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ADVISOR CLASS SHARES OF
AIM EMERGING MARKETS DEBT FUND
AIM GLOBAL GOVERNMENT INCOME FUND
AIM GLOBAL GROWTH & INCOME FUND
AIM STRATEGIC INCOME FUND
(SERIES PORTFOLIOS OF AIM INVESTMENT FUNDS)
Supplement dated October 1, 1999
To the Statement of Additional Information dated March 1, 1999
The following paragraph replaces in its entirety the paragraph appearing
under the heading "INVESTMENT STRATEGIES AND RISKS -- TEMPORARY DEFENSIVE
STRATEGIES" on page 14 of the Statement of Additional Information.
"In anticipation of or in response to adverse market conditions, for
cash management purposes or for defensive purposes, each of the Funds and
the Portfolio may temporarily hold all or a portion of its assets in cash
(U.S. dollars, and for the Growth & Income Fund, the Strategic Income
Fund and Government Income Fund foreign currencies or multinational
currency units), money market instruments, or high-quality debt
securities. Each of the Funds and the Portfolio may also invest up to 25%
of its total assets in money market investment companies advised by AIM or
its affiliates ("Affiliated Money Market Funds") for these purposes. In
addition, for temporary defensive purposes, most or all of each Fund's and
the Portfolio's investments may be made in the United States and
denominated in U.S. dollars. To the extent a Fund or the Portfolio
employs a temporary defensive strategy, it will not be invested so as to
achieve directly its investment objectives."
The following paragraph replaces in its entirety the paragraph appearing
under the heading INVESTMENT STRATEGIES AND RISKS -- INVESTMENT IN OTHER
INVESTMENT COMPANIES" on page 14 of the Statement of Additional Information:
"With respect to certain countries, investments by Government Income
Fund, Strategic Income Fund, 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 AIM or its
affiliates) with local governmental approval to invest in those countries.
To the extent that a Fund or Portfolio invests in such investment
companies, the prices paid by the Fund or Portfolio and the proceeds to the
Fund or Portfolio upon sale of the shares may reflect premiums above or
discounts to the net asset value of the assets owned by such investment
companies. At such time as direct investment in these countries is allowed,
Government Income Fund, Strategic Income Fund, Growth & Income Fund, and
the Portfolio anticipate investing directly in these markets. Government
Income Fund, Strategic Income Fund, Growth & Income Fund, and the Portfolio
may invest in other investment companies to the extent permitted by the
1940 Act, rules and regulations thereunder, and any applicable exemptive
orders granted by the SEC. Under an exemptive order granted by the SEC,
each of the Government Income Fund, Strategic Income Fund, Growth & Income
Fund and the Portfolio is permitted to, and intends to, invest its cash
(and cash collateral received in connection with the lending of portfolio
securities) in shares of Affiliated Money Market Funds, provided that those
investments do not exceed 25% of the total assets of such Fund or
Portfolio. In general, a purchase of investment company securities may
result in the duplication of fees and expenses. With respect to a Fund's or
Portfolio's purchase of shares of Affiliated Money Market Funds, the Fund
or Portfolio will indirectly pay the advisory fees and other operating
expenses of the Affiliated Money Market Funds."
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The following replaces in its entirety item "(2)" appearing under the
heading "INVESTMENT LIMITATIONS -- GOVERNMENT INCOME FUND" under the
non-fundamental policies discussion on page 37 of the Statement of Additional
Information:
"(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,
except that the Fund may purchase securities of Affiliated Money Market
Funds to the extent permitted by exemptive order;"
The following replaces in its entirety items "(3)" and "(4)" appearing
under the heading "INVESTMENT LIMITATIONS -- STRATEGIC INCOME FUND" under the
non-fundamental policies discussion on page 38 of the Statement of Additional
Information:
"(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), except that the Fund
may purchase securities of Affiliated Money Market Funds to the extent
permitted by exemptive order;
(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), except that the Fund may purchase
securities of Affiliated Money Market Funds to the extent permitted by
exemptive order;"
The following replaces in its entirety items "(1)" and "(4)" appearing
under the heading "INVESTMENT LIMITATIONS -- EMERGING MARKETS DEBT FUND AND THE
PORTFOLIO" under the non-fundamental policies discussion on page 39 of the
Statement of Additional Information:
"(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), except that the
Fund or the Portfolio may purchase securities of Affiliated Money Market
Funds to the extent permitted by exemptive order;
(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), except that the Fund or the Portfolio may purchase securities of
Affiliated Money Market Funds to the extent permitted by exemptive order;"
The following replaces in its entirety item "(1)" appearing under the
heading "INVESTMENT LIMITATIONS -- GROWTH & INCOME FUND" under the
non-fundamental policies discussion on page 40 of the Statement of Additional
Information:
"(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,
except that the Fund may purchase securities of Affiliated Money Market
Funds to the extent permitted by exemptive order;"
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The following new section is added after the tenth paragraph appearing
under the heading "EXECUTION OF PORTFOLIO TRANSACTIONS" on page 41 of the
Statement of Additional Information:
"ALLOCATION OF INITIAL PUBLIC OFFERING ("IPO") SECURITIES TRANSACTIONS
From time to time, certain of the mutual funds managed by AIM or A I M
Capital Management, Inc. (collectively, the "AIM Funds") may become
interested in participating in security distributions that are available in
an IPO, and occasions may arise when purchases of such securities by one
AIM Fund may also be considered for purchase by one or more other AIM
Funds. In such cases, it shall be AIM's practice to specifically combine or
otherwise bunch indications of interest for IPO securities for all AIM
