<PAGE> 1
ANNUAL REPORT / OCTOBER 31 1999
AIM EMERGING MARKETS DEBT FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
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REFLECTION OF THE SUN IN THE SEA BY NICOLAS TARKHOFF
A FREQUENT SYMBOL IN NICOLAS TARKHOFF'S PAINTINGS WAS THE
SUN, WHICH HE SAW AS A SYMBOL OF REBIRTH AND OPPORTUNITY.
WHILE GLOBAL 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 CHANGING WORLD OF
EMERGING MARKETS.
------------------------------------
AIM Emerging Markets Debt Fund is for shareholders who primarily seek a high
level of current income and secondarily seek capital appreciation. 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's performance figures are historical, and
they reflect changes in net asset value and the reinvestment of
distributions.
o Had the advisor not absorbed fund expenses in the past, performance figures
would have been lower.
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 zero at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of Class A shares due to differences in sales-charge structure and
expenses.
o AIM Emerging Markets Debt Fund's average annual total returns (including
sales charges) as of 9/30/99 (the most recent calendar quarter end), are as
follows: for Class A shares, one year, 14.04%; five years, 4.12%; inception
(10/22/92), 7.61%. For Class B shares, one year, 14.01%; five years, 4.23%;
inception (10/22/92), 7.68%. For Class C shares, date sales commenced
(3/1/99), 6.30%. For Advisor Class shares, one year, 20.43%; inception
(6/1/95), 7.19%.
o Because Class C shares have been offered for less than a year (since
3/1/99), the return provided is the cumulative total return that has not
been annualized.
o Sales charges do not apply to Advisor Class shares. Beginning 3/1/99,
Advisor Class shares were closed to new investors.
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 the bonds in the portfolio, net of all expenses and
expressed on an annualized basis.
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 During the fiscal year ended 10/31/99, the fund's Class A shares paid
distributions of $0.9300; Class B shares, $0.8770; Class C shares, $0.5640;
and Advisor Class shares, $0.9580.
o International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in
the value of the U.S. dollar relative to the values of other currencies, the
custody arrangements made for the fund's foreign holdings, differences in
accounting, political risks and the lesser degree of public information
required to be provided by non-U.S. companies.
o 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.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The J.P. Morgan Emerging Markets Bond Index (often referred to as the Brady
index) tracks total returns for traded external-debt Brady bonds (foreign
bonds collateralized by U.S. Treasury bonds) in 10 emerging bond markets. It
is measured in U.S. dollars, and it reflects the results of reinvested
coupons.
o The J.P. Morgan Emerging Markets Bond Index Plus (EMBI+) is a
market-value-weighted average of government bonds from 13 emerging bond
markets. It includes the effect of reinvested coupons and is measured in
U.S. dollars.
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
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
The fiscal year discussed in this report reconfirmed our
[PHOTO OF faith in two long-established principles of investing:
Charles T. portfolio diversification and long-term thinking. We could
Bauer, title this report "What a Difference a Year Makes."
Chairman of An investor surveying conditions when the fiscal year
the Board of opened on October 31, 1998, saw a market dominated by
THE FUND large-capitalization stocks and high-quality bonds,
APPEARS HERE] especially U.S. Treasuries. Ten months into 1998, two
well-known indexes of large-capitalization U.S. company
stocks, the S&P 500 and the Dow Jones Industrial Average,
were up by double digits, but the smaller-company stocks in
the Russell 2000 had lost 12.80%. Overseas, many markets
were languishing, especially in Asia, where many financial
difficulties originated in 1997.
In bond markets also, name-brand quality was the place
to be. The Lehman Corporate/Government Bond Index, which
follows intermediate and long-term government and investment-grade debt, was up
8.56%, while the Lehman High Yield Index, which tracks riskier "junk bonds," had
dropped 2.30%.
It would be easy for an investor to conclude that blue chips, whether equity
or fixed-income, were the only place to be. That investor, of course, would be
wrong.
