to produce stronger
percentage earnings growth during 1999 than the market as a whole (as
represented by the S&P 500).
The output of financial services has exploded in recent years with increased
lending to customers, more ATM usage and rising mortgage activity. The financial
sector has generated almost 18% of total U.S. corporate profits in the 1990s,
and financial-services firms are some of the biggest high-tech users in the
world. However, there is definitely less enthusiasm for banks and brokerages
with global reach because of the deep losses many of those companies endured in
1998.
The trend of consolidation in the financial-services industry continued with
the purchase of BankBoston by Fleet Financial Group to create the eighth largest
bank in the United States. We also saw a continuation of the trend of European
companies buying U.S. household-name firms, such as
PORTFOLIO COMPOSITION
As of 4/30/99, based on total net assets
===============================================================================
TOP 10 EQUITY HOLDINGS
- -------------------------------------------------------------------------------
1. Knight/Trimark Group, Inc. - Class A 4.54%
2. Citigroup Inc. 3.98
3. Providian Financial Corp. 3.89
4. Freddie Mac 2.45
5. Chase Manhattan Corp. (The) 2.44
6. TeleBanc Financial Corp. 2.43
7. Fannie Mae 2.26
8. Alliance Capital Management L.P. 2.16
9. Marsh & McLennan Co. 2.14
10. Investors Financial Services Corp. 2.10
The Fund's portfolio is subject to change, and there is no assurance that the
Fund will continue to hold any particular security.
===============================================================================
See important Fund and index disclosures inside front cover.
AIM GLOBAL FINANCIAL SERVICES FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
the acquisition of U.S.-based Bankers Trust by Germany's Deutsche Bank. We
believe accelerated consolidation will persist around the world.
HOW WAS THE FUND POSITIONED DURING THE REPORTING PERIOD?
We were well positioned for the recovery in financial stocks because we felt
stocks had been oversold during the market downturn. That led us to hold large
positions in companies where we saw continued strong earnings growth, high
probability of positive revisions to earnings estimates, and stock declines in
spite of recent positive earnings surprises. We attribute our strong performance
during the last six months to our momentum strategy of buying those kinds of
stocks.
WHAT ARE SOME COMPANIES YOU LIKED?
Here in the United States, we see continued gross domestic product growth and
flat-to-falling interest rates. This, coupled with lower personal bankruptcy
rates and improving asset quality, makes credit-card banks the place to be.
Examples of stocks we own include Providian Financial, American Express, Capital
One Financial, Metris Companies and MBNA.
The Fund also emphasized financial-services companies profiting from
Internet growth and mortgage-finance companies benefiting from new home sales,
refinancing and the strong economy. Examples of Internet-related holdings
include Charles Schwab, the dominant on-line trading broker; Knight/Trimark, a
securities broker that reaches potential customers via online advertising; and
TeleBanc Financial, the largest electronic bank in the United States.
The Fund's mortgage-finance holdings include bellwether stocks Fannie Mae
and Freddie Mac. For more on these companies, see the sidebar.
We have made some purchases in the insurance industry where earnings have
been coming in a bit higher than expected. Examples of those holdings are AFLAC,
Marsh & McLennan and Jefferson-Pilot.
HOW IS THE FUND WEIGHTED GEOGRAPHICALLY?
The Fund is slightly more than 75% invested in the United States, which still
makes it slightly more global than its peers. Outside of the United States,
about 16% of the Fund is in Europe, primarily in countries such as Ireland, the
Netherlands and the United Kingdom. The non-U.S. holdings are mostly large,
European insurance and bank stocks such as Axa and Societe Generale in France,
Allied Irish Banks, Royal Bank of Scotland, and Lloyds TSB in the United
Kingdom.
WHAT IS YOUR OUTLOOK?
The outlook for financial stocks and for the Fund is bright. Interest rates and
inflation are likely to remain low, which should help the entire financial
sector. We also expect strong earnings reports to continue, particularly for
credit-card banks and Internet-related financial companies. We still think the
backdrop is positive for financial-services companies. The industry's average
earnings growth during the rest of the year may exceed overall market earnings
growth, and if that happens, financial-services stocks could outperform the
market as a whole.
FANNIE MAE AND FREDDIE MAC
You see these names in the financial pages of newspapers and Fund reports. But
do you know who Fannie Mae and Freddie Mac are?
Fannie Mae, formerly the Federal National Mortgage Association, was created
by Congress in 1938 to bolster the housing industry during the Depression. But
since 1968 Fannie Mae has operated with private capital on a self-sustaining
basis.
Fannie Mae does not lend money directly to home buyers. Instead, the agency
buys conventional and insured mortgages from lending institutions and agencies.
The lenders, in turn, can use that money to make more mortgages for more home
buyers. Fannie Mae also issues what are known as mortgage-backed securities
(MBS) in exchange for pools of mortgages from lenders. These MBS provide lenders
with a highly liquid asset to hold or sell on the open market.
Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, was
created in 1970. It essentially has the same function as Fannie Mae. The
difference is that Freddie Mac purchases residential mortgages from financial
institutions and packages them into securities to sell to investors in the
secondary mortgage market, that is, the market where mortgages are bought and
sold by various investors such as Fannie Mae, insurance companies and securities
dealers.
Shares of both Fannie Mae and Freddie Mac are traded on the New York Stock
Exchange. Neither agency is funded by the U.S. government, and both are among
the country's largest taxpayers.
===============================================================================
GEOGRAPHIC ALLOCATION
Asia 3.4%
Other 2.8%
Europe 16.5%
North America 76%
Latin America 1.3%
===============================================================================
See important Fund and index disclosures inside front cover.
AIM GLOBAL FINANCIAL SERVICES FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
OF FINANCE AND THE FED
A few words from Federal Reserve Board Chairman Alan Greenspan can send the
markets into a frenzy or calm them down.
Why? In 1998, a year of record volatility in stock and bond markets, when
investors and analysts alike seemed genuinely puzzled as to what to do next, the
Federal Reserve Board became a constant in the midst of the unsettling
environment.
