<PAGE> 1
SEMIANNUAL REPORT / APRIL 30 1999
AIM EMERGING MARKETS DEBT FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
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[COVER IMAGE]
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REFLECTION OF THE SUN IN THE SEA BY NICOLAS TARKHOFF
AT THE DAWN OF EACH NEW DAY, AIM SEARCHES THE INVESTMENT HORI-
ZON FOR NEW OPPORTUNITIES. WHILE NEGATIVE EVENTS CAN CREATE
VOLATILE INVESTMENT CONDITIONS IN EMERGING MARKETS, AIM
BELIEVES THAT A DISCIPLINED INVESTMENT APPROACH, SUPPORTED BY
THOROUGH RESEARCH AND ANALYSIS, CREATES OPPORTUNITY FOR PROFIT
IN THE FACE OF ADVERSITY.
-------------------------------------
AIM Emerging Markets Debt Fund is for shareholders who primarily seek high
current income and secondarily seek growth of capital. The Fund invests
primarily in debt securities of issuers located in emerging markets.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Emerging Markets Debt Fund (formerly GT Global High Income Fund)
performance figures are historical and reflect reinvestment of all
distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund's Class B and Class C shares will differ from
that of Class A shares due to differences in sales charge structure and Fund
expenses.
o The average annual total returns, including sales charges, as of April 30,
1999, were: For Class A shares, -30.13% for 1 year, 7.07% for 5 years, and
8.33% since inception (10/22/92). For Class B shares, -30.35% for 1 year,
7.19% for 5 years, and 8.45% since inception (10/22/92).
o Class C shares were opened to the public on March 1, 1999. Cumulative total
return since inception, including sales charges, was 7.98% as of April 30,
1999. Because Class C shares have been offered for less than one year, all
total return figures for Class C shares reflect cumulative total return that
has not been annualized.
o For Advisor Class shares, average annual total return as of April 30, 1999
was -26.27% for 1 year and 8.29% since inception (6/1/95). Sales charges do
not apply to Advisor Class shares.
o Beginning March 1, 1999, Advisor Class shares were closed to new investors.
o The Fund's 30-day distribution rate reflects its most recent monthly
dividend distribution multiplied by 12 and divided by the most recent
month-end maximum offering price. The Fund's distribution rate and 30-day
SEC yield will differ.
o The 30-day yield is calculated on the basis of a formula defined by the
Securities and Exchange Commission (SEC). The formula is based on the
portfolio's potential earnings from dividends, interest, yield-to-maturity
or yield-to-call of its holdings, net of all expenses and expressed on an
annualized basis.
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.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The J.P. Morgan EMBI (Emerging Markets Bond Index) (Brady) tracks total
returns for traded external-debt Brady bonds in 10 emerging bond markets. It
includes the effects of reinvested coupons and is measured in U.S. dollars.
Brady bonds are foreign bonds collateralized by U.S.
Treasury bonds.
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 EMERGING MARKETS DEBT FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable.
Chairman of During March and April, AIM participated in an
the Board of industrywide test that gave us a chance to see how our
THE FUND technology systems might be affected by the changeover to
APPEARS HERE] the year 2000 (Y2K). Everything went as well as we had
hoped; in general, the industry sailed through the testing
process with flying colors. The financial industry has been
seen as a leader in planning for year-2000 concerns. Thus,
it was no surprise to most participants that the test was an
overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in
the United States and to follow transactions through a
typical trading cycle--from order entry to the settlement process. Investment
banks, broker-dealers, custodian banks and mutual-fund companies all worked
together to make this possible. Approximately 400 firms were involved in the
testing; AIM was one of 70 asset managers.
TEST RESULTS EXCELLENT
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. During 1998, we made substantial progress on
our preparations. We are now in the final phases of the project, continually
testing internal applications and our interfaces with outside parties. On the
investment side, our portfolio-management staff is evaluating the Y2K
preparedness of the companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if there are
unexpected problems. Our plans will give AIM employees guidelines to follow for
a wide variety of situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
-------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
-------------------------------------
AIM EMERGING MARKETS DEBT FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
RALLY IN EMERGING MARKETS SPURS
FUND PERFORMANCE
HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
Renewed investor confidence in the emerging-markets sector resulted in a
resurgence in both the equity and debt markets. The Fund was able to capitalize
on this resurgence, producing a total return of 15.07% for Class A shares,
14.71% for Class B shares and 15.32% for Advisor Class shares. The return for
Class A, B and Advisor Class shares bested the J.P. Morgan EMBI (Emerging
Markets Bond Index) (Brady) total return of 14.66% during the reporting period.
Class C shares, which opened on March 1, 1999, finished the two-month period
with a total return of 8.98%. These returns are at net asset value, without a
sales charge.
The Fund provided a steady flow of income to its shareholders during the
reporting period. For the six months ended April 30, 1999, the Fund's 30-day
distribution rate at net asset value was 10.55% for Class A shares, 9.92% for
both Class B and Class C shares and 10.94% for Advisor Class Shares. The Fund's
30-day SEC yield at maximum offering price was 8.73% for Class A shares, 8.52%
for share classes B and C and 9.57% for Advisor Class Shares.
WHAT CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
As the reporting period began, investor confidence in the emerging-markets
sector was at a tremendous low due to a series of economic crises affecting
Asia and Russia. In the face of waning investor demand, prices for
emerging-markets securities had plummeted.
The decline in prices, however, was not indicative of the true merit of many
of the debt securities available on the market. Our economic research showed
that many countries in the sector maintained relatively strong economies despite
the problems of neighboring countries. Based on this research, we used the
market low as an opportunity to make fundamentally sound purchases at extremely
low prices.
This proved to be a prudent strategy. A series of reductions in the federal
funds rate by the Federal Reserve Board returned liquidity to the markets, and
a period of relative stability in Brazil has resulted in a return of investor
confidence. As a result, we have witnessed an increase in demand for
emerging-markets debt securities, and the subsequent price appreciation that
typically follows such demand.
WHAT DO YOU LOOK AT WHEN MAKING AN INVESTMENT IN EMERGING-MARKETS DEBT
SECURITIES?
