<PAGE> 1
ADVISOR CLASS SHARES OF
AIM DEVELOPING MARKETS FUND
AIM LATIN AMERICAN GROWTH FUND
(SERIES PORTFOLIOS OF AIM INVESTMENT FUNDS)
Supplement dated October 4, 1999
To the Statement of Additional Information dated March 1, 1999
The following paragraph replaces in its entirety the information
appearing under the heading INVESTMENT STRATEGIES AND RISKS-INVESTMENT IN
OTHER INVESTMENT COMPANIES" on page 8 of the Statement of Additional
Information:
"With respect to certain countries, investments by the Funds
presently may be made only by acquiring shares of other investment
companies (including investment vehicles or companies advised by AIM or
its affiliates) with local governmental approval to invest in those
countries. To the extent that a Fund invests in such companies, the prices
paid by the Fund and the proceeds to the Fund upon sale of the shares may
reflect premiums above or discounts to the net asset value of the assets
owned by such investment companies. At such time as direct investment in
these countries is allowed, and the Funds anticipate investing directly in
these markets. The Funds may invest in other investment companies to the
extent permitted by the 1940 Act, rules and regulations thereunder, and
any applicable exemptive orders granted by the SEC. Under an exemptive
order granted by the SEC, each Fund is permitted to, and intends to,
invest its cash (and cash collateral received in connection with the
lending of portfolio securities) in shares of money market investment
companies advised by AIM or its affiliates ("Affiliated Money Market
Funds"), provided that those investments do not exceed 25% of the total
assets of such Fund. In general, a purchase of investment company
securities may result in the duplication of fees and expenses. With
respect to a Fund's purchase of shares of Affiliated Money Market Funds,
the Fund will indirectly pay the advisory fees and other operating
expenses of the Affiliated Money Market Funds."
The following paragraph replaces the first paragraph appearing under
the heading "INVESTMENT STRATEGIES AND RISKS-TEMPORARY DEFENSIVE STRATEGIES"
on page 12 of the Statement of Additional Information.
"In anticipation of or in response to adverse market conditions, for
cash management purposes, or for defensive purposes, each of the Funds may
temporarily hold all or a portion of its assets in cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros), money
market instruments, or high-quality debt securities. Each of the Funds may
also invest up to 25% of its total assets in Affiliated Money Market Funds
for these purposes. In addition, for temporary defensive purposes, most or
all of each Fund's investments may be made in the United States and
denominated in U.S. dollars. To the extent a Fund employs a temporary
defensive strategy, it will not be invested so as to achieve directly its
investment objectives."
The following replaces in its entirety item "(1)" appearing under
the heading "INVESTMENT LIMITATIONS-LATIN AMERICAN FUND" under the
non-fundamental policies discussion on page 36 of the Statement of Additional
Information:
"(1) Invest in securities of an issuer if the investment would cause
Latin American Fund to own more than 10% of any class of securities of any
one issuer, except that the Fund may purchase securities of Affiliated
Money Market Funds to the extent permitted by exemptive order."
The following replaces in its entirety the paragraph appearing after
item "(7)" under the heading "INVESTMENT LIMITATIONS-LATIN AMERICAN Fund" on
page 37 of the Statement of Additional Information:
"Latin American Fund has the authority to invest up to 10% of its
total assets in shares of other investment companies pursuant to the 1940
Act. The Fund may not invest more than 5% of its total assets in any one
investment company or acquire more than 3% of the outstanding voting
securities of any one investment company, except that the Fund may
purchase securities of Affiliated Money Market Funds to the extent
permitted by exemptive order."
<PAGE> 2
The following new section is added after the eleventh paragraph appearing
under the heading "EXECUTION OF PORTFOLIO TRANSACTIONS" on page 37 of the
Statement of Additional Information:
"ALLOCATION OF INITIAL PUBLIC OFFERING ("IPO") SECURITIES TRANSACTIONS
From time to time, certain of the mutual funds managed by AIM or A I
M Capital Management, Inc. (collectively, the "AIM Funds") may become
interested in participating in security distributions that are available
in an IPO, and occasions may arise when purchases of such securities by
one AIM Fund may also be considered for purchase by one or more other AIM
Funds. In such cases, it shall be AIM's practice to specifically combine
or otherwise bunch indications of interest for IPO securities for all AIM
Funds participating in purchase transactions for that security, and to
allocate such transactions in accordance with the following procedures:
AIM will determine the eligibility of each AIM Fund that seeks to
participate in a particular IPO by reviewing a number of factors,
including suitability of the investment with the AIM Fund's investment
objective, policies and strategies, the liquidity of the AIM Fund if such
investment is purchased, and whether the portfolio manager intends to hold
the security as a long-term investment. The allocation of limited supply
securities issued in IPOs will be made to eligible AIM Funds in a manner
designed to be fair and equitable for the eligible AIM Funds, and so that
there is equal allocation of IPOs over the longer term. Where multiple
funds are eligible, rotational participation may occur, based on the
extent to which an AIM Fund has participated in previous IPOs as well as
the size of the AIM Fund. Each eligible AIM Fund with an asset level of
less than $500 million, will be placed in one of three tiers, depending
upon its asset level. The AIM Funds in the tier containing funds with the
smallest asset levels will participate first, each receiving a 40 basis
point allocation (rounded to the nearest share round lot that approximates
40 basis points) (the "Allocation"), based on that AIM Fund's net assets.