WHAT IS THE FED?
The Federal Reserve Board, or "the Fed," consists of seven presidential
appointees including Chairman Greenspan. In addition to overseeing the country's
Federal Reserve System--the central bank of the United States--members of the
Fed serve on the Federal Open Market Committee (FOMC), which decides monetary
policy. Other FOMC members include the chairman of the New York Federal Reserve
Bank and four other FOMC seats that are rotated among the remaining 11 Federal
Reserve Banks.
The FOMC meets eight times a year. These meetings are preceded by the
release of the so-called "Beige Book" (see sidebar) and are always followed with
a great deal of interest because it is here that decisions on monetary policy
are made. The meetings traditionally feature reports on international and
domestic economic developments, conditions in financial markets, and forecasts
for the future. Policy options are then laid out and discussed, and a vote is
taken on whether the Fed will act, often by adjusting interest rates.
WHY ARE ADJUSTMENTS TO INTEREST RATES SO CLOSELY FOLLOWED?
Interest-rate changes by the Fed are important for several reasons: (1) they
frequently reflect economic trends; (2) they immediately affect bond markets;
(3) they usually affect the stock market because when rates are high, people
tend to be less apt to take on the greater risks of stocks; and (4) they often
have a trickle-down effect.
During 1998, the influence interest- rate changes could have on markets was
very visible. An interest-rate hike was considered early on when the U.S.
economy seemed in danger of overheating and sparking inflation. A rate hike
would have helped slow things down by making borrowing more expensive. Instead,
myriad financial difficulties abroad affected markets and slowed the U.S.
economy enough to persuade the Fed to lower the federal funds rate--the interest
rate banks charge each other for overnight credit--in September. When that rate
cut did little to calm markets and loosen credit in the United States, the Fed
cut both the federal funds rate and the discount rate--the interest rate at
which banks borrow emergency funds from the Federal Reserve--in October and set
off rallies in stock and bond markets. The Fed cut both interest rates again in
November 1998, citing continued strains in financial markets and spurring
another jump in the stock market as a whole.
Consumers feel the effect of interest-rate adjustments as they trickle down
through the banking system. Rate cuts by the Fed often prompt rate reductions on
THE BEIGE BOOK
WHAT IS THE BEIGE BOOK?
The Beige Book report is published about two weeks before each FOMC meeting. The
report contains anecdotal data on current economic conditions in each Federal
Reserve Bank district, summarizing the information by district and sector.
Interviews with key business people, economists, market experts and other
sources supply the details for the report. You can find out more about the Fed's
Beige Book and other interesting topics by visiting the Fed's Web site at
www.bog.frb.fed.us.
AIM GLOBAL FINANCIAL SERVICES FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
home mortgages, car loans, and variable-rate credit cards. Conversely, rate
hikes usually make all forms of loans more expensive.
Although the Fed does not directly control the financial markets, its
influence over short-term interest rates makes it a potent force.
WHAT ELSE DOES THE FED DO?
The Fed is an integral part of the Federal Reserve System (FRS), created by
Congress in 1913. The FRS includes 12 regional Federal Reserve Banks in New
York, Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis,
Philadelphia, Richmond, St. Louis and San Francisco. A Federal Reserve Bank
o clears checks,
o lends money to banks needing emergency reserves,
o issues currency, and
o holds reserve deposits of member banks.
A bank must hold a percentage of its loans as liquid reserves, meaning
readily available. The Fed decides what this percentage will be and can lower it
to inject more money into the economy or raise it to tighten credit.
The Fed also determines the margin requirements for securities investors and
traders and which securities may be purchased on margin. (Margin is the minimum
amount of cash that a customer is required to deposit on the purchase of
securities.) Known as Regulation T, this rule prevents the overextension of
credit in securities transactions.
While these other functions of the Federal Reserve System do not generate as
many headlines as its interest-rate moves, they are crucial to the Fed's purpose
of keeping the nation's banking system safe, flexible and stable.
FED RATE CUTS AND THE DOW
WEEKLY CLOSES, DOW JONES INDUSTRIAL AVERAGE*
7/3/98-12/31/98
===============================================================================
1998DJIA DOW Close
7/10/98 9105.74
7/17/98 9337.97
7/24/98 8937.36
7/31/98 8883.29
8/7/98 8598.02
8/14/98 8425
8/21/98 8533.66
8/28/98 8051.68
9/4/98 7640.25
9/11/98 7795.5
9/18/98 7895.66
9/25/98 8028.77
10/2/98 7784.69
10/9/98 7899.52
10/16/98 8416.76
10/23/98 8452.29
10/30/98 8592.1
11/6/98 8975.46
11/13/98 8919.59
11/20/98 9159.55
11/27/98 9333.08
12/4/98 9016.14
12/11/98 8821.76
12/18/98 8903.63
12/24/98 9217.99
12/31/98 9181.43
===============================================================================
This graph shows the weekly closing levels for the Dow from July 3 through
December 31, 1998. While the Fed does not control the Dow, which is affected by
innumerable factors, its influence is clearly reflected in the index's behavior.