Our investment decisions are made on a country-by-country basis, and we have
found that we are most successful when we take a top-down, macroeconomic
approach to evaluating a country's economy. We review a number of economic
variables to gain a reliable idea of each country's current and future economic
strength. Based on this information, we develop a credit rating for that
country.
By rating a country based on solid economic and mathematical facts, we are
able to take an unbiased, disciplined look at each country. The benefits of this
approach are twofold. While this approach helps us make more reasonable
investment decisions, it also gives us the confidence and discipline to hold
onto our investments during emotionally charged events such as the sudden
global sell-off last fall.
However, a purely quantitative approach is not completely flawless. Factors
such as investor fear, natural disasters and wars often affect a security's
value as well, and these factors are often difficult both to measure and to
predict. The situation in Kosovo is a good example of this.
HOW HAS THE NORTH ATLANTIC TREATY ORGANIZATION'S BOMBING OF YUGOSLAVIA AFFECTED
THE FUND?
We do not currently own any Yugoslavian securities and, as a result, Fund
performance has been left relatively unhindered by the events in Yugoslavia.
However, the war in Kosovo has forced us to reduce our holdings in Bulgaria.
While the country's economic fundamentals remain sound, a large amount of its
exports are shipped through the former Yugoslavia. Although Bulgaria has
received pledges of additional funds from multilateral agencies, the country's
growth prospects could be in jeopardy.
The decision to reduce our debt holdings in a country with such positive
economic fundamentals was unfortunate but necessary. Fund management will
continue to take precautions to prevent any future impediment to Fund
performance should the situation in Kosovo escalate.
THE FUND'S LARGEST COUNTRY ALLOCATIONS ARE IN BRAZIL AND ARGENTINA. HOW HAVE
THOSE INVESTMENTS PERFORMED FOR THE FUND?
The Brazilian markets struggled considerably in the final two months of 1998
and the first month of 1999 as a currency devaluation, a substantial fiscal
deficit, a large stock of domestic debt, and the possibility of a local
currency debt restructuring left investors wary. However, the
-------------------------------------
WE'VE FOUND A NUMBER OF GOOD VALUES
IN LATIN AMERICA, AND CONSEQUENTLY
THIS REGION MAKES UP A LARGE PORTION
OF THE PORTFOLIO.
-------------------------------------
See important Fund and index disclosures inside front cover.
AIM EMERGING MARKETS DEBT FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 4/30/99, based on total net assets
<TABLE>
<CAPTION>
===============================================================================
TOP 5 BOND HOLDINGS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COUNTRY SECURITY COUPON MATURITY % OF
PORTFOLIO
1. Brazil Series C Bonds 8.00% 04/14 12.43%
2. Brazil Floating Rate Disc. Notes 5.875% 04/24 8.93
3. Argentina Senior Notes 11.447% 04/05 7.63
4. Brazil Bonds 11.625% 04/04 7.61
5. Mexico Bonds 10.375% 02/09 6.21
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
===============================================================================
TOP 5 COUNTRIES
- -------------------------------------------------------------------------------
<S> <C>
Brazil 28.97%
Argentina 20.17%
Mexico 13.54%
Venezuela 6.92%
Bulgaria 4.18%
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
===============================================================================
GEOGRAPHIC ALLOCATION
- -------------------------------------------------------------------------------
<S> <C>
PIE CHART
EASTERN EUROPE 8.91%
U.S. & OTHER 2.97%
AFRICA 6.39%
ASIA-PACIFIC 3.20%
LATIN AMERICA 78.53%
The Fund's portfolio is subject to change, and there is no assurance that the
Fund will continue to hold any particular security.
===============================================================================
</TABLE>
new central bank governor, Arminio Fraga, has taken decisive action to gain
control of inflation and soothe the nerves of foreign investors. The sense of
mild panic that gripped the market in late January has dissipated and, in
recent months, the Brazilian markets have rallied. This has helped the
performance of our Brazilian debt securities; in fact, we have been adding to
the number of our holdings in Brazil.
Argentina began the reporting period as our largest weighting in the
emerging markets. However, as the recession in that country has worsened, we
have been forced to reduce our holdings in Argentina in recent months. While
the International Monetary Fund (IMF) has relaxed its fiscal targets for
Argentina in 1999, the combination of a very weak economy and an upcoming
election keep us cautious for the near term.
WHAT OTHER COUNTRIES HAVE PROVIDED GOOD VALUE TO THE PORTFOLIO?
We've found a number of good values in Latin America, and consequently this
region makes up a large portion of the portfolio. In addition to our holdings
in Brazil and Argentina, we maintain positions in Peru, Panama, Ecuador and
Venezuela.
The portfolio has a large weighting in the debt securities of Mexico, whose
economy has benefited from strong U.S. growth, a boost in oil prices and lower-
than-expected inflation in the first quarter of 1999. We believe that, relative
to most emerging-markets countries, Mexico offers good value and a relatively
stable investing environment for emerging-markets debt investors.
In Asia, we have started to see some improvement as many countries are
starting to recover from the economic problems that have plagued the region
over the last year and a half. Korea appears to be one of the strongest
recovery stories, and we maintain a small position there. Realistically,
though, it is too soon to tell if this recovery can actually be sustained over
the long term.
WHAT IS YOUR OUTLOOK FOR THE FUND?
The emerging markets have enjoyed a period of relative calm during the last
several months. This is largely attributable to renewed investor confidence and
restored global liquidity. For the moment, it appears that the economic crises
of the last year and a half are behind us.
However, in every emerging-markets scenario, there will always be a few
short-term concerns on which we will focus our attention. In light of strong
U.S. economic growth, we may see a hike in interest rates in the coming months.
In addition, a contracting economy and struggling currency in Argentina could
result in some short-term fluctuations in the market. In spite of this, we
believe the emerging-markets sector is adequately equipped to handle these
events should they occur. We maintain our belief that the emerging markets
sector offers excellent long-term value.
See important Fund and index disclosures inside front cover.
AIM EMERGING MARKETS DEBT FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
TIME FOR A FINANCIAL TUNE-UP?
