<PAGE> 1
[COVER IMAGE]
AIM
DEVELOPING MARKETS FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT APRIL 30 1999
INVEST WITH DISCIPLINE--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
----------------------------------
MURAL FROM THE TEMPLE OF LONGING BY PAUL KLEE
PAUL KLEE'S ART WAS TRANSFORMED BY A TRIP HE TOOK TO TUNISIA IN 1914, WHERE HE
WAS AWED BY THE LANDSCAPE'S BEAUTIFULLY INTENSE COLOR AND LIGHT. KLEE BROUGHT
THOSE QUALITIES TO HIS OWN WORK, CREATING IMAGINATIVE, LIGHT-FILLED PAINTINGS
LIKE THE ONE ON THE COVER. RADIATING WITH OPTIMISM AND ENERGY, KLEE'S MURAL IS
A FITTING EMBLEM FOR THE DYNAMIC GROWTH PUSHING TODAY'S EMERGING MARKETS INTO
THE 21ST CENTURY.
----------------------------------
AIM Developing Markets Fund is for shareholders who seek long-term growth of
capital and secondarily seek income. The Fund primarily invests in
developing-market equity securities, but may also invest in developing-market
debt securities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Developing Markets Fund (formerly GT Global Developing Markets 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, Class C and Advisor Class
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 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 MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The MSCI Emerging Markets Free Index is a group of unmanaged securities
from emerging markets tracked by Morgan Stanley Capital International. A
"free" index includes only securities available to non-domestic investors.
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 DEVELOPING MARKETS FUND
<PAGE> 3
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/99, including sales charges
CLASS A SHARES
Inception (1/11/94) -5.64%
5 Years -2.48
1 Year -25.73
CLASS B SHARES
Inception (11/3/97) -18.19%
1 Year -26.35
CLASS C SHARES
Inception (3/1/99) 25.91%*
ADVISOR CLASS SHARES
Inception (11/3/97) -15.25%
1 Year -21.82
*Total return provided is cumulative total return that has not been annualized.
===============================================================================
Past performance cannot guarantee comparable future results.
AIM DEVELOPING MARKETS FUND
<PAGE> 4
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
AIM 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 DEVELOPING MARKETS FUND
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
OVERSEAS MARKET REBOUND RALLIES FUND
MANY EMERGING MARKETS HAVE BOUNCED BACK SINCE YOUR LAST REPORT. HOW DID AIM
DEVELOPING MARKETS FUND PERFORM IN THIS ENVIRONMENT?
Fund performance has shown a marked improvement during the last six months. The
market volatility that was so pervasive during 1998 has calmed considerably,
allowing many overseas markets to recover at least partially from the declines
they experienced last year.
For the six months ended April 30, 1999, Class A shares of the Fund had a
total return of 28.52% and Class B shares returned 27.96%, excluding sales
charges. Advisor Class shares finished the reporting period with a return of
28.61%. In comparison, the MSCI Emerging Markets Free Index had a return of
34.87% for the reporting period.
Class C shares of the Fund, which commenced sales on March 1, 1999, had a
cumulative total return of 26.91% since that date, excluding sales charges.
Total net assets in the Fund stood at $188.6 million as of April 30, 1999,
up from $87.7 million at the last report.
================================================================================
SIX-MONTH FUND RETURNS
Excluding sales charges
Class Class Advisor
A Shares B Shares Class
10/31/98-4/30/99
28.52% 27.96% 28.61%
4/30/98-10/31/98
-39.32% -39.45% -39.21%
================================================================================
HOW HAVE FINANCIAL MARKETS CHANGED SINCE YOUR LAST REPORT?
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 all emerging markets--and the global financial
system--a big scare last summer. Liquidity conditions in Asia have improved
thanks to dramatic debt reductions in those countries. This situation has
contributed to falling interest rates and recovering equity markets.
At the beginning of the reporting period, markets in Latin America were on
their way up as investors began to regain confidence in the region. The area's
largest economy, Brazil, received a $41 billion funding package from the
International Monetary Fund (IMF) to help pull it out of the economic doldrums.
Then in January of 1999, Latin American markets fell into a panic when Brazil's
central-bank governor resigned and the Brazilian currency, the real, was
devalued and allowed to float on the open market. However, sentiment turned for
the better with the arrival of a new central-bank governor and clearer monetary
policy.
The IMF says the worst may be over in the global financial crisis. Asian
markets have rallied in recent weeks, buoyed by continued good economic news
and signs that interest in buying Asian stocks could be spreading. However,
Russia continues to struggle with its financial difficulties and is currently
working with the IMF to finalize its next loan package. And although by the end
of the first quarter the MSCI Emerging Markets Free Index had risen about 40%
from its low last September, it still sat at just over half of the peak level
it reached in the middle of 1994.
HOW HAVE YOU BEEN MANAGING THE FUND?
We strive to keep an even balance between "top-down" and "bottom-up" research
for emerging-markets investment opportunities. We look at the economic and
political health of countries in which we would like to invest and seek out
stocks in those countries that we believe will demonstrate growth at a
reasonable price. We try to find stocks of companies boasting strong cash flow,
a niche or a product edge in countries acting to solve their economic problems.
This focused approach to stock selection has led us to reduce the number of
holdings in the Fund from more than 200 a year ago to 122 at the end of the
reporting period. We aim to maintain approximately 80 to 120 stocks in the
portfolio.
We have also reduced the Fund's weighting in emerging-markets bonds. We
will, however, add these to the portfolio when they present an attractive
investment opportunity relative to our equity holdings.
WHAT REGIONS HAVE YOU LIKED?
Our largest country allocations are still in Latin America. Mexico has
continued to perform well, partly because of its tight commercial and
investment ties with the strong U.S. economy. The rebound in oil prices has
helped the outlook for Mexico as well. Examples of Mexican stocks we liked
include the telephone company Telefonos de Mexico S.A. de C.V., which has more
than nine million phone lines and serves more than 1.1 million cellular
customers, and Grupo Carso S.A., a conglomerate that owns stakes in everything
from department stores to brokerage services.
Brazil's recovery has helped Argentina because the two countries are close
trading partners. For example, Argentinean auto makers use parts produced in
Brazil. Because Brazilian companies are doing better, their costs are down, and
they can
See important Fund and index disclosures inside front cover.