* The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
===============================================================================
AIM GLOBAL FINANCIAL SERVICES FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-68.54%
BANKS (MAJOR REGIONAL)-4.29%
BankBoston Corp. 27,000 $ 1,323,000
- --------------------------------------------------------------
Mellon Bank Corp. 14,800 1,099,825
- --------------------------------------------------------------
State Street Corp. 8,800 770,000
- --------------------------------------------------------------
Wells Fargo Co. 22,500 971,719
- --------------------------------------------------------------
4,164,544
- --------------------------------------------------------------
BANKS (MONEY CENTER)-5.07%
BankAmerica Corp. 24,143 1,738,296
- --------------------------------------------------------------
Chase Manhattan Corp. (The) 28,600 2,366,650
- --------------------------------------------------------------
J.P. Morgan & Co. Inc. 6,100 821,975
- --------------------------------------------------------------
4,926,921
- --------------------------------------------------------------
BANKS (REGIONAL)-6.04%
City National Corp. 43,350 1,674,394
- --------------------------------------------------------------
First Tennessee National Corp. 19,100 823,687
- --------------------------------------------------------------
North Fork Bancorporation, Inc. 30,000 675,000
- --------------------------------------------------------------
UnionBanCal Corp. 28,200 962,325
- --------------------------------------------------------------
UST Corp. 19,300 466,819
- --------------------------------------------------------------
Wood Bancorp, Inc. 23,600 460,200
- --------------------------------------------------------------
Zions Bancorp 12,100 806,919
- --------------------------------------------------------------
5,869,344
- --------------------------------------------------------------
CONSUMER FINANCE-10.50%
Capital One Financial Corp. 10,100 1,754,244
- --------------------------------------------------------------
Countrywide Credit Industries, Inc. 18,500 838,281
- --------------------------------------------------------------
Doral Financial Corp. 40,000 705,000
- --------------------------------------------------------------
Investors Financial Services Corp. 56,100 2,040,637
- --------------------------------------------------------------
MBNA Corp. 38,500 1,085,219
- --------------------------------------------------------------
Providian Financial Corp. 29,300 3,781,531
- --------------------------------------------------------------
10,204,912
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.19%
General Electric Co. 11,000 1,160,500
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-12.45%
American Express Co. 12,500 1,633,594
- --------------------------------------------------------------
Associates First Capital Corp.-Class A 28,300 1,254,044
- --------------------------------------------------------------
Citigroup Inc. 51,425 3,869,731
- --------------------------------------------------------------
Fannie Mae 31,000 2,199,062
- --------------------------------------------------------------
Freddie Mac 37,900 2,378,225
- --------------------------------------------------------------
UniCaptial Corp.(a) 122,100 763,125
- --------------------------------------------------------------
12,097,781
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-3.90%
AFLAC Inc. 18,500 1,003,625
- --------------------------------------------------------------
Conseco, Inc. 38,855 1,226,361
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
INSURANCE (LIFE/HEALTH)-(CONTINUED)
Equitable Companies, Inc. 6,900 $ 464,456
- --------------------------------------------------------------
Jefferson-Pilot Corp. 16,200 1,091,475
- --------------------------------------------------------------
3,785,917
- --------------------------------------------------------------
INSURANCE (MULTI-LINE)-3.35%
American International Group, Inc. 12,890 1,513,711
- --------------------------------------------------------------
Lincoln National Corp. 4,900 470,706
- --------------------------------------------------------------
Transamerica Corp. 17,800 1,268,250
- --------------------------------------------------------------
3,252,667
- --------------------------------------------------------------
INSURANCE BROKERS-2.14%
Marsh & McLennan Co. 27,100 2,074,844
- --------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-3.89%
Merrill Lynch & Co., Inc. 8,100 679,894
- --------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 13,100 1,299,356
- --------------------------------------------------------------
Schwab (Charles) Corp. 16,450 1,805,387
- --------------------------------------------------------------
3,784,637
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-6.71%
Alliance Capital Management L.P. 75,800 2,103,450
- --------------------------------------------------------------
Knight/Trimark Group, Inc.-Class
A(a) 28,800 4,411,800
- --------------------------------------------------------------
6,515,250
- --------------------------------------------------------------
SAVINGS & LOAN COMPANIES-5.22%
Golden West Financial Corp. 10,000 1,001,250
- --------------------------------------------------------------
GreenPoint Financial Corp. 48,884 1,710,940
- --------------------------------------------------------------
TeleBanc Financial Corp.(a) 22,800 2,362,650
- --------------------------------------------------------------
5,074,840
- --------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-1.02%
Metris Companies Inc. 16,240 992,670
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.29%
Avis Rent A Car, Inc.(a) 50,400 1,581,300
- --------------------------------------------------------------
Hertz Corp.-Class A 10,800 644,625
- --------------------------------------------------------------
2,225,925
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.48%
Paychex, Inc. 9,100 464,669
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $46,636,127) 66,595,421
- --------------------------------------------------------------
FOREIGN STOCKS-23.66%
CANADA-0.96%
Newcourt Credit Group, Inc. (Savings
& Loan Companies) 33,500 936,300
- --------------------------------------------------------------
FRANCE-2.75%
AXA S.A. (Insurance-Multi-Line) 13,150 1,697,802
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
FRANCE-(CONTINUED)
Banque Nationale de Paris
(Banks-Major Regional) 5,500 $ 455,875
- --------------------------------------------------------------
Societe Generale (Banks-Major
Regional) 2,900 519,041
- --------------------------------------------------------------
2,672,718
- --------------------------------------------------------------
HONG KONG-1.69%
Aeon Credit Service Co. Ltd.
(Consumer Finance) 5,992,000 1,642,809
- --------------------------------------------------------------
Peregrine Investments Holdings Ltd.
(Investment Banking/Brokerage)(a) 532,000 69
- --------------------------------------------------------------
1,642,878
- --------------------------------------------------------------
IRELAND-4.79%
Allied Irish Banks PLC
(Banks-Regional) 128,043 2,066,088
- --------------------------------------------------------------
Anglo Irish Bank Corp. PLC
(Banks-Regional) 334,360 989,646
- --------------------------------------------------------------
Bank of Ireland (Banks-Regional) 79,800 1,597,729
- --------------------------------------------------------------
4,653,463
- --------------------------------------------------------------
ISRAEL-1.19%
Bank Haopalim (Banks-Money Center) 483,000 1,154,040
- --------------------------------------------------------------
ITALY-1.85%
Banca Commerciale Italiana
(Banks-Major Regional) 67,800 558,030
- --------------------------------------------------------------
Credito Italiano S.p.A. (Banks-Major
Regional) 81,400 412,815
- --------------------------------------------------------------
San Paolo-IMI S.p.A. (Banks-Major
Regional) 55,000 825,165
- --------------------------------------------------------------
1,796,010
- --------------------------------------------------------------
JAPAN-1.69%
Nikko Securities Co., Ltd. (The)
(Investment Banking/Brokerage) 94,000 539,167
- --------------------------------------------------------------
Nomura Securities Co. Ltd.