GET HELP FROM YOUR FINANCIAL CONSULTANT
===============================================================================
TIME AND MARKETS SHIFT BALANCE
PIE CHART
12/31/93 12/31/98
STOCK FUNDS 50% 67%
BOND FUNDS 50% 33%
Market performance can affect the allocation of a portfolio. This example
illustrates an initial investment of $50,000 in equity funds and $50,000 in
bond funds. Five years later, the assets have shifted to $146,890 in stock
funds and $71,028 in bond funds, due to the strong performance of the stock
market.
===============================================================================
Keeping track of your investment may require more than just glancing at its
total value. If you haven't checked the asset allocation of your portfolio in a
while, you should. It may look different now.
OUT OF BALANCE
Say you invested $50,000 in equity funds and $50,000 in fixed-income funds on
December 31, 1993, and simply reinvested your income and capital-gains
distributions for five years, making no new investments or withdrawals. (For
this example, we're using the S&P 500 Index and Lehman Aggregate Bond Index as
indicators of stock and bond performance.*) During those five years, stocks
produced average annual total returns of 24.05%, while bonds grew only 7.27%
per year on average. As a result, you'd have $146,890 in stock funds and
$71,028 in bond funds for a 67/33 allocation on December 31, 1998. If you
wanted to bring your allocation back into balance, you'd need to shift $37,931
from stock to fixed-income funds.
TAX CONSEQUENCES
One way to rebalance is to shift your assets among different funds: selling
equity shares and moving the proceeds into your fixed-income funds. But keep in
mind that this step may trigger tax consequences, since the movement of shares
from one fund to another represents the sale of a security.
Alternatively, you can let your asset allocation change gradually by
altering the proportions of your new investments. Simply raise the amount you
invest in fixed-income funds and lower the amount going into equity funds.
TAX-SHELTERED PLANS
Rebalancing within a tax-sheltered plan, such as a 401(k) or IRA, makes even
more sense, since there are no tax consequences for selling and buying new
shares.
PERIODIC CHECK-UPS
The key allocation to watch is your overall stock and fixed-income mix. It's
that mix that will have the biggest influence on your risk and return. However,
rebalancing doesn't mean fiddling constantly with your account or attempting to
time the market by moving money around to chase the hottest sectors. It simply
means revisiting your portfolio periodically to make sure it's still right for
you. Your financial consultant should be able to help you determine if your
current portfolio composition is meeting your short- and long-term financial
goals. That's why we recommend regular visits with your consultant as a way to
keep an eye on your nest egg.
YOU AND YOUR FINANCIAL CONSULTANT
Once a year, you and your financial consultant should meet to look ahead,
review investments and take another look at your goals, according to the Forum
for Investor Advice, a nonprofit association that educates investors about the
role and value of professional financial consultants.
*The Lehman Aggregate Bond Index is an unmanaged index generally considered
representative of corporate debt securities. The Standard & Poor's Composite
Index of 500 Stocks (S&P 500) is a group of unmanaged securities widely
regarded by investors to be representative of the stock market in general.
Results shown assume the reinvestment of dividends. An investment cannot be
made in any index listed.
AIM EMERGING MARKETS DEBT FUND
4
<PAGE> 7
PHOTO
SEMIANNUAL REPORT / FOR CONSIDERATION
Financial consultants can help you with every kind of financial goal, whether
that's saving up for a house, eliminating debt or saving for a comfortable
retirement. A consultant who knows you well and understands your needs can make
all the difference in your financial future. He or she can
o evaluate your total financial situation and help you formulate a
comprehensive financial plan;
o explain different types of investments, as well as their potential risks
and benefits;
o suggest an investment portfolio that can handle changing market conditions;
and
o help you make clear-headed decisions during market volatility.
GETTING THE MOST FROM YOUR PLANNING SESSION
Your consultant needs a complete picture of your financial status to prepare a
workable plan. Come prepared to talk about your financial situation, your goals
and your feelings about risk. And don't be afraid to ask lots of questions.
Good financial consultants take investor education seriously, so take advantage
of their store of knowledge and materials.
The Forum for Investor Advice suggests that you discuss the following with
your financial consultant:
o changes in the financial markets
o changes in your goals and current situation
o retirement plans
o estate planning
o outlook for the markets
Take along our checklist (right) to get you started on the path to good
planning. And don't forget to stay in touch. Maintaining regular contact with
your financial consultant can keep you moving toward your goals, especially
when your life circumstances or financial needs change.
CONSULTATION CHECKLIST
WHAT TO BRING:
o A list of all your assets, including real estate, life insurance, stocks
and bonds, and mutual funds
o A list of all your expenses, including likely future expenses
o A timetable of your financial goals, including an estimate of when you want
to retire
WHAT TO ASK:
o How can I estimate what my goals will cost?
o How much money do I need to invest, and how often?
o How many different kinds of investments do I need?
o How do I determine my risk tolerance?
o What are the possible risks of the investments you've suggested?
o What effect will these investments have on my taxes? What forms will I need
to file?
o How often do I need to revise my plan?
o How will I know how my investments are doing?
o How can I make changes to my plan?
o What kinds of communication will I get from you?
o Where can I get more information on what we've talked about?
o What do I need to do after this meeting?
AIM EMERGING MARKETS DEBT FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
PRINCIPAL(a)
AMOUNT VALUE
<S> <C> <C>
U.S. DOLLAR DENOMINATED NON-CONVERTIBLE BONDS &
NOTES-100.57%
BANKS (MAJOR REGIONAL)-3.20%
Korea Development Bank (South
Korea),
Bonds, 8.89%, 06/16/03(b) $ 3,500,000 $ 3,447,500
- ---------------------------------------------------------------
Bonds, 7.125%, 04/22/04 2,481,000 2,449,950
- ---------------------------------------------------------------
5,897,450
- ---------------------------------------------------------------
BANKS (REGIONAL)-3.20%
Banco Hipotecario S.A.
(Argentina),
Bonds, 13.00%, 12/03/08(c)
(Acquired 11/17/98; Cost
$1,011,250) 1,000,000 1,042,500
- ---------------------------------------------------------------
Sr. Unsec. Unsub. Bonds, 10.00%,
04/17/03(c) (Acquired 04/07/98;
Cost $2,675,169) 2,679,000 2,585,235
- ---------------------------------------------------------------
PDVSA Finance Ltd., Unsec. Bonds,
9.75%, 02/15/10(c) (Acquired
03/31/99; Cost $2,284,452) 2,300,000 2,276,781
- ---------------------------------------------------------------
5,904,516
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.54%
Grupo Azucarero Mexico (Mexico),
Sr. Unsec. Notes, 11.50%,
01/15/05 2,318,000 1,002,535
- ---------------------------------------------------------------
ENTERTAINMENT-1.10%
Grupo Televisa S.A. (Mexico), Sr.