------------------------------------
THE IMF SAYS THE WORST MAY BE
OVER IN THE GLOBAL FINANCIAL CRISIS.
------------------------------------
AIM DEVELOPING MARKETS FUND
<PAGE> 6
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 4/30/99, based on total net assets
<TABLE>
<CAPTION>
===============================================================================
Top 10 Portfolio Holdings
- -------------------------------------------------------------------------------
<S> <C>
1. Merrill Lynch - Kospi 200 Call Warrants, due 9/9/99 (South Korea) 6.02%
2. Telefonos de Mexico S.A. de C.V. "L" - ADR (Mexico) 2.61
3. Telecomunicacoes Brasileiras S.A. (Telebras) Preferred (Brazil) 2.43
4. Magyar Tavkozlesi Rt. - ADR (Hungary) 1.90
5. Hindustan Lever Ltd. (India) 1.88
6. Petroleo Brasileiro S.A. (Petrobas) Preferred (Brazil) 1.81
7. Phillippine Long Distance (The Phillipines) 1.78
8. Companhia Energetica de Minas Gerais (CEMIG) - ADR (Brazil) 1.77
9. Fomento Economico Mexicano, S.A. de C.V. - ADR (Mexico) 1.76
10. MOL Magyar Olaj-es Gazipari RT - Reg S GDR (Hungary) 1.68
================================================================================
<CAPTION>
================================================================================
Top 10 Industries Top 10 Countries
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Telephone 10.98% 1. Mexico 13.9%
2. Electric Companies 6.34 2. Brazil 12.8
3. Investment Banking/Brokerages 6.02 3. South Africa 9.6
4. Banks (Money Center) 4.92 4. United States 8.7
5. Banks (Regional) 4.91 5. Greece 6.2
6. Telecommunications (Cellular/Wireless) 4.47 6. India 5.9
7. Manufacturing (Diversified) 4.09 7. Korea 5.6
8. Banks (Major Regional) 3.95 8. Israel 5.6
9. Investment Management 3.91 9. Taiwan 4.9
10. Construction 3.79 10. Egypt 4.4
</TABLE>
The Fund's portfolio is subject to change, and there is no assurance that the
Fund will continue to hold any particular security.
================================================================================
make auto parts more cheaply. That, in turn, reduces auto-production costs in
Argentina.
One stock we have liked in Argentina is YPF S.A., an integrated oil
company. The country's largest company, YPF accounts for about half of
Argentina's oil reserves, production and refining capacity. The rebound in oil
prices has obviously helped YPF, as has its privatization.
WHAT OTHER OPPORTUNITIES DID YOU FIND?
The Fund's overweight position in Egypt has been a major contributor to
performance during 1999, with the market there rising more than 20% during the
first quarter. Our Greek bank holdings, like Alpha Credit Bank and National
Bank of Greece S.A., have also benefited the Fund. We added to our Korean
holdings with positions in Korea's largest domestic mortgage bank, Housing and
Commercial Bank, and the major cellular provider SK Telecom. Korea was one of
the best performers in the Asia-Pacific market during 1998 because the country
worked hard at meeting the IMF's requirements and implementing financial
reforms.
We have particularly liked the communication and financial-services
sectors, at 19.4% and 30.9% of the portfolio, respectively, because these
sectors have become inexpensive relative to their international peers.
Governments have been allowing more foreign direct investment in these sectors
to support their infrastructure and financial-development needs. Examples of
those stocks include Hungarian telephone company Magyar Tavkozlesi Rt. and Haci
Omer Sabanci Holding AS, Turkey's second-largest business group.
WHAT IS YOUR OUTLOOK?
A growing number of analysts believe that the emerging markets' deep financial
crisis has bottomed out. The IMF has said that the global economy should
stabilize this year and enjoy a solid recovery in 2000. Even so, emerging
markets are likely to remain choppy, although not to the extent they were in
1998. The IMF is also discussing ways to relieve the crushing debt burdens
carried by the world's poorest countries. Politics could also play a role in
economic recovery of emerging markets, with economic reforms being a key issue
in many countries.
Investors are likely to remain cautious about emerging markets because many
countries are still experiencing financial challenges, and corporate earnings
are expected to remain low. However, valuations in these markets are still very
attractive, and we look for continued positive returns from both
emerging-markets stocks and bonds over the next year.
GLOSSARY OF TERMS
EMERGING OR DEVELOPING MARKETS. The financial markets of countries shifting
from agriculture-based economies to industrialized ones, and of countries
changing from socialist to free-market systems. These countries have lower
per-capita gross national product than developed nations. Their equity markets
are typically small, with relatively few stocks being traded. Bonds issued by
these nations are generally considered below investment grade and so carry high
yields to counterbalance the added risk. The financial markets in emerging
countries offer the potential for higher rates of economic growth than the more
mature markets of the United States, Western Europe and Japan, but the risk
attached to such investments is considerably higher.
ADR (AMERICAN DEPOSITARY RECEIPT). A receipt representing ownership of shares
of a foreign company. A U.S. bank creates an ADR, and the underlying shares are
held by a custodian in the issuing company's home country. An ADR is a
negotiable security, denominated in dollars and registered with the Securities
and Exchange Commission. ADRs can be traded on exchanges and over the counter
just as shares of U.S. stocks are. An ADR entitles its owner to all dividends
and capital gains produced by the underlying shares.
CURRENCY RISK. For an American investor, the risk that changes in the value of
the dollar compared to other currencies will hurt an investment. Say you own an
investment earning interest in British pounds. It's good for you if the dollar
is weak compared to the pound. When you sell your investment, you have to
translate the pounds it has earned back into dollars. If the dollar has
declined compared to the pound, the pounds you've earned will buy more dollars
for you. If the dollar has risen, your pounds would buy fewer dollars.
See important Fund and index disclosures inside front cover.