(Finance-Asset Management)(a) 37,000 399,045
- --------------------------------------------------------------
Shohkoh Fund & Co.
(Financial-Diversified) 1,200 703,370
- --------------------------------------------------------------
1,641,582
- --------------------------------------------------------------
NETHERLANDS-2.99%
ABN AMRO Holding N.V. (Banks-Major
Regional) 41,000 976,833
- --------------------------------------------------------------
Athlon Groep N.V. (Retail-General
Merchandise) 32,900 910,725
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
NETHERLANDS-(CONTINUED)
ING Groep N.V. (Insurance Brokers) 16,559 $ 1,019,982
- --------------------------------------------------------------
2,907,540
- --------------------------------------------------------------
PANAMA-1.31%
Banco Latinoamericano de
Exportaciones, S.A.
(Banks-Regional) 40,000 1,275,000
- --------------------------------------------------------------
SPAIN-0.59%
Banco de Santander (Banks-Regional) 26,500 575,651
- --------------------------------------------------------------
SWITZERLAND-1.00%
UBS A.G. (Banks-Major Regional) 2,850 967,621
- --------------------------------------------------------------
UNITED KINGDOM-2.28%
Lloyds TSB Group PLC (Banks-Major
Regional) 43,050 692,849
- --------------------------------------------------------------
National Westminister Bank PLC
(Banks-Major Regional) 20,000 481,615
- --------------------------------------------------------------
Royal Bank of Scotland Group PLC
(Banks-Major Regional)(a) 44,000 1,037,611
- --------------------------------------------------------------
2,212,075
- --------------------------------------------------------------
URUGUAY-0.57%
Banco Comercial S.A.-GDR
(Banks-Regional)(a)(b) 16,500 297,000
- --------------------------------------------------------------
Banco Comercial S.A.-GDR
(Banks-Regional)(b)(c)
(Acquired 01/13/95-05/07/96; Cost
$174,788) 14,000 252,000
- --------------------------------------------------------------
549,000
- --------------------------------------------------------------
Total Foreign Stocks (Cost
$18,138,750) 22,983,878
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
REPURCHASE AGREEMENT-6.21%(D)
State Street Bank & Trust Co.,
4.85%, 05/03/99(e) (Cost
$6,036,000) $6,036,000 6,036,000
- --------------------------------------------------------------
TOTAL INVESTMENTS-98.41% 95,615,299
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.59% 1,544,443
- --------------------------------------------------------------
NET ASSETS-100.00% $97,159,742
==============================================================
</TABLE>
Investment Abbreviations:
GDR - Global Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Security fair valued in accordance with procedures established by the Board
of Directors.
(c) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The market
value of this security at 04/30/99 represented 0.26% of the Fund's net
assets.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value is at least 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Repurchase agreement entered into 04/30/99 with a maturing value of
$6,036,000. Collateralized by $4,915,000 U.S. Treasury Note, 11.625% due
11/15/02 with a market value at 04/30/99 of $6,162,181.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $70,810,877) $95,615,299
- ------------------------------------------------------------
Foreign currencies, at value (cost $1,621,875) 1,620,161
- ------------------------------------------------------------
Cash 560
- ------------------------------------------------------------
Receivables for:
Investments sold 477,068
- ------------------------------------------------------------
Forward contracts 9,900
- ------------------------------------------------------------
Fund shares sold 275,608
- ------------------------------------------------------------
Dividends and interest 128,790
- ------------------------------------------------------------
Other assets 32,562
- ------------------------------------------------------------
Total assets 98,159,948
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 574,654
- ------------------------------------------------------------
Forward contracts 12,747
- ------------------------------------------------------------
Fund shares reacquired 304,512
- ------------------------------------------------------------
Accrued advisory fees 14,694
- ------------------------------------------------------------
Accrued administrative services fees 2,125
- ------------------------------------------------------------
Accrued distribution fees 65,334
- ------------------------------------------------------------
Accrued transfer agent fees 15,970
- ------------------------------------------------------------
Accrued trustees' fees 2,065
- ------------------------------------------------------------
Accrued operating expenses 8,105
- ------------------------------------------------------------
Total liabilities 1,000,206
- ------------------------------------------------------------
Net assets applicable to shares outstanding $97,159,742
- ------------------------------------------------------------
NET ASSETS:
Class A $33,100,561
============================================================
Class B $54,399,665
============================================================
Class C $ 193,616
============================================================
Advisor Class $ 9,465,900
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 1,387,218
============================================================
Class B 2,330,597
============================================================
Class C 8,295
============================================================
Advisor Class 391,933
============================================================
Class A:
Net asset value and redemption price per
share $ 23.86
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $23.86
divided by 95.25%) $ 25.05
============================================================
Class B:
Net asset value and offering price per share $ 23.34
============================================================
Class C:
Net asset value and offering price per share $ 23.34
============================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 24.15
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends income (net of $25,685 foreign
withholding tax) $ 608,271
- ------------------------------------------------------------
Interest 138,593
- ------------------------------------------------------------
Securities lending 27,022
- ------------------------------------------------------------
Total investment income 773,886
- ------------------------------------------------------------
EXPENSES:
Advisory fees 439,123
- ------------------------------------------------------------
Administrative services fees 12,694
- ------------------------------------------------------------
Custodian fees 25,406
- ------------------------------------------------------------
Distribution fees -- Class A 75,587
- ------------------------------------------------------------
Distribution fees -- Class B 252,808
- ------------------------------------------------------------
Distribution fees -- Class C 70
- ------------------------------------------------------------
Trustees' fees 5,586
- ------------------------------------------------------------
Transfer agent fees -- Class A 44,888
- ------------------------------------------------------------
Transfer agent fees -- Class B 75,054
- ------------------------------------------------------------
Transfer agent fees -- Class C 27
- ------------------------------------------------------------
Transfer agent fees -- Advisor Class 13,746
- ------------------------------------------------------------
Other 126,494
- ------------------------------------------------------------
Total expenses 1,071,483
- ------------------------------------------------------------
Less: Expenses paid indirectly (469)
- ------------------------------------------------------------
Fees waived by advisor (75,914)
- ------------------------------------------------------------
Net expenses 995,100
- ------------------------------------------------------------