Disc. Notes, 13.25%, 05/15/08(d) 2,400,000 2,034,000
- ---------------------------------------------------------------
FOODS-0.94%
Mastellone Hermanos S.A.
(Argentina), Sr. Bonds, 11.75%,
04/01/08 1,943,000 1,744,738
- ---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.28%
Mechala Group (Jamaica), Series B
Sr. Sec. Gtd. Bonds, 12.75%,
12/30/99 4,134,000 1,033,500
- ---------------------------------------------------------------
Supercanal Holdings S.A.
(Argentina), Sr. Notes, 11.50%,
05/15/05(c) (Acquired 11/05/98;
Cost $1,323,774) 2,600,000 1,323,312
- ---------------------------------------------------------------
2,356,812
- ---------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-4.11%
Petroleos Mexicanos (Mexico), Sr.
Gtd. Sub. Bonds, 9.50%, 09/15/27 8,000,000 7,580,000
- ---------------------------------------------------------------
SOVEREIGN DEBT-86.20%
Algeria Tranche 1 Loan Assignment
(Algeria), Bonds, 6.00%,
09/04/06(c) (Acquired
06/02/98-07/29/98; Cost
$10,275,719) 12,900,000 6,966,000
- ---------------------------------------------------------------
Bank of Foreign Economic Affairs
(Vnesheconombank) (Russia),
Interest in Arrears Notes,
5.968%, 12/15/15(b) 627,107 47,033
- ---------------------------------------------------------------
Principal Loans, 5.968%,
12/15/20(b)(e) 37,242,372 2,746,625
- ---------------------------------------------------------------
Croatia (Croatia), Series A
Floating Rate Bonds, 5.812%,
07/31/10(b) 7,607,000 5,933,224
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL(a)
AMOUNT VALUE
<S> <C> <C>
SOVEREIGN DEBT-(CONTINUED)
Ecuador-Global Bearer (Ecuador),
PDI Bonds, 6.00%, 02/27/15(b) $ 2,944,181 $ 1,218,155
- ---------------------------------------------------------------
Ivory Coast (Ivory Coast), PDI
Bonds, 2.00%, 03/29/18(f) 2,013,376 664,374
- ---------------------------------------------------------------
Jordan (Jordan), Sec. Gtd. Bonds,
5.50%, 12/23/23(f) 6,517,000 4,011,194
- ---------------------------------------------------------------
Morocco Tranche A (Morocco),
Registered Loans, 6.812%,
01/01/09(c) (Acquired 03/11/99;
Cost $2,717,864) 3,370,000 2,746,550
- ---------------------------------------------------------------
Province of Buenos Aires
(Argentina), Unsec. Unsub.
Bonds, 12.50%, 03/15/02 1,100,000 1,135,750
- ---------------------------------------------------------------
Republic of Argentina (Argentina),
Notes, 11.75%, 04/07/09 6,300,000 6,473,250
- ---------------------------------------------------------------
Bonds, 12.125%, 02/25/19 3,680,000 3,822,600
- ---------------------------------------------------------------
Series L Sec. Gtd. Bonds, 6.00%,
03/31/23(f) 6,232,000 4,449,692
- ---------------------------------------------------------------
Sr. Notes, 11.447%, 04/10/05(b) 14,785,000 14,082,713
- ---------------------------------------------------------------
Republic of Brazil (Brazil),
Bonds, 11.625%, 04/15/04 14,398,000 14,038,050
- ---------------------------------------------------------------
Floating Rate Disc. Notes,
5.875%, 04/15/24(b) 24,725,000 16,476,394
- ---------------------------------------------------------------
Series C Bonds, 8.00%, 04/15/14 32,827,024 22,932,171
- ---------------------------------------------------------------
Republic of Bulgaria (Bulgaria),
Series A Sec. Disc. Bonds,
5.875%, 07/28/24(b) 11,224,000 7,715,355
- ---------------------------------------------------------------
Republic of Columbia (Colombia),
Bonds, 9.75%, 04/23/09 2,492,000 2,423,470
- ---------------------------------------------------------------
Republic of Panama (Panama),
Bonds, 8.875%, 09/30/27 2,450,000 2,327,471
- ---------------------------------------------------------------
Bonds, 9.375%, 04/01/29 2,439,000 2,518,268
- ---------------------------------------------------------------
Republic of Peru (Peru), PDI
Bonds, 4.50%, 03/07/17(f) 10,295,000 6,951,133
- ---------------------------------------------------------------
Republic of Turkey (Turkey),
Bonds, 12.00%, 12/15/08 2,384,000 2,424,220
- ---------------------------------------------------------------
United Mexican States (Mexico),
Bonds, 10.375%, 02/17/09 10,668,000 11,454,765
- ---------------------------------------------------------------
Bonds, 11.375%, 09/15/16 2,381,000 2,704,390
- ---------------------------------------------------------------
Venezuela (Venezuela),
FLIRB, Series A Deb., 6.00%,
03/31/07(b) 6,095,200 4,767,476
- ---------------------------------------------------------------
FLIRB, Series B Sec. Deb.,
6.00%, 03/31/07(b) 4,380,930 3,437,597
- ---------------------------------------------------------------
Unsec. Bonds, 9.25%, 09/15/27 6,434,000 4,555,098
- ---------------------------------------------------------------
159,023,018
- ---------------------------------------------------------------
Total U.S. Dollar Denominated
Non-Convertible Bonds & Notes
(Cost $199,652,812) 185,543,069
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
PRINCIPAL(a)
AMOUNT VALUE
<S> <C> <C>
NON-U.S. DOLLAR DENOMINATED GOVERNMENT BONDS &
NOTES(G)-2.26%
IVORY COAST-2.26%
Ivory Coast (Sovereign Debt), PDI
Bonds,
1.90%, 03/29/18(f)
(Cost $6,189,462) FRF 91,562,250 $ 4,166,076
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
WARRANTS-0.41%
SOVEREIGN DEBT-0.41%
Republic of Argentina (Argentina)
Expiring 12/03/99(h) 8,810 265,401
- --------------------------------------------------------------
Expiring 02/25/00(h) 9,630 290,104
- --------------------------------------------------------------
United Mexican States (Mexico),
expiring 02/18/00(h) 4,033 206,187
- --------------------------------------------------------------
Total Warrants (Cost $0) 761,692
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL(a)
AMOUNT
<S> <C> <C>
REPURCHASE AGREEMENT(I)-0.11%
State Street Bank & Trust Co.,
4.85%, 05/03/99(j) (Cost
$206,000) $ 206,000 206,000
- ---------------------------------------------------------------
TOTAL INVESTMENTS-103.35% 190,676,837
- ---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(3.35)% (6,188,134)
- ---------------------------------------------------------------
NET ASSETS-100.00% $184,488,703
===============================================================
</TABLE>
Notes to Schedule of Investments:
(a) Principal amount is in U.S. Dollars, except as indicated by note (g).