MARKETS TURN
While large-capitalization stocks continue to do very well, during 1999 markets
broadened considerably, with many investment sectors performing a complete
turnaround. Year to date by October 31, 1999, the small-cap stocks in the
Russell 2000 were back in positive territory, and the many Asian markets had
staged a comeback. The same holds true for bonds. The higher-quality Lehman
index is down 1.49% year to date through October 31, 1999, while high-yield
bonds have moved into positive returns.
The point, at the risk of sounding repetitive to those of you who have
invested with us for a long time, is that this is why diversification is a
fundamental investing principle. Market sectors and asset classes go in and out
of favor, but over the long run-and the long run is several years-the markets'
overall trend has been upward. Selecting an asset class or a market sector on
the basis of a short-term snapshot of conditions is usually unwise, as is
concentrating your portfolio in one asset class. Staying fully invested in a
diversified portfolio remains a compelling strategy and one of your best
prospects for long-term gain.
LOOKING AHEAD
As we look about at the close of this fiscal year, we are encouraged by signs of
economic health in Europe and Asia, not to mention the prolonged U.S. economic
expansion. However, we are aware of how easily an investor could have been
misled by conditions just 12 months ago. For our shareholders, we therefore
reiterate our commitment to investing through a financial advisor. In addition
to helping you select investments appropriate to your time horizon and risk
tolerance, a financial advisor can keep you informed about how changing market
conditions affect you and your portfolio and can help assure that when you do
alter your investments, there's a logical reason for doing so. AIM believes
every investor should be guided by a financial professional.
FUND MANAGERS COMMENT
In the pages that follow, your fund's portfolio managers discuss how they
managed your fund during the year ended October 31, 1999, how the markets
behaved and what they foresee for the near future. We trust you will find their
discussion informative. If you have any questions or comments, we invite you to
contact us, either at our Web site, aimfunds.com, or through our Client Services
department at 800-959-4246. Information about your account is also available
through our automated AIM Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of
Funds--Registered trademark--
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
------------------------------------
STAYING FULLY
INVESTED IN A DIVERSIFIED
PORTFOLIO REMAINS
A COMPELLING STRATEGY
AND ONE OF YOUR
BEST PROSPECTS FOR
LONG-TERM GAIN.
------------------------------------
AIM EMERGING MARKETS DEBT FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND FINISHES VOLATILE YEAR
WITH UPBEAT OUTLOOK
THE REPORTING PERIOD WAS ONE OF THE WORST IN HISTORY FOR BOND MARKETS. HOW DID
THE FUND PERFORM?
During the past 12 months, the bond markets seemed to have been afflicted by the
old Chinese curse, "May you live to see interesting times"-it was certainly an
interesting year. Emerging-markets debt securities, however, fared well overall.
The widely followed J.P. Morgan Emerging Markets Bond Index Plus (EMBI+) showed
a return of 19.98% for the year ended October 31, 1999, while the J.P. Morgan
EMBI (Brady) returned 16.66%. Our fund also ended this volatile year on a very
positive note, as shown in the table below.
YOUR FUND'S PERFORMANCE
As of 10/31/99, excluding sales charges
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
CLASS A SHARES
1 Year 18.38%
CLASS B SHARES
1 Year 17.61%
ADVISOR CLASS SHARES
1 Year 18.87%
CLASS C SHARES*
Inception (3/1/99) 11.74%
*Cumulative total return that has not been
annualized
================================================================================
As of October 31, 1999, the fund's 30-day distribution rates at net asset
value were 10.84% for Class A shares, 10.19% for Class B shares, 11.23% for
Advisor Class shares and 10.19% for Class C shares. The 30-day SEC yields at
maximum offering price were 8.43% for Class A shares, 8.21% for Class B shares,
9.24% for Advisor Class shares and 8.21% for Class C shares.
WHAT WERE THE BIGGEST CHALLENGES FACING EMERGING-MARKETS DEBT SECURITIES IN THE
REPORTING PERIOD?