Net investment income (loss) (221,214)
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
AND FORWARD CONTRACTS:
Net realized gain (loss) from:
Investment securities 15,892,866
- ------------------------------------------------------------
Foreign currencies (48,066)
- ------------------------------------------------------------
Forward contracts (286,296)
- ------------------------------------------------------------
15,558,504
- ------------------------------------------------------------
Net unrealized appreciation of:
Investment securities 15,212,325
- ------------------------------------------------------------
Foreign currencies 284,071
- ------------------------------------------------------------
Forward contracts 16
- ------------------------------------------------------------
15,496,412
- ------------------------------------------------------------
Net gain from investment securities, foreign
currencies, and forward contracts 31,054,916
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $30,833,702
============================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 1999 and the year ended October 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1999 1998
------------ -----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (221,214) $ 140,505
- -----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, and forward contracts 15,558,504 (702,889)
- -----------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currencies, and forward contracts 15,496,412 1,398,601
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 30,833,702 836,217
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (27,914) (11,044)
- -----------------------------------------------------------------------------------------
Class B -- (16,883)
- -----------------------------------------------------------------------------------------
Advisor Class (62,446) (2,239)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (50,561) (1,099,618)
- -----------------------------------------------------------------------------------------
Class B (88,384) (1,681,050)
- -----------------------------------------------------------------------------------------
Advisor Class (16,133) (222,890)
- -----------------------------------------------------------------------------------------
Share transactions-net:
Class A (5,801,941) (847,176)
- -----------------------------------------------------------------------------------------
Class B (11,383,447) 2,731,796
- -----------------------------------------------------------------------------------------
Class C 188,021 --
- -----------------------------------------------------------------------------------------
Advisor Class (2,926,139) 5,846,237
- -----------------------------------------------------------------------------------------
Net increase in net assets 10,664,758 5,533,350
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 86,494,984 80,961,634
- -----------------------------------------------------------------------------------------
End of period $ 97,159,742 $86,494,984
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 58,421,592 $78,345,098
- -----------------------------------------------------------------------------------------
Undistributed net investment income (loss) (222,583) 88,991
- -----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, and forward contracts 14,158,317 (1,245,109)
- -----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, and forward contracts 24,802,416 9,306,004
- -----------------------------------------------------------------------------------------
$ 97,159,742 $86,494,984
=========================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
April 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Financial Services Fund (the "Fund") is a separate series of AIM
Investment Funds (the "Trust"). The Trust is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end series management investment company consisting of
twelve separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers four different classes of shares:
Class A shares, Class B shares, Class C shares and Advisor Class shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares are sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class.
The Fund's investment objective is to achieve long-term growth of capital.
The Fund invests substantially all of its investable assets in Global Financial
Services Portfolio, (the "Portfolio"). The Portfolio is organized as a subtrust
of Global Investment Portfolio, a Delaware business trust which is registered
under the 1940 Act as an open-end management investment company.
The Portfolio has investment objectives, policies, and limitations
substantially identical to those of the Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
April 30, 1999, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or INVESCO (NY) Asset Management, Inc., which has a
nominal ($100) investment in the Portfolio.
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 and the Portfolio in the
preparation of the financial statements.
A. Security Valuations-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 last available bid.
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 closing bid price 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 New
York Stock Exchange ("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 the
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 the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities will be valued at their fair
value as determined in good faith by or under the supervision of the Board
of Trustees of the Trust.
B. Securities Transactions, Investment Income and Distributions-Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Such distributions are
declared and paid annually.
C. Federal Income Taxes-The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. The Fund has a capital loss
carryforward of $159,536 as of October 31, 1998 (which may be carried
forward to offset future taxable gains, if any) which expires, if not
previously utilized, in the year 2006.
10
<PAGE> 13
D. Expenses-Distribution and transfer agency expenses directly attributable to
a class of shares are charged to that class' operations. All other expenses
are allocated among the classes.
E. 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 $63,100. These expenses are being amortized on a
straightline basis over a five-year period.
F. Foreign Currency Translations-Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
G. Forward Foreign Currency Contracts-A forward foreign currency contract is an
obligation to purchase or sell a specific currency for an agreed-upon price
at a future date. The Portfolio may enter into a forward foreign currency
contract to attempt to minimize the risk to the Portfolio from adverse
changes in the relationship between currencies. The Portfolio may also enter
into a forward foreign currency contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in" the U.S.
dollar price of that security. The Portfolio could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
Outstanding forward foreign currency contracts at April 30, 1999 were as
follows:
<TABLE>
<CAPTION>
CONTRACT TO UNREALIZED
SETTLEMENT ----------------------- APPRECIATION
DATE DELIVER RECEIVE VALUE (DEPRECIATION)
- ---------- ---------- ---------- ---------- --------------
<C> <S> <C> <C> <C> <C>
07/23/99 CAD 994,000 $ 672,076 $ 682,159 $(10,083)
05/10/99 JPY 24,000,000 211,137 201,237 9,900
05/10/99 JPY 6,000,000 49,747 50,309 (562)
05/10/99 JPY 65,500,000 547,110 549,212 (2,102)
---------- ---------- --------
$1,480,070 $1,482,917 $ (2,847)
========== ========== ========
</TABLE>
H. 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 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
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 Portfolio
as unrealized gains or losses. When the contract is closed, the 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 Portfolio is that the change in value of
the underlying securities may not correlate to the change in value of the
contracts. The Portfolio may use futures contracts to manage its exposure to
the stock market and to fluctuations in currency values or interest rates.