(b) The coupon rate shown on floating rate note represents the rate at period
end.
(c) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144 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 4/30/99 was $16,940,378 which
represented 9.18% of the Fund's net assets.
(d) Discounted bond at purchase. Interest rate shown represents the coupon rate
at which the bond will accrue at a specified future date.
(e) Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(f) The coupon rate shown on step up coupon bonds represents the rate at period
end.
(g) Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(h) Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(i) 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.
(j) Repurchase agreement entered into 4/30/99 with a maturing value of $206,000.
Collateralized by $200,000 U.S. Treasury Note, 8.75% due 08/15/00 with a
market value at 04/30/99 of $212,796.
Abbreviations:
Deb. - Debentures
Disc. - Discounted
FLIRB - Front Loaded Interest Reduction Bond
Gtd. - Guaranteed
PDI - Past Due Interest
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $206,048,274) $190,676,837
- ------------------------------------------------------------
Foreign currencies, at value (cost
$12,057,186) 11,227,304
- ------------------------------------------------------------
Cash 154
- ------------------------------------------------------------
Receivables for:
Investments sold 8,730,039
- ------------------------------------------------------------
Fund shares sold 105,653
- ------------------------------------------------------------
Dividends and interest 2,503,693
- ------------------------------------------------------------
Forward contracts 223,021
- ------------------------------------------------------------
Other assets 59,259
- ------------------------------------------------------------
Total assets 213,525,960
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 14,305,891
- ------------------------------------------------------------
Fund shares reacquired 2,326,964
- ------------------------------------------------------------
Loan outstanding 12,000,000
- ------------------------------------------------------------
Accrued advisory fees 146,453
- ------------------------------------------------------------
Accrued distribution fees 140,464
- ------------------------------------------------------------
Accrued administrative service fees 4,092
- ------------------------------------------------------------
Accrued transfer agent fees 33,887
- ------------------------------------------------------------
Accrued trustees' fees 667
- ------------------------------------------------------------
Accrued operating expenses 78,839
- ------------------------------------------------------------
Total liabilities 29,037,257
- ------------------------------------------------------------
Net assets applicable to shares outstanding $184,488,703
- ------------------------------------------------------------
NET ASSETS:
Class A $ 64,722,912
============================================================
Class B $115,600,287
============================================================
Class C $ 58,806
============================================================
Advisor Class $ 4,106,698
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 7,587,643
- ------------------------------------------------------------
Class B 13,554,264
- ------------------------------------------------------------
Class C 6,894
- ------------------------------------------------------------
Advisor Class 483,383
============================================================
Class A:
Net asset value and redemption price per
share $ 8.53
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $8.53 / 95.25%) $ 8.96
============================================================
Class B:
Net asset value and offering price per share $ 8.53
============================================================
Class C:
Net asset value and offering price per share $ 8.53
============================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 8.50
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 12,070,217
- ------------------------------------------------------------
Security lending 157,605
- ------------------------------------------------------------
Total investment income 12,227,822
- ------------------------------------------------------------
EXPENSES:
Advisory fees 929,188
- ------------------------------------------------------------
Administrative services fees 26,544
- ------------------------------------------------------------
Custodian fees 49,571
- ------------------------------------------------------------
Distribution fees -- Class A 120,107
- ------------------------------------------------------------
Distribution fees -- Class B 584,554
- ------------------------------------------------------------
Distribution fees -- Class C 67
- ------------------------------------------------------------
Interest expense 163,498
- ------------------------------------------------------------
Transfer agent fees -- Class A 77,623
- ------------------------------------------------------------
Transfer agent fees -- Class B 132,225
- ------------------------------------------------------------
Transfer agent fees -- Class C 15
- ------------------------------------------------------------
Transfer agent fees -- Advisor Class 3,157
- ------------------------------------------------------------
Other 130,557
- ------------------------------------------------------------
Total expenses 2,217,106
- ------------------------------------------------------------
Less: Expenses paid indirectly (38,258)
- ------------------------------------------------------------
Net expenses 2,178,848
- ------------------------------------------------------------
Net investment income 10,048,974
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FORWARD CONTRACTS:
Net realized gain (loss) from:
Investment securities (14,734,825)
- ------------------------------------------------------------
Foreign currencies (9,959)
- ------------------------------------------------------------
Forward contracts 633,796
- ------------------------------------------------------------
(14,110,988)
- ------------------------------------------------------------
Net unrealized appreciation (depreciation) of:
Investment securities 30,360,011
- ------------------------------------------------------------
Foreign currencies (825,240)
- ------------------------------------------------------------
Forward contracts 181,457
- ------------------------------------------------------------
29,716,228
- ------------------------------------------------------------
Net gain from investment securities, foreign
currencies and forward contracts 15,605,240
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $ 25,654,214
============================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 1999 and the year ended October 31, 1998
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1999 1998
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 10,048,974 $ 33,382,360
- -------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and forward contracts (14,110,988) (69,501,940)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities, foreign currencies and forward contracts 29,716,228 (49,143,194)
- -------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 25,654,214 (85,262,774)
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (4,069,893) (9,422,518)
- -------------------------------------------------------------------------------------------
Class B (6,564,075) (14,937,576)
- -------------------------------------------------------------------------------------------
Class C (910) --
- -------------------------------------------------------------------------------------------
Advisor Class (168,823) (246,624)
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (24,756,370)
- -------------------------------------------------------------------------------------------
Class B -- (41,863,802)
- -------------------------------------------------------------------------------------------
Advisor Class -- (638,983)
- -------------------------------------------------------------------------------------------
Return of capital
Class A -- (3,147,917)
- -------------------------------------------------------------------------------------------
Class B -- (4,936,309)
- -------------------------------------------------------------------------------------------
Advisor Class -- (82,579)
- -------------------------------------------------------------------------------------------
Share transactions-net:
Class A (10,018,595) 3,431,336
- -------------------------------------------------------------------------------------------
Class B (2,965,231) (3,086,499)
- -------------------------------------------------------------------------------------------
Class C 56,912 --
- -------------------------------------------------------------------------------------------
Advisor Class 2,241,957 (518,649)
- -------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 4,165,556 (185,469,264)
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 180,323,147 365,792,411
- -------------------------------------------------------------------------------------------
End of period $184,488,703 $ 180,323,147
===========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $275,086,456 $ 285,771,413
- -------------------------------------------------------------------------------------------
Undistributed net investment income (796,291) (41,564)
- -------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and forward contracts (73,817,938) (59,706,950)
- -------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and forward contracts (15,983,524) (45,699,752)
- -------------------------------------------------------------------------------------------
$184,488,703 $ 180,323,147
===========================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
April 30, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Emerging Markets Debt Fund (the "Fund") is a separate series of AIM
Investment Funds (the "Trust"). The Trust is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end series management investment company consisting of
twelve separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers four different classes of shares:
Class A shares, Class B shares, Class C shares and Advisor Class shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares are sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class.