AIM DEVELOPING MARKETS FUND
<PAGE> 7
SCHEDULE OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-96.94%
ARGENTINA-3.95%
Banco de Galicia y Buenos Aires
S.A. de C.V.-ADR
(Banks-Regional) 62,236 $ 1,435,326
- --------------------------------------------------------------
Nortel Inversora S.A. (Telephone) 43,400 705,250
- --------------------------------------------------------------
Telefonica de Argentina S.A.-ADR
(Telephone) 58,511 2,186,849
- --------------------------------------------------------------
YPF Sociedad Anonima-ADR
(Oil-International Integrated) 74,300 3,120,600
- --------------------------------------------------------------
7,448,025
- --------------------------------------------------------------
BRAZIL-12.35%
Centrais Eletricas de Santa
Catarina S.A. (Electric
Companies) 1,560,000 732,571
- --------------------------------------------------------------
Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar-Pfd. (Retail-Food
Chains) 55,700 971,269
- --------------------------------------------------------------
Companhia de Eletricidade do
Estado da Bahia (Electric
Companies) 27,600 747,742
- --------------------------------------------------------------
Companhia de Saneamento Basico do
Estado de Sao Paulo (Water
Utilities) 11,792 993,866
- --------------------------------------------------------------
Companhia de Tecidos Norte de
Minas (Textiles-Specialty) 7,836 518,940
- --------------------------------------------------------------
Companhia Energetica de Minas
Gerais (Electric Companies) 139,281 3,341,463
- --------------------------------------------------------------
Companhia Paranaense de Energia
(Electric Companies) 209,000 1,711,187
- --------------------------------------------------------------
Companhia Vale de Rio Doce-Pfd. A
(Iron & Steel) 99,700 1,878,754
- --------------------------------------------------------------
Eletricidade de Sao Paulo S.A.
(Electric Companies) 27,555 1,061,729
- --------------------------------------------------------------
Eletropaulo
Metropolitana-Eletricidade de
Sao Paulo S.A.-Rts. (Electric
Companies), expiring
05/22/99(a) 3,646 41,708
- --------------------------------------------------------------
Petroleo Brasileiro
S.A.-Petrobras-Pfd. (Oil &
Gas-Exploration & Production) 21,000 3,413,603
- --------------------------------------------------------------
Telebras-ADR Pfd. (Telephone) 50,353 4,591,047
- --------------------------------------------------------------
Telecomunicacoes Brasileiras
S.A.-ADR (Telephone) 50,353 3,934
- --------------------------------------------------------------
Telecomunicacoes de Sao Paulo
S.A. (Telephone)(a) 17,750 1,334,723
- --------------------------------------------------------------
Telecomunicacoes de Sao Paulo
S.A.-TELESP-Pfd. (Telephone) 336 41,819
- --------------------------------------------------------------
Uniao de Bancos Brasileiros
S.A.-GDR (Banks-Regional) 76,816 1,905,997
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
BRAZIL-(CONTINUED)
Unibanco-Uniao de Bancos
Brasileiros S.A. (Banks-Major
Regional)(b) 1 $ 23
- --------------------------------------------------------------
23,290,375
- --------------------------------------------------------------
CHILE-2.61%
Cia. de Telecomunicaciones de
Chile S.A.-ADR (Telephone) 36,200 957,037
- --------------------------------------------------------------
Compania Cervecerias Unidas
S.A.-ADR (Beverages-Alcoholic) 40,000 982,500
- --------------------------------------------------------------
Enersis S.A.-ADR (Electric
Companies) 52,596 1,009,186
- --------------------------------------------------------------
Sociedad Quimica y Minera de
Chile S.A. (Chemicals) 53,570 1,975,394
- --------------------------------------------------------------
4,924,117
- --------------------------------------------------------------
CHINA-0.75%
Huaneng Power International, Inc.
(Electric Companies) 105,322 1,415,264
- --------------------------------------------------------------
EGYPT-4.26%
Al-Ahram Beverages Co. S.A.E.-GDR
(Beverages-Alcoholic) 35,163 1,125,216
- --------------------------------------------------------------
Al-Ahram Beverages Co. S.A.E.-GDR
144A (Beverages-Alcoholic)
(Acquired 06/10/97-08/07/97;
Cost $838,350)(c) 37,049 1,185,568
- --------------------------------------------------------------
Madinet Nasr for Housing &
Development Co.
(Services-Commercial &
Consumer) 5,050 153,048
- --------------------------------------------------------------
Misr Elgadida for Housing and
Reconstruction (Building
Materials) 15,500 783,442
- --------------------------------------------------------------
Misr International Bank
(Banks-Major Regional)
(Acquired 12/10/97-05/13/98;
Cost $2,194,869)(c) 164,900 1,879,860
- --------------------------------------------------------------
Suez Cement Co. (Building
Materials) (Acquired
06/05/97-07/15/98; Cost
$3,370,450)(c) 173,330 2,903,277
- --------------------------------------------------------------
8,030,411
- --------------------------------------------------------------
GREECE-5.98%
Alpha Credit Bank
(Banks-Regional) 34,720 2,478,873
- --------------------------------------------------------------
Commercial Bank of Greece, S.A.
(Banks-Major Regional)(a) 7,200 1,259,428
- --------------------------------------------------------------
Hellenic Telecommunication
Organization S.A.
(Telecommunication-Cellular/Wireless) 123,688 2,870,024
- --------------------------------------------------------------
National Bank of Greece S.A.
(Banks-Money Center)(a) 33,480 2,282,233
- --------------------------------------------------------------
National Bank of Greece S.A.-Rts.
(Banks-Money Center), expiring
05/28/99(a) 51,680 159,414
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
GREECE-(CONTINUED)
STET Hellas Telecommunications
S.A.
(Telecommunications-Cellular/Wireless)(a) 82,205 $ 2,219,535
- --------------------------------------------------------------
11,269,507
- --------------------------------------------------------------
HUNGARY-3.57%
Magyar Tavkozlesi ADR
(Telecommunications-Long
Distance) 127,090 3,574,406
- --------------------------------------------------------------
MOL Magyar Olaj-es Gazipari Rt.
(Oil-Domestic Integrated)
(Acquired 09/05/97-10/29/98;
Cost $3,008,601)(c) 140,740 3,166,650
- --------------------------------------------------------------
6,741,056
- --------------------------------------------------------------
INDIA-5.66%
Associated Cement Co. Ltd.
(Construction-Cement &
Aggregates) 16 545
- --------------------------------------------------------------
BSES Ltd. (Electric Companies) 200 619
- --------------------------------------------------------------
Hindustan Lever Ltd. (Aluminum) 73,850 3,541,487
- --------------------------------------------------------------
Indian Hotels Co. Ltd.
(Lodging-Hotels) 50 335
- --------------------------------------------------------------
ITC Ltd. (Tobacco) 110,428 2,412,951
- --------------------------------------------------------------
KEC International Ltd. (Electric
Companies) 100 71
- --------------------------------------------------------------
Mahanagar Telephone Nigam Ltd.