I. 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 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.
In addition, the Portfolio's policy of concentrating its investments in
companies in the financial services industry subject the Portfolio to
greater risk than a Portfolio that is more diversified.
J. Indexed Securities-The 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.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's and the Portfolio's investment
manager and administrator. The Fund pays AIM administration fees at an
annualized rate of 0.25% of the Fund's average daily net assets. The Portfolio
pays AIM investment management and administration fees at an annual rate of
0.725% on the first $500 million of the Portfolio's average daily net assets,
plus 0.70% on the next $500 million of the Portfolio's average daily net assets,
plus 0.675% on the next $500 million of the Portfolio's average daily net
assets, plus 0.65% on the Portfolio's average daily net assets exceeding $1.5
billion. AIM has contractually agreed to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest, and extraordinary expense) to the
maximum annual rate of 2.00%, 2.50%, 2.50%, and 1.50% of the average daily net
assets of the Fund's Class A, Class B, Class C, and Advisor Class shares,
respectively. During the six months ended April 30, 1999, AIM waived fees of
$75,914.
A I M Fund Services, Inc. ("AFS") is the transfer agent of the Fund. The
Fund, pursuant to a transfer agency and service agreement, has agreed to pay AFS
a fee for providing transfer agency and shareholder services to the Fund. During
the six months ended April 30, 1999, AFS was paid $125,597 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B, Class C and Advisor Class
11
<PAGE> 14
shares of the Fund. The Trust has adopted distribution plans pursuant to Rule
12b-1 under the 1940 Act with respect to the Fund's Class A shares and Class C
shares (the "Class A and C Plan"), and the Fund's Class B shares (the "Class B
Plan") (collectively, the "Plans"). The Fund, pursuant to the Class A and C
Plan, pays AIM Distributors compensation at an annual rate of 0.50% of the
average daily net assets of the Class A shares and 1.00% of the average daily
net assets of the Class C shares. The Fund pursuant to the Class B Plan, pays
AIM Distributors compensation at an annual rate of 1.00% of the average daily
net assets of the Class B shares. Of these amounts, the Fund may pay a service
fee of 0.25% of the average daily net assets of the Class A, Class B or Class C
shares to selected dealers and financial institutions who furnish continuing
personal shareholder services to their customers who purchase and own the
appropriate class of shares of the Fund. Any amounts not paid as a service fee
under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. During the six months ended April
30, 1999, the Class A, Class B and Class C shares paid AIM Distributors $75,587,
$252,808 and $70, respectively, as compensation under the Plans.
AIM Distributors received commissions of $5,734 from sales of the Class A
shares of the Fund during the six months ended April 30, 1999. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. Certain officers and trustees of the
Trust are officers and directors of AIM, AIM Distributors and AFS.
AIM is the pricing and accounting agent for the Portfolio and the Fund. The
monthly fee for these services paid to AIM is a percentage, not to exceed 0.03%
annually, of a Fund's average daily net assets. The annual fee rate is derived
based on the aggregate net assets of the funds which comprise the following
investment companies: AIM Growth Series, AIM Investment Funds, AIM Series Trust,
G.T. Global Variable Investment Series and G.T. Global Variable Investment
Trust. The fee is calculated at the rate of 0.03% of the first $5 billion of
assets and 0.02% to the assets in excess of $5 billion. An amount is allocated
to and paid by each such fund based on its relative average daily net assets.
NOTE 3-INDIRECT EXPENSES
During the six months ended April 30, 1999, the Fund received reductions in
custodian fees of $469 under expense offset arrangements. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $469
during the six months ended April 30, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund, along with certain other funds advised and/or administered by AIM, has
a line of credit with BankBoston and State Street Bank & Trust Company. The
arrangements with the banks allow the Fund and certain other funds to borrow, on
a first come, first served basis, an aggregate maximum amount of $250,000,000.
The Fund is limited to borrowing up to 33 1/3% of the Fund's total assets.
Effective May 28, 1999, the above line of credit was superseded by the
Fund's participation in a committed line of credit facility with a syndicate
administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser
of (i) $975,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. The funds which are party to the
line of credit are charged a commitment fee of 0.09% on the unused balance of
the committed line. The commitment fee is allocated among the funds based on
their respective average net assets for the period.
NOTE 6-PORTFOLIO SECURITIES LOANED
At April 30, 1999, securities with an aggregate value of $2,923,690 were on loan
to brokers. The loans were secured by cash collateral of $3,154,738 received by
the Portfolio. For the six months ended April 30, 1999, the Portfolio received
fees of $27,022 for securities lending.
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 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.
12
<PAGE> 15
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the six months ended April 30, 1999
was $56,946,107 and $82,682,213, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, on a tax basis, as of April 30, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $26,034,045
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (1,531,086)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $24,502,959
===============================================================
</TABLE>
Cost of investments for tax purposes is $71,112,340.
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 1999 and the
year ended October 31, 1998 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 1999 OCTOBER 31, 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 630,497 $ 12,817,080 3,687,543 $ 67,971,118
- ----------------------------------------------------------------------------
Class B 418,758 8,233,675 2,101,129 37,907,965
- ----------------------------------------------------------------------------
Class C * 8,295 188,021 -- --
- ----------------------------------------------------------------------------
Advisor 10,284 219,117 563,080 10,164,684
- ----------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 4,035 73,215 54,738 960,105
- ----------------------------------------------------------------------------
Class B 4,616 82,070 76,614 1,322,362
- ----------------------------------------------------------------------------
Advisor 4,287 78,579 12,691 225,008
- ----------------------------------------------------------------------------
Reacquired:
Class A (914,802) (18,692,236) (3,795,511) (69,778,399)
- ----------------------------------------------------------------------------
Class B (1,012,742) (19,699,192) (2,061,758) (36,498,531)
- ----------------------------------------------------------------------------
Advisor (158,383) (3,223,835) (254,804) (4,543,455)
- ----------------------------------------------------------------------------
(1,005,155) $(19,923,506) 383,722 $ 7,730,857
============================================================================
</TABLE>
* Class C Shares commenced sales March 1, 1999.