The last 12 months were quite volatile, with markets seesawing between valleys
and peaks. In fall 1998, the fund's performance took a hit--as did virtually the
entire non-investment-grade bond market--after Russia effectively declared
bankruptcy in August. Then the underweighted Russian position we held after the
crisis hurt fund performance early in 1999, when Russian assets doubled on
expectations that euro-bonds would continue to be serviced. The January
devaluation of the Brazilian real also affected the fund somewhat, although we
were underweight in Brazil at the time and escaped the worst of the
devaluation's effects on the market.
After a strong rally from early March to the end of April, all the emerging
markets softened in sympathy with Brazil as it suffered through an investigation
of its central-bank president. In July and August, the market remained flat
amid concerns regarding the political situation in Brazil, Argentina's debt
profile and the looming default of Ecuador on its Brady bonds. These
country-specific issues were compounded by worries over the direction of U.S.
interest rate policy, new-issue supply in the corporate and high-yield markets,
and potential year 2000 "bug" (Y2K) issues.
WHAT POSITIVES COUNTERBALANCED THESE CHALLENGES?
Emerging-markets bonds have been--and still are--some of the cheapest assets
in the fixed-income marketplace. Uncertainty about Y2K, the Dow Jones Industrial
Average's ups and downs, and concerns about interest rate increases have created
a lack of support for the market, which in turn makes for buying opportunities.
We are also seeing effects from the end of a series of crises that erupted over
a period of about 18 months, beginning with the Asian crisis in the fall of 1997
and ending with Brazil's central-bank scandal. These crises, along with the
other events mentioned, have driven valuations to historically low levels.
So while the fund did face challenges, those challenges resulted in a lot of
prospects for bargain buying. We've also seen a large reduction in market
liquidity, which positively affects emerging-markets debt because it discourages
non-dedicated money, such as hedge funds, from moving in and out of the asset
class and increasing volatility.
In addition, we made some improvements to the proprietary models we use to
manage the fund and added a new one to try to prevent or lessen the impact of
another situation like the 1998 Russian default.
WHAT COUNTRIES IN PARTICULAR HAVE PERFORMED WELL?
Around the world, Asian debt has been one of the top performers. We increased
the portfolio's diversification by shifting money from Latin America to this
region in late summer--especially to South Korea, the Philippines and
Malaysia--given that issuance and liquidity in Asia increased over
------------------------------------
THE YEAR HAS BEEN MARKED BY
WIDE VARIATIONS IN INVESTMENT RETURNS
ACROSS REGIONS, COUNTRIES AND
SECURITIES. WE THINK WE HAVE
THE RIGHT POSITIONS
TO OUTPERFORM GOING FORWARD.
------------------------------------
See important fund and index disclosures inside front cover.
AIM EMERGING MARKETS DEBT FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 10/31/99, based on total net assets
<TABLE>
<CAPTION>
===================================================================================================================================
TOP FIVE BOND HOLDINGS FUND ALLOCATION (Pie Chart)
COUNTRY COUPON MATURITY SECURITY % OF PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
South Korea 8.875 4/2008 Notes 4.37% MALAYSIA 2.38% BRAZIL 21.18%
Brazil 7.00 4/2012 Bonds 4.11 POLAND 2.63%
Brazil 8.00 4/2014 Bonds 4.05 CASH/CASH EQUIVALENTS 3.00% MEXICO 17.08%
Russia 11.75 6/2003 Bonds 3.93 UNITED STATES 3.78% OTHER 15.91%
Mexico 11.50 5/2026 Bonds 3.87 SOUTH KOREA 4.37% RUSSIA 6.74%
VENEZUELA 4.40%
BULGARIA 4.67% ARGENTINA 13.86%
The fund's portfolio is subject to change, and there is no assurance that the fund will continue to hold any particular security.
===================================================================================================================================
</TABLE>
the past year. Although we reduced our exposure to Brazil and Argentina during
the same period because of concerns about fiscal management and the slow pace of
reform, we now plan to increase the allocation to Brazil because of its positive
performance.