The Fund's investment objective is high current income, and its secondary
investment objective is growth of capital. The Fund invests substantially all of
its investable assets in Emerging Markets Debt Portfolio (the "Portfolio"). The
Portfolio is organized as a Delaware business trust which is registered under
the 1940 Act as an open-end management investment company.
The Portfolio has investment objectives, policies, and limitations
substantially identical to those of the Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
April 30, 1999, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or INVESCO (NY) Asset Management, Inc., which has a
nominal ($100) investment in the Portfolio.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund and the Portfolio in the
preparation of the financial statements.
A. Security Valuations-Each equity security is valued at its last sales price on
the exchange where the security is principally traded or, lacking any sales
on a particular day, the security is valued at the last available bid. Each
security traded in the over-the-counter market (but not including securities
reported on the NASDAQ National Market System) is valued at the mean between
the last bid and asked prices based upon quotes furnished by market makers
for such securities. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a
last sales price, at the closing bid price on that day. Debt securities are
valued on the basis of prices provided by an independent pricing service.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as
institution-size trading in similar groups of securities, developments
related to special securities, yield, quality, coupon rate, maturity, type of
issue, individual trading characteristics and other market data. Securities
for which market quotations are not readily available or are questionable are
valued at fair value as determined in good faith by or under the supervision
of the Trust's officers in a manner specifically authorized by the Board of
Trustees. Short-term obligations having 60 days or less to maturity are
valued on the basis of amortized cost. For purposes of determining net asset
value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day
at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times
at which such values are determined and the close of the NYSE, which will not
be reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities occur during such period,
then these securities will be valued at their fair value as determined in
good faith by or under the supervision of the Board of Trustees of the Trust.
B. Securities Transactions, Investment Income and Distributions-Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Such distributions are
declared and paid monthly.
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
$53,419,915 as of October 31, 1998 (which may be carried forward to offset
future taxable gains, if any) which expires, if not previously utilized, in
the year 2006.
10
<PAGE> 13
D. Expenses-Distribution and transfer agency expenses directly attributable to a
class of shares are charged to that class' operations. All other expenses are
allocated among the classes.
E. Foreign Currency Translations-Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for that portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
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 Portfolio may enter into a forward foreign currency
contract to attempt to minimize the risk to the Portfolio from adverse
changes in the relationship between currencies. The Portfolio may also enter
into a forward foreign currency contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in" the U.S.
dollar price of that security. The Portfolio could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
Outstanding forward foreign currency contracts at April 30, 1999 were as
follows:
<TABLE>
<CAPTION>
CONTRACT TO
SETTLEMENT ---------------------- UNREALIZED
DATE DELIVER RECEIVE VALUE APPRECIATION
- ---------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
06/18/99 EUR 5,620,000 $6,180,426 $5,957,405 $223,021
</TABLE>
G. Futures Contracts-A futures contract is an agreement between two parties to
buy and sell a security at a set price on a future date. Upon entering into
such a contract the Portfolio is required to pledge to the broker an amount
of cash or securities equal to the minimum "initial margin" requirements of
the exchange on which the contract is traded. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or payments
are known as "variation margin" and are recorded by the Portfolio as
unrealized gains or losses. When the contract is closed, the Portfolio
records a realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Portfolio is that the change in value of
the underlying securities may not correlate to the change in value of the
contracts. The Portfolio may use futures contracts to manage its exposure to
the stock market and to fluctuations in currency values or interest rates.
H. Foreign Securities-There are certain additional considerations and risks
associated with investing in foreign securities and currency transactions
that are not inherent in investments of domestic origin. The Portfolio's
investment in emerging market countries may involve greater risks than
investments in more developed markets and the price of such investments may
be volatile. These risks of investing in foreign and emerging markets may
include foreign currency exchange rate fluctuations, perceived credit risk,
adverse political and economic developments and possible adverse foreign
government intervention.