13
<PAGE> 16
NOTE 9-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, MAY 31, 1994 TO
APRIL 30, ---------------------------------------- OCTOBER 31,
1999 1998(a) 1997(a) 1996(a) 1995(a) 1994(a)
--------- ------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.05 $ 17.22 $ 14.20 $ 11.92 $ 11.62 $ 11.43
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (0.03) 0.07 0.04 0.05(b) 0.17(c) 0.02(d)
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
Net realized and unrealized gain on investments 6.89 0.37 3.97 2.36 0.13 0.17
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
Net increase from investment operations 6.86 0.44 4.01 2.41 0.30 0.19
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
Distributions to shareholders:
From net investment income (0.02) (0.01) -- (0.12) -- --
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
From net realized gain on investments (0.03) (0.60) (0.99) (0.01) -- --
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
Total distributions (0.05) (0.61) (0.99) (0.13) -- --
- --------------------------------------------------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 23.86 $ 17.05 $ 17.22 $14.20 $ 11.92 $ 11.62
=================================================== ======= ======= ======= ======= ======= =======
Total return(e) 40.32% 2.53% 29.91% 20.21% 2.58% 1.66%
=================================================== ======= ======= ======= ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in 000's) $33,101 $28,433 $29,639 $ 7,302 $5,687 $3,175
=================================================== ======= ======= ======= ======= ======= =======
Ratio of net investment income (loss) to average net
assets:
With fee waivers (0.26)%(f) 0.37% 0.23% 0.41% 1.46% 0.66%(g)
=================================================== ======= ======= ======= ======= ======= =======
Without fee waivers (0.43)%(f) 0.35% 0.16% (0.66)% (5.34)% (7.26)%(g)
=================================================== ======= ======= ======= ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers 1.98%(f) 1.97% 2.29% 2.32% 2.34% 2.40%(g)
=================================================== ======= ======= ======= ======= ======= =======
Without fee waivers 2.15%(f) 1.99% 2.36% 3.39% 9.14% 10.32%(g)
=================================================== ======= ======= ======= ======= ======= =======
Portfolio turnover rate 66% 111% 91% 103% 170% 53%(g)
=================================================== ======= ======= ======= ======= ======= =======
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Before reimbursement the net investment income per share would have been
reduced by $0.13.
(c) Before reimbursement the net investment income per share would have been
reduced by $0.59.
(d) Before reimbursement the net investment income per share would have been
reduced by $0.23.
(e) Total return does not include sales charge and is not annualized for
periods less than one year.
(f) Ratios are annualized and based on average net assets of $30,485,185.
(g) Annualized.
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
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, MAY 31, 1994 TO
APRIL 30, ---------------------------------------- OCTOBER 31,
1999(a) 1998(a) 1997(a) 1996(a) 1995(a) 1994
--------- ------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.71 $ 16.97 $ 14.06 $ 11.83 $11.60 $11.43
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
Income from investment operations:
Net investment income (loss) (0.07) (0.02) (0.04) (0.01)(b) 0.11(c) 0.00(d)
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
Net realized and unrealized gain (loss) on
investments 6.73 0.37 3.94 2.34 0.12 0.17
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
Net increase (decrease) from investment operations 6.66 0.35 3.90 2.33 0.23 0.17
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
Distributions to shareholders:
From net investment income -- (0.01) -- (0.09) -- --
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
From net realized gain on investments (0.03) (0.60) (0.99) (0.01) -- --
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
Total distributions (0.03) (0.61) (0.99) (0.10) -- --
- ------------------------------------------------------- -------- ------- ------- --------- ------ ------
Net asset value, end of period $ 23.34 $ 16.71 $ 16.97 $ 14.06 $11.83 $11.60
======================================================= ======== ======= ======= ========= ====== ======
Total return(e) 39.93% 2.08% 29.13% 19.81% 1.98% 1.49%
======================================================= ======== ======= ======= ========= ====== ======
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 54,400 $48,785 $47,585 $ 9,886 $4,548 $2,235
======================================================= ======== ======= ======= ========= ====== ======
Ratio of net investment income (loss) to average net
assets:
With fee waivers (0.76)%(f) (0.13)% (0.27)% (0.09)% 0.96% 0.16%(g)
======================================================= ======== ======= ======= ========= ====== ======
Without fee waivers (0.93)%(f) (0.15)% (0.34)% (1.16)% (5.84)% (7.76)%(g)
======================================================= ======== ======= ======= ========= ====== ======
Ratio of expenses to average net assets:
With fee waivers 2.48%(f) 2.47% 2.79% 2.82% 2.84% 2.90%(g)
======================================================= ======== ======= ======= ========= ====== ======
Without fee waivers 2.65%(f) 2.49% 2.86% 3.89% 9.64% 10.82%(g)
======================================================= ======== ======= ======= ========= ====== ======
Portfolio turnover rate 66% 111% 91% 103% 170% 53%(g)
======================================================= ======== ======= ======= ========= ====== ======
</TABLE>
(a) These selected per share data were calculated based upon average shares
outstanding during the period.
(b) Before reimbursement the net investment income per share would have been
reduced by $0.13.
(c) Before reimbursement the net investment income per share would have been
reduced by $0.59.
(d) Before reimbursement the net investment income per share would have been
reduced by $0.23.
(e) Total return does not include sales charges and is not annualized for
periods less than one year.
(f) Ratios are annualized and based on average net assets of $50,980,634.
(g) Annualized.