This process continues until all of the AIM Funds in the three tiers
receive their Allocations, or until the shares are all allocated. Should
securities remain after this process, eligible AIM Funds will receive
their Allocations on a straight pro rata basis. For the tier of AIM Funds
not receiving a full Allocation, the Allocation may be made only to
certain AIM Funds so that each may receive close to or exactly 40 basis
points.
Any AIM Funds with substantially identical investment objectives and
policies will participate in syndicates in amounts that are substantially
proportionate to each other. In these cases, the net assets of the largest
AIM Fund will be used to determine in which tier, as described in the
paragraph above, such group of AIM Funds will be placed. The price per
share of securities purchased in such syndicate transactions will be the
same for each AIM Fund."
The following new paragraph is added after the fifth paragraph
appearing under the heading INVESTMENT RESULTS-PERFORMANCE INFORMATION" on
page 55 of the Statement of Additional Information:
"Some or all of the Funds may participate in the IPO market, and a
significant portion of those Funds' returns may be attributable to their
investment in IPOs, which have a magnified impact due to the Funds' small
asset bases. There is no guarantee that as the Funds' assets grow, they
will continue to invest to the same degree in IPOs or that they will
experience substantially similar performance."
The following replaces in its entirety the table appearing under
the heading "MANAGEMENT-TRUSTEES AND EXECUTIVE OFFICERS" on page 39 of the
Statement of Additional Information:
2
<PAGE> 3
<TABLE>
<CAPTION>
- ---------------------------- --------------------------- -----------------------------------------------------------
POSITIONS HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
"NAME, ADDRESS AND AGE REGISTRANT
- ---------------------------- --------------------------- -----------------------------------------------------------
<S> <C> <C>
*ROBERT H. GRAHAM (52) Trustee, Chairman of the Director, President and Chief Executive Officer, A I M
Board and President Management Group Inc.; Director and President, A I M
Advisors, Inc.; Director and Senior Vice President, A I M
Capital Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc. and Fund Management Company; and
Director, AMVESCAP PLC.
- ---------------------------- --------------------------- -----------------------------------------------------------
C. DEREK ANDERSON (58) Trustee President, Plantagenet Capital Management, LLC (an
220 Sansome Street investment partnership); Chief Executive Officer,
Suite 400 Plantagenet Holdings, Ltd. (an investment banking firm);
San Francisco, CA 94104 Director, Anderson Capital Management, Inc. since 1988;
Director, Premium Wear, Inc. (formerly Munsingwear, Inc.)
(a casual apparel company); and Director, 'R' Homes, Inc.
and various other privately owned companies.
- ---------------------------- --------------------------- -----------------------------------------------------------
FRANK S. BAYLEY (60) Trustee Partner, law firm of Baker & McKenzie; Trustee, The
Two Embarcadero Center Bradley Funds; and Director and Chairman, C. D. Stimson
Suite 2400 Company (a private investment company) and Stimson
San Francisco, CA 94111 Marina, Inc. (a subsidiary of C.D. Stimson Co.).
- ---------------------------- --------------------------- -----------------------------------------------------------
RUTH H. QUIGLEY (64) Trustee Private investor; and President, Quigley Friedlander &
1055 California Street Co., Inc. (a financial advisory services firm) from 1984
San Francisco, CA 94108 to 1986.
- ---------------------------- --------------------------- -----------------------------------------------------------
MELVILLE B. COX (55) Vice President Vice President and Chief Compliance Officer, A I M
Advisors, Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and Fund
Management Company.
- ---------------------------- --------------------------- -----------------------------------------------------------
GARY T. CRUM (52) Vice President Director and President, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M Management
Group Inc. and A I M Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC.
- ---------------------------- --------------------------- -----------------------------------------------------------
</TABLE>
- --------
* A trustee who is an "interested person" of the Trust and AIM
as defined in the 1940 Act.
3
<PAGE> 4
<TABLE>
<CAPTION>
- ---------------------------- --------------------------- -----------------------------------------------------------
POSITIONS HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
"NAME, ADDRESS AND AGE REGISTRANT
- ---------------------------- --------------------------- -----------------------------------------------------------
<S> <C> <C>
CAROL F. RELIHAN (44) Vice President Director, Senior Vice President, General Counsel and
Secretary, A I M Advisors, Inc.; Senior Vice President,
General Counsel and Secretary, A I M Management Group
Inc.; Director, Vice President and General Counsel, Fund
Management Company; Vice President and General Counsel,
A I M Fund Services, Inc.; and Vice President, A I M
Capital Management, Inc. and A I M Distributors, Inc.
- ---------------------------- --------------------------- -----------------------------------------------------------
SAMUEL D. SIRKO (40) Vice President and Assistant General Counsel and Assistant Secretary of
Secretary A I M Management Group, Inc., A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund Services, Inc.,
and Fund Management Company; and Vice President, Assistant
General Counsel and Assistant Secretary of A I M Advisors,
Inc.
- ---------------------------- --------------------------- -----------------------------------------------------------
DANA R. SUTTON (40) Vice President and Vice President and Fund Controller, A I M Advisors, Inc.;
Treasurer and Assistant Vice President and Assistant Treasurer,
Fund Management Company."
- ---------------------------- --------------------------- -----------------------------------------------------------
</TABLE>
4