I. Indexed Securities-The Portfolio may invest in indexed securities whose value
is linked either directly or indirectly to changes in foreign currencies,
interest rates, equities, indices, or other reference instruments. Indexed
securities may be more volatile than the reference instrument itself, but any
loss is limited to the amount of the original investment.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's and the Portfolio's investment
manager and administrator. INVESCO Asset Management Limited is the Fund's and
Portfolio's sub-advisor. The Fund pays AIM administration fees at an annualized
rate of 0.25% of the Fund's average daily net assets. The Portfolio pays AIM
investment management and administration fees at an annual rate of 0.475% on the
first $500 million of the Portfolio's average daily net assets, plus 0.45% on
the next $1 billion of the Portfolio's average daily net assets, plus 0.425% on
the next $1 billion of the Portfolio's average daily net assets, plus 0.40% on
amounts thereafter of the Portfolio's average daily net assets, plus 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
mark to market basis, of the Portfolio's assets; provided, however, that during
any fiscal year this amount shall not exceed 2% of the Portfolio's total
investment income calculated in accordance with generally accepted accounting
principles. 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 1.75%, 2.40%, 2.40%, and 1.40% of the average daily net
assets of the Fund's Class A, Class B, Class C, and Advisor Class shares,
respectively.
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 $208,695 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 0.35% 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
11
<PAGE> 14
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 $120,107, $584,554 and $67, respectively,
as compensation under the Plans.
AIM Distributors received commissions of $18,194 from sales of the Class A
shares of the Fund during the six months ended April 30, 1999. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. Certain officers and trustees of the
Trust are officers and directors of AIM, AIM Distributors and AFS.
AIM is the pricing and accounting agent for the Portfolio and the Fund. The
monthly fee for these services paid to AIM is a percentage, not to exceed 0.03%
annually, of a Fund's average daily net assets. The annual fee rate is derived
based on the aggregate net assets of the funds which comprise the following
investment companies: AIM Growth Series, AIM Investment Funds, AIM Series Trust,
G.T. Global Variable Investment Series and G.T. Global Variable Investment
Trust. The fee is calculated at the rate of 0.03% of the first $5 billion of
assets and 0.02% of 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 $38,258 under expense offset arrangements. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of
$38,258 during the six months ended April 30, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund, along with certain other funds advised and/or administered by AIM, has
a line of credit with BankBoston and State Street Bank & Trust Company. The
arrangements with the banks allow the Fund and certain other funds to borrow, on
a first come, first served basis, an aggregate maximum amount of $250,000,000.
The Fund is limited to borrowing up to 33 1/3% of the Fund's total assets.
For the six months ended April 30, 1999, the average outstanding daily
balance of bank loans for the Fund was $5,895,028 with a weighted average
interest rate of 5.51%. Interest expense for the Fund for the six months ended
April 30, 1999 was $163,498.
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 $1,930,894 were on loan
to brokers. The loans were secured by cash collateral of $1,988,999 received by
the Portfolio. For the six months ended April 30, 1999, the Portfolio received
fees of $157,605 for securities lending.
For international securities, cash collateral is received by the Fund against
loaned securities in an amount at least equal to 105% of the market value of the
loaned securities at the inception of each loan. This collateral must be
maintained at not less than 103% of the market value of the loaned securities
during the period of the loan. For domestic securities, cash collateral is
received by the Fund against loaned securities in the amount at least equal to
102% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 100% of the market value of
the loaned securities during the period of the loan. The cash collateral is
invested in a securities lending trust which consists of a portfolio of high
quality short duration securities whose average effective duration is restricted
to 120 days or less.
12
<PAGE> 15
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the six months ended April 30, 1999
was $385,819,475 and $391,138,740, 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 $ 9,967,720
- --------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (29,106,779)
- --------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities $(19,139,059)
==========================================================================
</TABLE>
Cost of investments for tax purposes is $209,815,896.
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 2,258,820 $ 18,598,094 10,918,639 $ 129,801,507
- --------------------------------------------------------------------------------------
Class B 3,546,181 28,997,539 5,958,185 73,991,330
- --------------------------------------------------------------------------------------
Class C* 6,785 56,002 -- --
- --------------------------------------------------------------------------------------
Advisor 359,335 2,887,970 490,309 6,221,370
- --------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Class A 323,555 2,639,619 2,191,470 26,459,355
- --------------------------------------------------------------------------------------
Class B 506,285 4,128,366 3,020,192 36,460,585
- --------------------------------------------------------------------------------------
Class C* 109 910 -- --
- --------------------------------------------------------------------------------------
Advisor 20,340 165,790 76,464 920,280
- --------------------------------------------------------------------------------------
Reacquired:
Class A (3,812,871) (31,256,308) (12,901,851) (152,829,526)
- --------------------------------------------------------------------------------------
Class B (4,416,212) (36,091,136) (9,736,068) (113,538,414)
- --------------------------------------------------------------------------------------
Advisor (100,190) (811,803) (602,542) (7,660,299)
- --------------------------------------------------------------------------------------
(1,307,863) $(10,684,957) (585,202) $ (173,812)
======================================================================================
</TABLE>
* Class C shares commenced sales March 1, 1999.
NOTE 9-FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------
1999(a) 1998(a) 1997(a) 1996(a) 1995 1994(a)
--------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.86 $15.56 $ 14.85 $ 11.70 $ 12.56 $ 14.92
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Income from investment operations:
Net investment income 0.45 1.35(b) 1.19 1.27 1.35 0.94
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Net realized and unrealized gain (loss) on investments 0.70 (4.80) 0.93 3.09 (1.09) (1.87)
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Net increase (decrease) from investment operations 1.15 (3.45) 2.12 4.36 0.26 (0.93)
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Distributions to shareholders:
From net investment income (0.48) (1.06) (1.18) (1.11) (1.03) (0.94)
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
From net realized gain on investments -- (2.83) (0.23) (0.10) (0.03) (0.27)
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
In excess of net realized gain on investments -- -- -- -- -- (0.22)
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Return of capital -- (0.36) -- -- (0.06) --
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Total distributions (0.48) (4.25) (1.41) (1.21) (1.12) (1.43)
- ---------------------------------------------------------- ------- ------ ------- ------- -------- --------
Net asset value, end of period $ 8.53 $ 7.86 $ 15.56 $ 14.85 $ 11.70 12.56
========================================================== ======= ====== ======= ======= ======== ========
Total return(c) 15.07% (30.07)% 14.46% 39.05% 2.81% (6.45)%
========================================================== ======= ====== ======= ======= ======== ========
Ratios and supplemental data:
Net assets, end of period (in 000's) $64,723 $69,321 $133,973 $178,318 $142,002 $167,974
========================================================== ======= ====== ======= ======= ======== ========
Ratio of net investment income to average net assets: 11.06%(d) 11.27% 7.39% 9.52% 11.85% 7.00%
========================================================== ======= ====== ======= ======= ======== ========
Ratio of expenses to average net assets excluding
interest expense: 1.78%(d) 1.74% 1.58% 1.69% 1.75% 1.57%
========================================================== ======= ====== ======= ======= ======== ========
Ratio of interest expense to average net asset 0.09% N/A N/A 0.04% N/A 0.22%
========================================================== ======= ====== ======= ======= ======== ========
Portfolio turnover rate 206% 339% 214% 290% 213% 178%
========================================================== ======= ====== ======= ======= ======== ========
</TABLE>
(a) These selected per share data were calculated based upon average shares
outstanding during the period.