Mexico was another strong position for the fund last year. We ended the
fiscal year with a large weighting there--a position we've held for some time
because of Mexico's relatively stable political situation and because the
country's public-sector finances are more in hand. We now plan to reduce
exposure there because in the short to intermediate term, we feel Brazil offers
higher returns. Mexico has a presidential election in July 2000, which has
historically been a time of very high volatility--in fact, the last three
elections ended in an economic crisis. We certainly don't expect that this time,
but we do feel that the chance of some moderate volatility could allow us to
re-enter the market at a more favorable level.
WHAT'S YOUR STRATEGY FOR THE SHORT TERM?
Recovery was the theme at the beginning of the year, and it may yet be the theme
for both the short and the long term. Emerging markets have begun to exhibit
much less volatility, which we expected because of Y2K concerns-many investors
are adopting a conservative investment posture until January 2000. We selected
more income-generating assets toward the end of the fiscal year, which may
provide a cushion in turbulent markets, and we also plan to maintain a modest
cash position over the new year.
WHAT'S THE OUTLOOK FOR 2000?
Historically, bond markets have staged a recovery on the heels of an extended
period of poor performance, and we look for 2000 to follow that trend. We're
optimistic about emerging markets because the major countries in our investment
universe continue to follow market-friendly economic policies--there appears to
be little appetite for a return to the state-controlled, low-growth,
high-inflation policies of the past. We believe this trend of solid economic
policy will drive performance in the coming year--and may offer investors a rare
investment opportunity right now.
------------------------------------
WE BELIEVE THE MARKET OFFERS
EXCELLENT LONG-TERM VALUE AT
CURRENT LEVELS AND LOOK FOR 2000
TO BE A YEAR OF RECOVERY
FOR BOND MARKETS.
------------------------------------
See important fund and index disclosures inside front cover.
AIM EMERGING MARKETS DEBT FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM EMERGING MARKETS DEBT FUND VS. BENCHMARK INDEX
10/22/92-10/31/99
($10,000 Hypo Chart)
in thousands
================================================================================
AIM AIM
EMERGING MARKETS EMERGING MARKETS J.P. MORGAN
DEBT FUND DEBT FUND EMBI
CLASS A SHARES CLASS B SHARES (BRADY) INDEX
- --------------------------------------------------------------------------------
10/22/92 9,525 10,000 10,000
10/93 13,681 14,260 14,011
10/94 12,799 13,269 12,693
10/95 13,159 13,543 13,710
10/96 18,297 18,710 19,180
10/97 20,944 21,286 21,866
10/98 14,645 14,796 20,511
10/99 17,338 17,401 23,928
Source: Lipper Inc.
Past performance cannot guarantee comparable future results.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT THIS CHART
The chart compares your fund's Class A and B shares to a benchmark index. It is
intended to give you a general idea of how your fund compared to the bond market
over the period 10/22/92-10/31/99. (Please note that the index performance
figures are for the period 10/31/92-10/31/99.) It is important to understand the
differences between your fund and an index. Your fund's total return is shown
with a sales charge and includes fund expenses and management fees. An index
measures the performance of a hypothetical portfolio. Unlike your fund, an index
is not managed, incurring no sales charges, expenses or fees. If you could buy
all the securities that make up a market index, you would incur expenses that
would affect your investment's return.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/99, including sales charges
===============================================================================
CLASS A SHARES
- -------------------------------------------------------------------------------
10 years 8.15%
5 years 5.22
1 year 12.78*
* 18.38% excluding sales charges
CLASS B SHARES
- -------------------------------------------------------------------------------
Inception (4/1/93) 8.21%
5 years 5.36
1 year 12.61*
* 17.61% excluding sales charges
CLASS C SHARES*
- -------------------------------------------------------------------------------
Inception (3/1/99) 10.74%
* Total return provided is cumulative total return that has
not been annualized; 11.74% excluding sales charges.
ADVISOR CLASS SHARES*
- -------------------------------------------------------------------------------
Inception (6/1/95) 8.06
1 year 18.87
* Sales charges do not apply to Advisor shares.