Funds participating in purchase transactions for that security, and to
allocate such transactions in accordance with the following procedures:
AIM will determine the eligibility of each AIM Fund that seeks to
participate in a particular IPO by reviewing a number of factors, including
suitability of the investment with the AIM Fund's investment objective,
policies and strategies, the liquidity of the AIM Fund if such investment
is purchased, and whether the portfolio manager intends to hold the
security as a long-term investment. The allocation of limited supply
securities issued in IPOs will be made to eligible AIM Funds in a manner
designed to be fair and equitable for the eligible AIM Funds, and so that
there is equal allocation of IPOs over the longer term. Where multiple
funds are eligible, rotational participation may occur, based on the extent
to which an AIM Fund has participated in previous IPOs as well as the size
of the AIM Fund. Each eligible AIM Fund with an asset level of less than
$500 million, will be placed in one of three tiers, depending upon its
asset level. The AIM Funds in the tier containing funds with the smallest
asset levels will participate first, each receiving a 40 basis point
allocation (rounded to the nearest share round lot that approximates 40
basis points) (the "Allocation"), based on that AIM Fund's net assets. This
process continues until all of the AIM Funds in the three tiers receive
their Allocations, or until the shares are all allocated. Should securities
remain after this process, eligible AIM Funds will receive their
Allocations on a straight pro rata basis. For the tier of AIM Funds not
receiving a full Allocation, the Allocation may be made only to certain AIM
Funds so that each may receive close to or exactly 40 basis points.
Any AIM Funds with substantially identical investment objectives and
policies will participate in syndicates in amounts that are substantially
proportionate to each other. In these cases, the net assets of the largest
AIM Fund will be used to determine in which tier, as described in the
paragraph above, such group of AIM Funds will be placed. The price per
share of securities purchased in such syndicate transactions will be the
same for each AIM Fund."
The following new paragraph is added after the seventh paragraph appearing
under the heading INVESTMENT RESULTS -- PERFORMANCE INFORMATION" on page 61 of
the Statement of Additional Information:
"Some or all of the Funds and the Portfolio may participate in the IPO
market, and a significant portion of those Funds' and the Portfolio's
returns may be attributable to their investment in IPOs, which have a
magnified impact due to the Funds' and the Portfolio's small asset bases.
There is no guarantee that as the Funds' and the Portfolio's assets grow,
they will continue to invest to the same degree in IPOs or that they will
experience substantially similar performance."
The following replaces in its entirety the table appearing under the
heading MANAGEMENT -- TRUSTEES AND EXECUTIVE OFFICERS" on page 43 of the
Statement of Additional Information:
3
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<TABLE>
<CAPTION>
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POSITIONS HELD WITH
"NAME, ADDRESS AND AGE REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
- --------------------------- ------------------- -----------------------------------------------------
<S> <C> <C>
*ROBERT H. GRAHAM (52) Trustee, Chairman Director, President and Chief Executive Officer,
of the Board and A I M Management Group Inc.; Director and President,
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 (58) 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, Premium Wear, Inc. (formerly
Munsingwear, Inc.) (a casual apparel company); and
Director, 'R' Homes, Inc. and various other
privately owned companies.
- --------------------------- ------------------- -----------------------------------------------------
FRANK S. BAYLEY (60) Trustee Partner, law firm of Baker & McKenzie; Trustee, The
Two Embarcadero Center Bradley Funds; and Director and Chairman, C. D.
Suite 2400 Stimson Company (a private investment company) and
San Francisco, CA 94111 Stimson Marina, Inc. (a subsidiary of C.D. Stimson
Co.).
- --------------------------- ------------------- -----------------------------------------------------
RUTH H. QUIGLEY (64) Trustee Private investor; and President, Quigley Friedlander
1055 California Street & Co., Inc. (a financial advisory services firm)
San Francisco, CA 94108 from 1984 to 1986.
- --------------------------- ------------------- -----------------------------------------------------
MELVILLE B. COX (55) 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 (52) Vice President Director and President, A I M Capital Management,
Inc.; Director and Executive Vice President, A I M
Management Group Inc. and A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and AMVESCAP PLC.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
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* A trustee who is an "interested person" of the Trust and AIM as
defined in the 1940 Act.
4
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
POSITIONS HELD WITH
"NAME, ADDRESS AND AGE REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
- --------------------------- ------------------- -----------------------------------------------------
<S> <C> <C>
CAROL F. RELIHAN (44) Vice President Director, Senior Vice President, General Counsel and
Secretary, A I M Advisors, Inc.; Senior 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.
- --------------------------- ------------------- -----------------------------------------------------
SAMUEL D. SIRKO (40) Vice President and Assistant General Counsel and Assistant Secretary of
Secretary 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;
and Vice President, Assistant General Counsel and
Assistant Secretary of A I M Advisors, Inc.
- --------------------------- ------------------- -----------------------------------------------------
DANA R. SUTTON (40) Vice President and Vice President and Fund Controller, A I M Advisors,
Treasurer Inc.; and Assistant Vice President and Assistant
Treasurer, Fund Management Company."
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</TABLE>
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