(b) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.21 per share.
(c) Total return does not include sales charges and is not annualized for
periods less than one year.
(d) Ratios are annualized and based on average net assets of $69,201,415.
N/A Not Applicable.
13
<PAGE> 16
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
APRIL 30, --------------------------------------------------------
1999(a) 1998(a) 1997(a) 1996(a) 1995 1994(a)
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.86 $ 15.54 $ 14.83 $ 11.69 $ 12.56 $ 14.90
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.43 1.28(b) 1.09 1.17 1.27 0.86
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Net realized and unrealized gain (loss) on investments 0.69 (4.79) 0.93 3.09 (1.09) (1.85)
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations 1.12 (3.51) 2.02 4.26 0.18 (0.99)
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Distributions to shareholders:
From net investment income (0.45) (0.98) (1.08) (1.03) (0.96) (0.86)
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
From net realized gain on investments -- (2.83) (0.23) (0.09) (0.03) (0.27)
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
In excess of net realized gain on investments -- -- -- -- -- (0.22)
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Return of capital -- (0.36) -- -- (0.06) --
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Total distributions (0.45) (4.17) (1.31) (1.12) (1.05) (1.35)
- -------------------------------------------------------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 8.53 $ 7.86 $ 15.54 $ 14.83 $ 11.69 $ 12.56
======================================================== ======== ======== ======== ======== ======== ========
Total return(c) 14.71% (30.49)% 13.77% 38.16% 2.07% (6.99)%
======================================================== ======== ======== ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in 000's) $115,600 $109,406 $228,101 $251,002 $214,897 $232,423
======================================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 10.42%(d) 10.62% 6.74% 8.87% 11.20% 6.35%
======================================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets excluding
interest expense: 2.43%(d) 2.39% 2.23% 2.34% 2.40% 2.22%
======================================================== ======== ======== ======== ======== ======== ========
Ratio of interest expense to average net assets 0.09% N/A N/A 0.04% N/A 0.22%
======================================================== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 206% 339% 214% 290% 213% 178%
======================================================== ======== ======== ======== ======== ======== ========
</TABLE>
(a) These selected per share operating data were calculated based upon the
average shares outstanding during the period.
(b) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.21 per share.
(c) Total return does not include sales charges and is not annualized for
periods less than one year.
(d) Ratios are annualized and based on average net assets of $117,879,611.
N/A Not Applicable.
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS
CLASS C --------------------------------------------------------------
----------------- YEAR ENDED OCTOBER 31, JUNE 1, 1995
MARCH 1, 1999 ------------------------------- TO
TO APRIL 30 OCTOBER 31,
APRIL 30, 1999(a) 1999 1998(a) 1997(a) 1996(a) 1995
----------------- --------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.96 $ 7.83 $15.52 $14.83 $11.71 $11.44
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income 0.11 0.48 1.40(b) 1.22 1.34 0.57
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Net realized and unrealized gain (loss) on
investments 0.60 0.68 (4.79) 0.93 3.05 0.17
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Net increase (decrease) from investment
operations 0.71 1.16 (3.39) 2.15 4.39 0.74
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (0.14) (0.49) (1.11) (1.23) (1.16) (0.44)
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
From net realized gain on investments -- -- (2.83) (0.23) (0.11) --
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Return of capital -- -- (0.36) -- -- (0.03)
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Total distributions (0.14) (0.49) (4.30) (1.46) (1.27) (0.47)
- ------------------------------------------------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $ 8.53 $ 8.50 $ 7.83 $15.52 $14.83 $11.71
================================================ ====== ====== ====== ====== ====== ======
Total return(c) 8.98% 15.32% (29.79)% 14.72% 39.38% 6.54%
================================================ ====== ====== ====== ====== ====== ======
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 59 $4,107 $1,596 $3,719 $15,298 $1,463
================================================ ====== ====== ====== ====== ====== ======
Ratio of net investment income to average net
assets 10.50%(d) 11.41%(d) 11.62% 7.74% 9.87% 12.20%(e)
================================================ ====== ====== ====== ====== ====== ======
Ratio of expenses to average net assets
excluding interest expense: 2.43%(d) 1.44%(d) 1.39% 1.23% 1.34% 1.40%(e)
================================================ ====== ====== ====== ====== ====== ======
Ratio of interest expenses to average net
assets 0.09% 0.09% N/A N/A 0.04% N/A
================================================ ====== ====== ====== ====== ====== ======
Portfolio turnover rate 206% 206% 339% 214% 290% 213%(e)
================================================ ====== ====== ====== ====== ====== ======
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.21 per share.
(c) Total return does not include sales charge and is not annualized for
periods less than one year.
(d) Ratios are annualized and based on average net assets of $39,846 and
$2,814,079 for Class C and Advisor Class, respectively.
(e) Annualized.
N/A Not Applicable.
15
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Emerging Markets Debt 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 Emerging Markets Debt Fund -- Consolidated 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
16
<PAGE> 19
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham 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 LLP
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>
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has 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 Trademark--
AIM Select Growth Fund(3) AIM Europe Growth Fund(2) is distributed nationwide, and AIM today is the
AIM Small Cap Growth Fund(2), (B) AIM European Development Fund 10th-largest mutual-fund complex in the U.S.
AIM Small Cap Opportunities Fund AIM International Equity Fund in assets under management, according to Strategic
AIM Value Fund AIM Japan Growth Fund(2) Insight, an independent mutual-fund monitor.
AIM Weingarten Fund AIM Latin American Growth Fund(2)
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.
[AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE--Registered Trademark--