===============================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Advisor Class shares will differ from Class A,
Class B and Class C shares due to differing fees and expenses. For fund
performance calculations and a description of an index cited on this page,
please refer to the inside front cover.
AIM EMERGING MARKETS DEBT FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
CORPORATE BONDS-12.57%
ARGENTINA-2.29%
Banco Hipotecario S.A.
(Banks-Regional), Sr. Unsec.
Unsub. Notes, 10.00%, 04/17/03
(Acquired 04/07/98; Cost
$1,277,171)(b) $ 1,279,000 $ 1,179,877
- --------------------------------------------------------------
CEI Citicorp Holdings S.A.
(Investment Banking/Brokerage),
Bonds, 11.25%, 02/14/07
(Acquired 08/13/99; Cost
$2,175,315)(b)(c) ARS 3,000,000 2,333,597
- --------------------------------------------------------------
3,513,474
- --------------------------------------------------------------
BRAZIL-1.83%
Banco Nacional De Desenvolri
(Banks- Regional), Unsec. Unsub.
Floating Rate Notes, 13.64%,
06/16/08(d) 3,250,000 2,810,997
- --------------------------------------------------------------
CAYMAN ISLANDS-1.15%
PDVSA Finance Ltd.,
(Banks-Regional), Sr. Unsec.
Notes, 9.75%, 02/15/10 (Acquired
03/31/99; Cost $1,837,494)(b) 1,850,000 1,753,469
- --------------------------------------------------------------
JAMAICA-1.06%
Mechala Group
(Manufacturing-Diversified),
Series B, Sr. Gtd. Sub. Notes,
12.75%, 12/30/99 4,134,000 1,622,595
- --------------------------------------------------------------
MEXICO-6.24%
Alestra S.A., Sr. Notes, 12.625%
5/15/09 3,918,000 3,790,665
- --------------------------------------------------------------
Fideicomiso Petacalco Trust-Topolo
(Financial-Diversified), Sec.
Notes, 10.16%, 12/23/09
(Acquired 06/25/99; Cost
$1,575,000)(b) 1,750,000 1,540,000
- --------------------------------------------------------------
Grupo Televisa S.A.
(Entertainment), Sr. Disc.
Notes, 13.25%, 05/15/08(e) 2,400,000 2,055,000
- --------------------------------------------------------------
Petroleos Mexicanos (Oil &
Gas-Refining & Marketing),
Sr. Gtd. Sub. Bonds, 9.50%,
09/15/27 300,000 257,250
- --------------------------------------------------------------
Unsub. Bonds, 9.50%, 09/15/27 2,000,000 1,925,000
- --------------------------------------------------------------
9,567,915
- --------------------------------------------------------------
Total Corporate Bonds (Cost
$20,115,100) 19,268,450
- --------------------------------------------------------------
GOVERNMENT BONDS & GOVERNMENT
AGENCY OBLIGATIONS-80.32%
ARGENTINA-11.42%
Province of Buenos Aires, Series
2, Unsec. Unsub. Notes, 12.50%,
03/15/02 1,100,000 1,086,250
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
ARGENTINA-(CONTINUED)
Republic of Argentina,
Floating Rate Deb., 6.8125%,
03/31/05(d) $ 4,092,000 $ 3,666,526
- --------------------------------------------------------------
Series L, Floating Rate Gtd.