(Telephone) 142,100 515,399
- --------------------------------------------------------------
Pentafour Software & Exports Ltd.
(Construction-Cement &
Aggregates)(a) 57,700 1,344,401
- --------------------------------------------------------------
Ranbaxy Laboratories Ltd. (Health
Care- Drugs-Generic & Other) 154,950 1,955,434
- --------------------------------------------------------------
State Bank of India (Banks-Major
Regional) 4,650 16,865
- --------------------------------------------------------------
Tata Engineering and Locomotive
Co. Ltd. (Automobiles)(a) 100 322
- --------------------------------------------------------------
Videsh Sanchar Nigam Ltd.
(Telecommunications-Cellular/Wireless)
(Acquired 09/28/98; Cost
$845,724)(c) 74,000 888,000
- --------------------------------------------------------------
10,676,429
- --------------------------------------------------------------
INDONESIA-1.29%
PT Telekomunikasi Indonesia
(Insurance- Property-Casualty) 279,000 2,441,250
- --------------------------------------------------------------
IRELAND-0.35%
Central Asia Growth Fund
(Investment Management)(a) 331,000 662,000
- --------------------------------------------------------------
ISRAEL-5.39%
Bank Leumi Le-Israel (Banks-Money
Center)(a) 1,313,513 2,250,292
- --------------------------------------------------------------
Bezeq Israel Telecommunications
Corp. Ltd.
(Telecommunication-Cellular/Wireless)(a) 629,200 2,448,066
- --------------------------------------------------------------
Blue Square Chain Investments and
Properties Ltd. (Retail-Food
Chains)(a) 78,589 1,166,733
- --------------------------------------------------------------
Blue Square-Israel Ltd.-ADR
(Retail-Food Chains) 78,100 1,083,637
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
ISRAEL-(CONTINUED)
Discount Investment Corp.
(Investment Banking/Brokerage) 40,500 $ 1,467,589
- --------------------------------------------------------------
Makhteshim-Agan Industries Ltd.
(Investment Management)(a) 1 2
- --------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd. (Health Care-Drugs-Generic
& Other) 37,800 1,752,661
- --------------------------------------------------------------
10,168,980
- --------------------------------------------------------------
MEXICO-13.37%
Apasco S.A. de C.V.
(Construction-Cement &
Aggregates) 263,014 1,551,327
- --------------------------------------------------------------
ARA, S.A. de C.V.
(Homebuilding)(a) 394,200 1,446,253
- --------------------------------------------------------------
Cemex S.A. de CV
(Construction-Cement &
Aggregates) 570,392 2,654,422
- --------------------------------------------------------------
Cifra S.A. de C.V.
(Retail-General Merchandise)(a) 1,156,392 2,190,136
- --------------------------------------------------------------
Corporacion GEO S.A. de C.V.
(Construction- Cement &
Aggregates)(a) 380,400 1,601,468
- --------------------------------------------------------------
Formento Economico Mexicano, S.A.
de C.V. (Beverages-Alcoholic) 91,474 3,327,367
- --------------------------------------------------------------
Grupo Carso S.A. de C.V.
(Manufacturing-Diversified)(a) 648,000 3,124,286
- --------------------------------------------------------------
Grupo Financiero Banamex Accival,
S.A. de CV (Banacci)
(Financial-Diversified)(a) 272,667 694,947
- --------------------------------------------------------------
Grupo Televisa S.A.-GDR
(Entertainment)(a) 20,699 848,659
- --------------------------------------------------------------
Telefonos de Mexico S.A.-ADR
(Telephone) 65,062 4,928,446
- --------------------------------------------------------------
Tubos de Acero de Mexico S.A.
(Oil & Gas-Drilling &
Equipment) 257,000 2,843,062
- --------------------------------------------------------------
25,210,373
- --------------------------------------------------------------
PAKISTAN-0.00%
Dewan Salman Fibre Ltd.
(Chemicals-Specialty)(a) 4 2
- --------------------------------------------------------------
Pakistan State Oil Co. Ltd.
(Oil-International Integrated) 78 137
- --------------------------------------------------------------
139
- --------------------------------------------------------------
PERU-0.94%
Credicorp Limited
(Financial-Diversified) 174,390 1,765,699
- --------------------------------------------------------------
PHILIPPINES-2.20%
Bank of the Philippine Islands
(Banks-Major Regional) 257,135 811,471
- --------------------------------------------------------------
Philippine Long Distance
Telephone Co.-ADR (Telephone) 103,800 3,347,550
- --------------------------------------------------------------
4,159,021
- --------------------------------------------------------------
POLAND-1.67%
Kredyt Bank PBI S.A.
(Banks-Regional) (Acquired
08/21/98-09/04/98; Cost
$616,270)(a)(c) 36,690 757,648
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
POLAND-(CONTINUED)
Telekomunikacja Polsha S.A.
(Telephone)(a) 336,216 $ 2,094,626
- --------------------------------------------------------------
Zaklady Piwowarskie w Zywcu S.A.
(Beverages-Alcoholic)(a) 2,803 292,105
- --------------------------------------------------------------
3,144,379
- --------------------------------------------------------------
RUSSIA-1.21%
Surgutneftegaz ADR
(Oil-International Integrated) 299,375 2,288,722
- --------------------------------------------------------------
SINGAPORE-1.59%
Asia Pulp & Paper Co. Ltd.-ADR
(Paper & Forest Products)(a) 85,275 895,387
- --------------------------------------------------------------
Singapore Airlines Ltd.-Wts.,
expiring 04/09/02 (Airlines)(a) 355 2,099,860
- --------------------------------------------------------------
2,995,247
- --------------------------------------------------------------
SOUTH AFRICA-9.27%
Anglo American Corp. of South
Africa Ltd. (Metals-Mining)(a) 39,600 2,046,054
- --------------------------------------------------------------
Anglo American Platinum Corp.
Ltd. (Metals Mining) 144,000 2,626,787
- --------------------------------------------------------------
Barlow Ltd. (Conglomerates)(a) 327,200 1,962,662
- --------------------------------------------------------------
FirstRand Ltd. (Banks-Regional) 1,643,600 1,809,716
- --------------------------------------------------------------
Liberty Life Association of
Africa Ltd. (Insurance Brokers) 105,120 1,515,041
- --------------------------------------------------------------
Rembrandt Group Ltd. (Investment
Management) 354,270 2,692,685
- --------------------------------------------------------------
Sanlam Ltd.