15
<PAGE> 18
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
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 C ADVISOR CLASS
---------------- ----------------------------------------------------------
JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO
MARCH 1, 1999 TO APRIL 30, ----------------------------- OCTOBER 31,
APRIL 30, 1999 1999(a) 1998(a) 1997(a) 1996(a) 1995(a)
---------------- --------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.58 $ 17.31 $ 17.40 $ 14.26 $11.95 $11.09
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
Income from investment operations:
Net investment income (loss) (0.02) 0.01 0.17 0.12 0.12(b) 0.09(c)
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
Net realized and unrealized gain (loss) on
investments 3.78 6.98 0.35 4.01 2.36 0.77
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
Net increase (decrease) from investment
operations 3.76 6.99 0.52 4.13 2.48 0.86
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
Distributions to shareholders:
From net investment income -- (0.12) (0.01) -- (0.16) --
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
From net realized gain on investments -- (0.03) (0.60) (0.99) (0.01) --
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
Total distributions -- (0.15) (0.61) (0.99) (0.17) --
- ---------------------------------------------------- ------ ------- ------- ------- ------ ------
Net asset value, end of period $23.34 $ 24.15 $ 17.31 $ 17.40 $14.26 $11.95
==================================================== ====== ======= ======= ======= ====== ======
Total return(d) 19.20% 40.69% 3.03% 30.52% 20.87% 7.75%
==================================================== ====== ======= ======= ======= ====== ======
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 194 $ 9,466 $ 9,276 $ 3,738 $ 72 $ 31
==================================================== ====== ======= ======= ======= ====== ======
Ratio of net investment income (loss) to average
net assets:
With fee waivers (0.76)%(e) 0.24%(e) 0.87% 0.73% 0.91% 1.96%(f)
==================================================== ====== ======= ======= ======= ====== ======
Without fee waivers (0.93)%(e) 0.07%(e) 0.85% 0.66% (0.16)% (4.84)%(f)
==================================================== ====== ======= ======= ======= ====== ======
Ratio of expenses to average net assets:
With fee waivers 2.48%(e) 1.48%(e) 1.47% 1.79% 1.82% 1.84%(f)
==================================================== ====== ======= ======= ======= ====== ======
Without fee waivers 2.65%(e) 1.65%(e) 1.49% 1.86% 2.89% 8.64%(f)
==================================================== ====== ======= ======= ======= ====== ======
Portfolio turnover rate 66% 66% 111% 91% 103% 170%
==================================================== ====== ======= ======= ======= ====== ======
</TABLE>
(a) These selected per share data were calculated based upon average shares
outstanding during the period.
(b) Before reimbursement the net investment income per share would have been
reduced by $0.13.
(c) Before reimbursement the net investment income per share would have been
reduced by $0.30.
(d) Total return does not include sales charges and is not annualized for
periods less than one year.
(e) Ratios are annualized and based on average net assets of $41,802 and
$9,332,050 for Class C and Advisor Class, respectively.
(f) Annualized.
16
<PAGE> 19
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham TRANSFER AGENT
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President A I M Fund Services, Inc.
P.O. Box 4739
Arthur C. Patterson Carol F. Relihan Houston, TX 77210-4739
Managing Partner, Accel Partners Vice President
(a venture capital firm) CUSTODIAN
Mary J. Benson
Ruth H. Quigley Assistant Vice President and State Street Bank and Trust Company
Private Investor Assistant Treasurer 225 Franklin Street
Boston, MA 02110
Sheri Morris
Assistant Vice President and COUNSEL TO THE FUND
Assistant Treasurer
Kirkpatrick & Lockhart LLP
Nancy L. Martin 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Ofelia M. Mayo COUNSEL TO THE TRUSTEES
Assistant Secretary
Paul, Hastings, Janofsky & Walker LLP
Kathleen J. Pflueger Twenty Third Floor
Assistant Secretary 555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
</TABLE>
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Money Market Fund provided leadership in the
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund mutual-fund industry since 1976
AIM Capital Development Fund and managed approximately $112
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS billion in assets for more than
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund 6.3 million shareholders,
AIM Large Cap Growth Fund AIM Asian Growth Fund including individual investors,
AIM Mid Cap Equity Fund(2), (A) AIM Developing Markets Fund(2) corporate clients and financial
AIM Select Growth Fund(3) AIM Europe Growth Fund(2) institutions as of March 31,
AIM Small Cap Growth Fund(2), (B) AIM European Development Fund 1999.
AIM Small Cap Opportunities Fund AIM International Equity Fund The AIM Family of
AIM Value Fund AIM Japan Growth Fund(2) Funds--Registered Trademark--
AIM Weingarten Fund AIM Latin American Growth Fund(2) is distributed nationwide, and
AIM New Pacific Growth Fund(2) AIM today is the 10th-largest
GROWTH & INCOME FUNDS mutual-fund complex in the
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS United States in assets under
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund management, according to
AIM Advisor Real Estate Fund AIM Global Growth Fund Strategic Insight, an
AIM Balanced Fund independent mutual-fund
AIM Basic Value Fund(2), (C) GLOBAL GROWTH & INCOME FUNDS monitor.
AIM Charter Fund AIM Global Growth & Income Fund(2)
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund(2) GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(2), (D)
AIM High Yield Fund II AIM Global Government Income Fund(2)
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund(2)
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund(2)
AIM High Income Municipal Fund AIM Global Financial Services Fund(2)
AIM Municipal Bond Fund AIM Global Health Care Fund(2)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Resources Fund(2)
AIM Global Telecommunications and Technology Fund(2), (E)
AIM Global Trends Fund(2), (F)
</TABLE>
(1)AIM Aggressive Growth Fund reopened to new investors November 16, 1998.
(2)Effective May 29, 1998, A I M Advisors, Inc. became advisor to the former GT
Global Funds. (3)On May 1, 1998, AIM Growth Fund was renamed AIM Select Growth
Fund. (A)On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap
Equity Fund. (B)On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM
Small Cap Growth Fund. (C)On September 8, 1998, AIM America Value Fund was
renamed AIM Basic Value Fund. (D)On September 8, 1998, AIM Global High Income
Fund was renamed AIM Emerging Markets Debt Fund. (E)On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F)On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends Fund. For more complete information about any AIM Fund(s), including
sales charges and expenses, ask your financial consultant or securities dealer
for a free prospectus(es). Please read the prospectus(es) carefully before you
invest or send money.
[AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE--Registered Trademark--