Bonds, 6.00%, 03/31/23(d) 4,670,000 3,576,281
- --------------------------------------------------------------
Unsec. Unsub. Bonds,
11.375%, 01/30/17 3,395,000 3,250,713
- --------------------------------------------------------------
9.75%, 09/19/27 6,959,000 5,923,849
- --------------------------------------------------------------
17,503,619
- --------------------------------------------------------------
BRAZIL-19.35%
Republic of Brazil,
Bonds,
11.625%, 04/15/04 1,009,000 967,379
- --------------------------------------------------------------
5.75%, 04/15/24(f) 4,220,000 2,540,271
- --------------------------------------------------------------
Floating Rate Deb., 6.9375%,
04/15/06(d) 4,136,000 3,397,782
- --------------------------------------------------------------
Floating Rate Gtd. Notes, 7.00%,
04/15/09(d) 2,100,000 1,553,177
- --------------------------------------------------------------
Floating Rate Gtd. Bonds,
7.00%, 04/15/12(d) 9,493,000 6,297,836
- --------------------------------------------------------------
6.9375%, 04/15/24(d) 5,450,000 3,816,684
- --------------------------------------------------------------
Notes, 14.50%, 10/15/09 2,014,000 2,091,539
- --------------------------------------------------------------
Series C, Bonds, 8.00%, 04/15/14 9,175,507 6,215,626
- --------------------------------------------------------------
Unsec. Bonds, 10.125%, 05/15/27 3,520,000 2,786,164
- --------------------------------------------------------------
29,666,458
- --------------------------------------------------------------
BULGARIA-4.67%
Republic of Bulgaria,
Series A, Gtd. Bonds, 2.75%,
07/28/12(f) 3,520,000 2,379,041
- --------------------------------------------------------------
Series A, Gtd. Floating Rate
Sec. Bonds, 6.50%, 07/28/24(d) 3,999,000 2,984,670
- --------------------------------------------------------------
Floating Rate PDI Deb., 6.50%,
07/28/11(d) 2,350,000 1,795,896
- --------------------------------------------------------------
7,159,607
- --------------------------------------------------------------
COLOMBIA-1.80%
Republic of Colombia,
Unsec. Unsub. Notes, 7.625%,
02/15/07 1,880,000 1,551,000
- --------------------------------------------------------------
Unsub. Notes, 9.75%, 04/23/09 1,324,000 1,208,150
- --------------------------------------------------------------
2,759,150
- --------------------------------------------------------------
QATAR-1.13%
State of Qatar, Bonds, 9.50%,
05/21/09 (Acquired 06/25/99;
Cost $1,674,580)(b) 1,658,000 1,728,714
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
KAZAKHSTAN-1.74%
Republic of Kazakhstan, Bonds,
13.625%, 10/18/04 (Acquired
09/28/99; Cost $2,669,490)(b) $ 2,700,000 $ 2,673,000
- --------------------------------------------------------------
KOREA-4.37%
Republic of Korea, Unsub. Unsec.
Notes, 8.875%, 04/15/08 6,435,000 6,707,155
- --------------------------------------------------------------
LEBANON-1.22%
Republic of Lebanon, Series 3,
Notes, 10.25%, 10/06/09 1,850,000 1,869,686
- --------------------------------------------------------------
MALAYSIA-2.38%
Republic of Malaysia, Bonds,
8.75%, 06/01/09 3,538,000 3,647,041
- --------------------------------------------------------------
MEXICO-10.67%
United Mexican States,
Bonds,
10.375%, 02/17/09 1,700,000 1,731,875
- --------------------------------------------------------------
11.375%, 09/15/16 2,381,000 2,552,263
- --------------------------------------------------------------
11.50%, 05/15/26 5,248,000 5,930,980
- --------------------------------------------------------------
Series D, Floating Rate Sec.