(Insurance-Life/Health) 2,136,960 2,096,574
- --------------------------------------------------------------
South African Breweries PLC
(Manufacturing- Diversified) 315,538 2,618,680
- --------------------------------------------------------------
Truworths International Ltd.
(Textiles- Apparel) 106,656 110,424
- --------------------------------------------------------------
17,478,623
- --------------------------------------------------------------
SOUTH KOREA-11.40%
Housing & Commercial Bank, Korea
(Banks-Major Regional)(a) 71,000 1,672,697
- --------------------------------------------------------------
Korea Electric Power Corp.-ADR
(Electric Companies) 116,847 1,927,976
- --------------------------------------------------------------
Merrill Lynch International & Co.
KOSPI 200-Wts., expiring
09/09/99(a) 1,561,568 11,360,876
- --------------------------------------------------------------
Merrill Lynch International & Co.
SK Telecom Co. Ltd.-Wts.,
expiring 02/10/00(a) 3,050 2,553,979
- --------------------------------------------------------------
Pohang Iron & Steel Co. Ltd. ADR
(Iron & Steel) 84,530 2,176,648
- --------------------------------------------------------------
Shinhan Bank (Banks-Major
Regional)(a) 75,747 1,808,460
- --------------------------------------------------------------
21,500,636
- --------------------------------------------------------------
SWITZERLAND-0.00%
UBS A.G. (Banks-Major Regional) 1 261
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
TAIWAN-4.76%
Austek Computer Inc.
(Computers-Hardware)(a) 441 $ 5,965
- --------------------------------------------------------------
Asustek Computer Inc. GDR
(Computers- Hardware) (Acquired
05/23/97; Cost $524,203)(a)(c) 106,418 1,439,303
- --------------------------------------------------------------
Cathay Life Insurance Co., Ltd.
(Insurance Brokers) 684,000 2,447,339
- --------------------------------------------------------------
China Development Industrial Bank
Inc. (Investment Management)(a) 669,600 1,228,624
- --------------------------------------------------------------
Compeq Manufacturing Co., Ltd.
(Computers-Hardware) 229,000 1,085,474
- --------------------------------------------------------------
Delta Electronics, Inc.
(Electronics- Component
Distributors) 350,400 1,243,009
- --------------------------------------------------------------
Hon Hai Precision Industry
(Electronics- Component
Distributors)(a) 253,960 1,382,412
- --------------------------------------------------------------
Nan Ya Plastic Corp.
(Chemicals-Specialty)(a) 87,443 139,053
- --------------------------------------------------------------
8,971,179
- --------------------------------------------------------------
THAILAND-0.46%
Siam Commercial Bank, 5.25% Pfd.
144A (Banks-Regional) (Acquired
04/29/99; Cost $867,622)(a)(c) 1,248,542 875,697
- --------------------------------------------------------------
TURKEY-3.91%
Haci Omer Sabanci Holding A.S.
(Investment Management)(a) 101,501,500 2,784,518
- --------------------------------------------------------------
Turkiye Is Bankasi (Isbank)
(Banks-Money Center) 38,753,700 1,903,766
- --------------------------------------------------------------
Yapi ve Kredi Bankasi A.S.
(Banks-Money Center)(a) 111,613,600 2,677,404
- --------------------------------------------------------------
7,365,688
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interest (Cost
$171,576,785) 182,823,078
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. DOLLAR DENOMINATED
NON-CONVERTIBLE BONDS &
NOTES-0.04%
FOODS-0.04%
Grupo Azucarero Mexico (Foods),
Sr. Unsec. Notes, 11.50%,
01/15/05 $ 158,000 68,335
- --------------------------------------------------------------
SOVEREIGN DEBT-0.00%
Bank of Foreign Economic Affairs
(Vnesheconombank) (Russia),
Interest in Arrears Notes,
5.968%, 12/15/15(d) $ 45,756 $ 3,432
- --------------------------------------------------------------
Total U.S. Dollar Denominated
Non-Convertible Bonds &
Notes (Cost $75,530) 71,767
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-1.93%(E)
State Street Bank & Trust Co.,
4.85%, 05/03/99 (Cost
$3,636,000)(f) 3,636,000 $ 3,636,000
- --------------------------------------------------------------
TOTAL INVESTMENTS-98.91% 186,530,845
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.09% 2,059,884
- --------------------------------------------------------------
NET ASSETS-100.00% $188,590,729
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Deb. - Debentures
GDR - Global Depositary Receipt
Pfd. - Preferred
Rts. - Rights
Sr. - Senior
Unsec. - Unsecured
Wts. - Warrants
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Each unit represents one preferred share of Unibanco and one preferred "B"
share of Unibanco Holdings.
(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
aggregate market value of these securities at 04/30/99 was $13,096,003 which
represents 6.94% of the Fund's net assets.
(d) The coupon rate shown in floating rate note represents the rate at period
end.
(e) 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.
(f) Repurchase agreement entered into 04/30/99 with a maturing value of
$3,636,000. Collateralized by $3,085,000 U.S. Treasury Note, 10.75% due
02/15/03 with a market value at 04/30/99 of $3,709,713.
See Notes to Financial Statements.
7
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $175,288,315) $186,530,845
- ------------------------------------------------------------
Foreign currencies, at value (cost $5,868,539) 5,894,289
- ------------------------------------------------------------
Receivables for:
Investments sold 625,552
- ------------------------------------------------------------
Fund shares sold 95,212
- ------------------------------------------------------------
Dividends and interest 654,682
- ------------------------------------------------------------
Total assets 193,800,580
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 2,765,221
- ------------------------------------------------------------
Fund shares reacquired 309,735
- ------------------------------------------------------------
Amount due to custodian bank 1,220,967
- ------------------------------------------------------------
Accrued advisory fees 356,752
- ------------------------------------------------------------
Accrued distribution fees 241,794
- ------------------------------------------------------------
Accrued administrative services fees 8,210
- ------------------------------------------------------------
Accrued transfer agent fees 21,872
- ------------------------------------------------------------
Accrued trustees' fees 10,000
- ------------------------------------------------------------
Accrued operating expenses 275,300
- ------------------------------------------------------------
Total liabilities 5,209,851
- ------------------------------------------------------------
Net assets applicable to shares outstanding $188,590,729
- ------------------------------------------------------------
NET ASSETS:
Class A $138,212,359
============================================================
Class B $ 49,780,503
============================================================
Class C $ 68,735
============================================================
Advisor Class $ 529,132
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 14,522,952
============================================================
Class B 5,253,375
============================================================
Class C 7,253
============================================================
Advisor Class 55,640
============================================================
Class A:
Net asset value and redemption price per
share $ 9.52
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $9.52
divided by 95.25%) $ 9.99
============================================================
Class B:
Net asset value and offering price per share $ 9.48
============================================================
Class C:
Net asset value and offering price per share $ 9.48
============================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 9.51
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $93,496 foreign withholding
tax) $ 1,329,164
- ------------------------------------------------------------
Interest 311,203
- ------------------------------------------------------------
Securities lending 87,081
============================================================
Total investment income 1,727,448
============================================================
EXPENSES:
Advisory fees 582,011
- ------------------------------------------------------------
Administrative services fees 15,537
- ------------------------------------------------------------
Custodian fees 45,818
- ------------------------------------------------------------
Distribution fees -- Class A 177,068
- ------------------------------------------------------------
Distribution fees -- Class B 95,327
- ------------------------------------------------------------
Distribution fees -- Class C 20
- ------------------------------------------------------------
Transfer agent fees -- Class A 308,792
- ------------------------------------------------------------
Transfer agent fees -- Class B 58,894
- ------------------------------------------------------------
Transfer agent fees -- Class C 12
- ------------------------------------------------------------
Transfer agent fees -- Advisor Class 780
- ------------------------------------------------------------
Interest 2,925
- ------------------------------------------------------------
Printing 200,714
- ------------------------------------------------------------
Other 39,081
- ------------------------------------------------------------
Total expenses 1,526,979
- ------------------------------------------------------------
Less: Expenses paid indirectly (5,759)
- ------------------------------------------------------------
Fees waived by advisor (372,049)
- ------------------------------------------------------------
Net expenses 1,149,171
- ------------------------------------------------------------
Net investment income 578,277
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES
Net realized gain (loss) from:
Investment securities (15,352,045)
- ------------------------------------------------------------
Foreign currencies (255,304)
- ------------------------------------------------------------
(15,607,349)
- ------------------------------------------------------------
Net unrealized appreciation of:
Investment securities 38,258,827
- ------------------------------------------------------------
Foreign currencies 21,116
- ------------------------------------------------------------
38,279,943
- ------------------------------------------------------------
Net gain from investment securities and
foreign currencies 22,672,594
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $ 23,250,871
============================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 12
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 1999 and the year ended October 31, 1998
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1999 1998
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 578,277 $ 6,869,096
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies (15,607,349) (83,359,123)
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 38,279,943 13,741,429
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 23,250,871 (62,748,598)
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (1,347,740) (11,841,080)
- --------------------------------------------------------------------------------------------
Class B (1,878) (1,499)
- --------------------------------------------------------------------------------------------
Advisor Class (510) (46)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A 29,885,132 (295,354,688)
- --------------------------------------------------------------------------------------------
Class B 48,562,895 226,865
- --------------------------------------------------------------------------------------------
Class C 66,458 --
- --------------------------------------------------------------------------------------------
Advisor Class 475,047 40,312
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 100,890,275 (369,678,734)
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 87,700,454 457,379,188
- --------------------------------------------------------------------------------------------
End of period $ 188,590,729 $ 87,700,454
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 329,003,532 $ 250,014,000
- --------------------------------------------------------------------------------------------
Undistributed net investment income 334,055 1,105,906
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (152,000,612) (136,393,263)
- --------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities and foreign currencies 11,253,754 (27,026,189)
- --------------------------------------------------------------------------------------------
$ 188,590,729 $ 87,700,454
============================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
April 30, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Developing Markets 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 assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's primary investment objective is long-term growth of capital and its
secondary investment objective is income, to the extent consistent with seeking
growth of capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
A. 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 $134,888,354 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.
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. 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
10
<PAGE> 14
are included with the net realized and unrealized gain or loss from
investments.
F. 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 Fund may enter into a forward foreign currency
contract to attempt to minimize the risk to the Fund from adverse changes
in the relationship between currencies. The Fund may also enter into a
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 Fund could be exposed to risk if counterparties
to the contracts are unable to meet the terms of their contracts or if the
value of the foreign currency changes unfavorably.
G. Foreign Securities-There are certain additional considerations and risks
associated with investing in foreign securities and currency transactions
that are not inherent in investments of domestic origin. The Fund's
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.
H. Indexed Securities-The Fund may invest in indexed securities whose value is
linked either directly or indirectly to changes in foreign currencies,
interest rates, equities, indices, or other reference instruments. Indexed
securities may be more volatile than the reference instrument itself, but
any loss is limited to the amount of the original investment.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
INVESCO Asset Management Limited is the Fund's sub-advisor and
sub-administrator. The Fund pays AIM investment management and administration
fees at an annual rate of 0.975% on the first $500 million of the Fund's average
daily net assets, plus 0.95% on the next $500 million of the Fund's average
daily net assets, plus 0.925% on the next $500 million of the Fund's average
daily net assets, plus 0.90% on the Fund'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 $372,049.
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 $282,400 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 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 $177,068, $95,327 and $20, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $4,655 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. During the six months ended April 30,
1999, AIM Distributors received $5,695 in contingent deferred sales charges
imposed on redemptions of Fund 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 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 $5,759 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $5,759
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.
11
<PAGE> 15
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.
For the six months ended April 30, 1999, the average outstanding daily balance
of bank loans for the Fund was $105,992 with a weighted average interest rate of
5.54%. Interest expense for the Fund for the six months ended April 30, 1999 was
$2,925.
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 $16,023,681 were on
loan to brokers. The loans were secured by cash collateral of $16,817,875
received by the Fund. For the six months ended April 30, 1999, the Fund received
fees of $87,081 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.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 1999 was
$144,489,554 and $70,111,566, 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 $ 32,069,938
- ----------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (24,963,370)
- ----------------------------------------------------------------
Net unrealized appreciation of investment
securities $ 7,106,568
================================================================
</TABLE>
Cost of investments for tax purposes is $179,424,277.
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 1,968,438 $ 24,962,641 486,628 $ 5,011,027
- ---------------------------------------------------------------------------------------------------------------------
Class B 150,187 10,673,842 30,654 314,666
- ---------------------------------------------------------------------------------------------------------------------
Class C* 7,253 66,458 -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor 18,238 268,047 4,782 49,262
- ---------------------------------------------------------------------------------------------------------------------
Issued in connection with acquisition**:
Class A 5,187,180 39,204,872 -- --
- ---------------------------------------------------------------------------------------------------------------------
Class B 5,660,631 42,680,510 -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor 64,652 488,222 -- --
- ---------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 125,859 932,616 676,257 8,203,222
- ---------------------------------------------------------------------------------------------------------------------
Class B 254 1,878 124 1,499
- ---------------------------------------------------------------------------------------------------------------------
Advisor 69 510 4 46
- ---------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (4,374,679) (35,214,997) (25,963,398) (308,568,937)
- ---------------------------------------------------------------------------------------------------------------------
Class B (578,262) (4,793,335) (10,213) (89,300)
- ---------------------------------------------------------------------------------------------------------------------
Advisor (31,196) (281,732) (909) (8,996)
=====================================================================================================================
8,198,624 $ 78,989,532 (24,776,071) $(295,087,511)
=====================================================================================================================
</TABLE>
* Class C shares commenced on March 1, 1999.
**On February 12, 1999 pursuant to a plan of reorganization and termination, the
AIM Emerging Markets Fund ("Emerging Markets Fund") transferred all of its
assets to the Fund. The Fund assumed all of the liabilities of the Emerging
Markets Fund. Shareholders of the Emerging Markets Fund were issued full and
fractional shares of the applicable class of the Fund. The acquisition, which
was approved by the shareholders of Emerging Markets Fund on February 10, 1999
was accomplished by an exchange of 10,912,463 shares of the Fund for the
11,087,719 shares then outstanding of the Emerging Markets Fund. Based on the
opinion of Fund counsel, the reorganization qualified as a tax-free
reorganization for federal income tax purposes with no gain or loss recognized
to the Funds or its shareholders. Emerging Markets Fund's net assets,
including ($18,098,264) of unrealized depreciation, were combined with the
Fund for total net assets after the acquisition of $159,666,366.
12
<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 TEN MONTHS YEAR ENDED JANUARY 11,
ENDED ENDED DECEMBER 31, 1994 TO
APRIL 30, OCTOBER 31, OCTOBER 31, ------------------- DECEMBER 31,
1999(a) 1998(a) 1997(b) 1996 1995 1994
--------- ----------- ----------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.53 $ 12.56 $ 13.84 $ 11.60 $ 12.44 $ 15.00
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Income from investment operations:
Net investment income 0.06 0.39(c)(d) 0.25 0.53 0.72 0.35
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Net realized and unrealized gain (loss)
on investments 2.05 (5.10) (1.53) 2.19 (0.84) (2.46)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Net increase (decrease) from investment
operations 2.11 (4.71) (1.28) 2.72 (0.12) (2.11)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Redemption fees retained -- 0.28 -- -- -- --
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Distributions to shareholders:
From net investment income (0.12) (0.60) -- (0.48) (0.72) (0.35)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
From net realized gain on investments -- -- -- -- -- (0.10)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Total distributions (0.12) (0.60) -- (0.48) (0.72) (0.45)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Net asset value, end of period $ 9.52 $ 7.53 $ 12.56 $ 13.84 $ 11.60 $ 12.44
=========================================== ========= =========== =========== ======== ======== =============
Total return(e) 28.52% (37.09)% (9.25)% 23.59% (0.95)% (14.07)%
=========================================== ========= =========== =========== ======== ======== =============
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 138,212 $ 87,517 $ 457,379 $504,012 $422,348 $ 452,872
=========================================== ========= =========== =========== ======== ======== =============
Ratio of net investment income to average
net assets:
With fee waivers 1.06%(f) 3.84% 2.03%(g) 4.07% 6.33% 2.75%(g)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Without fee waivers 0.44%(f) 3.43% 1.95%(g) 4.04% 6.30% 2.75%(g)
=========================================== ========= =========== =========== ======== ======== =============
Ratio of expenses to average net assets
excluding interest expense:
With fee waivers 1.82%(f) 1.73% 1.75%(g) 1.82% 1.77% 2.01%(g)
=========================================== ========= =========== =========== ======== ======== =============
Without fee waivers 2.44%(f) 2.14% 1.83%(g) 1.85% 1.80% 2.01%(g)
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Ratio of interest expense to average net
assets (Note 5) N/A 0.20% N/A N/A N/A N/A
- ------------------------------------------- --------- ----------- ----------- -------- -------- -------------
Portfolio turnover rate 59% 111% 184%(g) 138% 75% 56%(g)
=========================================== ========= =========== =========== ======== ======== =============
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Prior to November 1, 1997 the Fund was known as G.T. Developing Markets
Fund, Inc. All capital shares issued and outstanding on October 31, 1997
were reclassified as Class A shares.
(c) Before reimbursement the net investment income per share would have been
reduced by $0.04.
(d) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(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 $101,349,404.
(g) Annualized.
N/A Not Applicable.
13
<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 CLASS C
------------------------ ------------ ADVISOR CLASS
YEAR MARCH 1, -------------------------
ENDED 1999 YEAR ENDED
APRIL 30, OCTOBER 31, TO APRIL 30, APRIL 30, OCTOBER 31,
1999(a) 1998(a) 1999(a) 1999(a) 1998(a)
--------- ----------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.49 $ 12.56 $ 7.47 $ 7.55 $ 12.56
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Income from investment operations:
Net investment income (loss) 0.02 0.31(b)(c) -- 0.20 0.40(b)(c)
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Net realized and unrealized gain (loss) on investments 2.05 (5.07) 2.01 1.92 (5.09)
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Net increase (decrease) from investment operations 2.07 (4.76) 2.01 2.12 (4.69)
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Redemption fees retained -- 0.28 -- -- 0.28
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Distributions to shareholders:
From net investment income (0.08) (0.59) -- (0.16) (0.60)
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Net asset value, end of period $ 9.48 $ 7.49 $ 9.48 $ 9.51 $ 7.55
========================================================= ======== ========== ========= ======== =========
Total return (based on net asset value)(d) 27.96% (39.76)% 26.91% 28.61% (42.63)%
========================================================= ======== ========== ========= ======== =========
Ratios and supplemental data:
Net assets, end of period (in 000's) $49,781 $ 154 $ 69 $ 529 $ 29
========================================================= ======== ========== ========= ======== =========
Ratio of net investment income (loss) to average net
assets:
With fee waivers 0.38%(e) 3.09% 0.38%(e) 1.38%(e) 4.09%
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Without fee waivers (0.24)%(e) 2.68% (0.24)%(e) 0.76%(e) 3.68%
========================================================= ======== ========== ========= ======== =========
Ratio of expenses to average net assets excluding
interest expense:
With fee waivers 2.50%(e) 2.48% 2.50%(e) 1.50%(e) 1.48%
- --------------------------------------------------------- -------- --------- --------- -------- ---------
Without fee waivers 3.12%(e) 2.89% 3.12%(e) 2.12%(e) 1.89%
========================================================= ======== ========== ========= ======== =========
Ratio of interest expense to average net assets (Note 5) N/A 0.20% N/A N/A 0.20%
========================================================= ======== ========== ========= ======== =========
Portfolio turnover rate 59% 111% 59% 59% 111%
========================================================= ======== ========== ========= ======== =========
</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 $0.04.
(c) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(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 $19,329,729,
$12,165 and $255,585 for Class B, Class C and Advisor Class, respectively.
N/A Not Applicable.
14
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Developing Markets Fund
and Board of Trustees of AIM Investment Funds:
In our opinion, the accompanying statement of assets and
liabilities, including the portfolio of investments, and
the related statements of operations and of changes in
net assets and the financial highlights present fairly,
in all material respects, the financial position of the
AIM Developing Markets Fund at April 30, 1999, and the
results of its operations, the changes in its net assets
and the financial highlights for the periods indicated
therein, in conformity with generally accepted accounting
principles. These financial statements and financial
highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion
on these financial statements based on our audits. We
conducted our audits of these financial statements in
accordance with generally accepted auditing standards
which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our
audits, which included confirmation of securities at
April 30, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion
expressed above.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
June 28, 1999
15
<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 SUB-ADVISOR
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President INVESCO Asset Management Ltd.
11 Devonshire Square
Arthur C. Patterson Carol F. Relihan London EC2M 4YR
Managing Partner, Accel Partners Vice President England
(a venture capital firm)
Mary J. Benson TRANSFER AGENT
Ruth H. Quigley Assistant Vice President and
Private Investor Assistant Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Sheri Morris Houston, TX 77210-4739
Assistant Vice President and
Assistant Treasurer CUSTODIAN
Nancy L. Martin State Street Bank and Trust Company
Assistant Secretary 225 Franklin Street
Boston, MA 02110
Ofelia M. Mayo
Assistant Secretary COUNSEL TO THE FUND
Kathleen J. Pflueger Kirkpatrick & Lockhart LLP
Assistant Secretary 1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL TO THE TRUSTEES
Paul, Hastings, Janofsky & Walker LL
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
160 Federal St.
Boston, MA 02110
</TABLE>
16
<PAGE> 20
HOW AIM MAKES INVESTING EASY FOR YOU
o LOW INITIAL INVESTMENT. You can get your investment program started for as
little as $500. Subsequent investments can be made for only $50.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. Distributions may
be received in cash or reinvested in the Fund free of charge. Over time,
the power of compounding can significantly increase the value of your
assets.
o AUTOMATIC INVESTMENT PLAN. You may building your investment by regularly
purchasing additional shares. Pre-authorized checks for $50 or more can be
drafted monthly from your personal checking account.
o EASY ACCESS TO YOUR MONEY. Your shares may be redeemed at net asset value
any day the New York Stock Exchange is open. The price of shares sold may
be more or less than their original cost, depending on market conditions.
o SYSTEMATIC WITHDRAWAL PLAN. You may elect to receive checks of at least $50
monthly or quarterly through a systematic withdrawal plan.
o EXCHANGE PRIVILEGE. As your goals change, you may exchange all or part of
your assets for those of other funds within the same share class of The AIM
Family of Funds(R). The exchange privilege may be modified or discontinued
for any of the AIM funds. Certain restrictions apply.
o RETIREMENT PLANS. You may purchase shares of an AIM fund for your
Individual Retirement Account (IRA), Roth IRA, or any other type of
retirement plan, and earn tax-deferred dollars for your retirement.
o TOLL-FREE ACCESS. Current shareholders can call our AIM Investor Line at
800-246-5463 for 24-hour-a-day account information. Or, of course, you may
contact your financial consultant for assistance.
o WWW.AIMFUNDS.COM. As a current shareholder, you can check account balances
24 hours a day over the Internet. State-of-the-art encryption lets you send
us questions that include confidential information without the fear of
eavesdropping, tampering, or forgery.
----------------------------------
CURRENT SHAREHOLDERS
CAN CALL OUR
AIM INVESTOR LINE AT
800-246-5463
FOR 24-HOUR-A-DAY
ACCOUNT INFORMATION.
----------------------------------
AIM DEVELOPING MARKETS FUND
<PAGE> 21
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund(1) AIM Money Market Fund leadership in the mutual-fund industry
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately $112
AIM Capital Development Fund billion in assets for more than 6.3 million
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS shareholders, including individual investors,
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund corporate clients and financial institutions
AIM Large Cap Growth Fund AIM Asian Growth Fund as of March 31, 1999.
AIM Mid Cap Equity Fund(2), (A) AIM Developing Markets Fund(2) The AIM Family of Funds--Registered
AIM Select Growth Fund(3) AIM Europe Growth Fund(2) Trademark-- is distributed nationwide, and
AIM Small Cap Growth Fund(2), (B) AIM European Development Fund AIM today is the 10th-largest mutual-fund
AIM Small Cap Opportunities Fund AIM International Equity Fund complex in the United States in assets under
AIM Value Fund AIM Japan Growth Fund(2) management, according to Strategic Insight,
AIM Weingarten Fund AIM Latin American Growth Fund(2) an independent mutual-fund monitor.
AIM New Pacific Growth Fund(2)
GROWTH & INCOME FUNDS
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Balanced Fund
AIM Basic Value Fund(2), (C) GLOBAL GROWTH & INCOME FUNDS
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.
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