Gtd. Bonds 6.0675%,
12/31/19(d) 2,220,000 1,970,752
- --------------------------------------------------------------
Sec. Gtd. Bonds, 6.25%, 12/31/19 5,500,000 4,166,382
- --------------------------------------------------------------
16,352,252
- --------------------------------------------------------------
MOROCCO-1.68%
Morocco Tranche A, Registered
Loans, 5.906%, 01/01/09
(Acquired 03/11/99; Cost
$2,420,780)(b) 2,964,000 2,582,385
- --------------------------------------------------------------
PANAMA-1.61%
Republic of Panama,
Bonds,
8.875%, 09/30/27 1,017,000 828,490
- --------------------------------------------------------------
9.375%, 04/01/29 626,000 593,135
- --------------------------------------------------------------
Gtd. Deb., 4.25%, 07/17/14(f) 1,400,000 1,053,392
- --------------------------------------------------------------
2,475,017
- --------------------------------------------------------------
PERU-2.30%
Republic of Peru,
Gtd. Bonds, 3.75%, 03/07/17(f) 2,725,000 1,535,478
- --------------------------------------------------------------
PDI Bonds, 4.50%, 03/07/17(f) 3,136,000 1,984,150
- --------------------------------------------------------------
3,519,628
- --------------------------------------------------------------
PHILIPPINES-1.12%
Republic of Philippines, Bonds,
9.875%, 01/15/19 1,770,000 1,721,325
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
POLAND-2.63%
Republic of Poland,
Sec. Bonds, 3.50%, 10/27/24(f) $ 2,475,000 $ 1,524,214
- --------------------------------------------------------------
Unsec. PDI Bonds, 6.00%,
10/27/14(f) 2,812,000 2,503,501
- --------------------------------------------------------------
4,027,715
- --------------------------------------------------------------
RUSSIA-6.74%
Bank of Foreign Economic Affairs
(Vnesheconombank),
Interest in Arrears Notes, 6.0625%,
12/15/15(d)(g) 627,107 72,901
- --------------------------------------------------------------
Principal Loans, 6.0625%,
12/15/20(d)(g) 37,242,372 3,468,382
- --------------------------------------------------------------
Russian Federation, Sr. Unsec.
Unsub. Bonds, 11.75%, 06/10/03 9,870,000 6,028,191
- --------------------------------------------------------------
12.75%, 06/24/28 1,413,000 771,748
- --------------------------------------------------------------
10,341,222
- --------------------------------------------------------------
TURKEY-1.09%
Republic of Turkey,
Notes, 12.00%, 12/15/08 1,290,000 1,306,125
- --------------------------------------------------------------
Sr. Unsec. Unsub. Notes, 12.375%,
06/15/09 370,000 372,313
- --------------------------------------------------------------
1,678,438
- --------------------------------------------------------------
VENEZUELA-4.40%
Republic of Venezuela,
Floating Rate Deb., 6.313%,
12/18/07(d) 2,226,180 1,800,002
- --------------------------------------------------------------
Gtd. Sec. Bonds, 6.75%, 03/31/20 3,299,000 2,322,239
- --------------------------------------------------------------
Unsec. Bonds, 9.25%, 09/15/27 3,859,000 2,619,007
- --------------------------------------------------------------
6,741,248
- --------------------------------------------------------------
Total Government Bonds &
Government Agency
Obligations (Cost
$135,981,782) 123,153,660
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
WARRANTS-0.33%
SOVEREIGN DEBT-0.33%
Republic of Argentina (Argentina),
expiring 12/03/99(h) 8,810 9,911
- --------------------------------------------------------------
expiring 02/25/00(h) 9,630 217,879
- --------------------------------------------------------------
United Mexican States (Mexico),
expiring 02/18/00(h) 4,033 270,715
- --------------------------------------------------------------
498,505
- --------------------------------------------------------------
Total Warrants (Cost $0) 498,505
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-3.78%
STIC Liquid Assets Portfolio(i) 2,901,337 $ 2,901,337
- --------------------------------------------------------------
STIC Prime Portfolio(i) 2,901,337 2,901,337
- --------------------------------------------------------------
Total Money Market Funds (Cost
$5,802,674) 5,802,674
- --------------------------------------------------------------
TOTAL INVESTMENTS-97.00% 148,723,289
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-3.00% 4,605,719
- --------------------------------------------------------------
NET ASSETS-100.00% $153,329,008
==============================================================
</TABLE>
Investment Abbreviations:
ARS - Argentine Peso
Deb. - Debentures
Gtd. - Guaranteed
PDI - Past Due Interest
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a)Principal amount is in U.S. dollars except as indicated by note (c).
(b)Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of 1933,
as amended. The valuation of this security has been determined in accordance
with procedures established by the Board of Trustees. The aggregate market
value of these securities at 10/31/99 was $13,791,043, which represented
8.99% of the Fund's net assets.
(c)Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(d)The coupon rate shown of floating rate note represents the rate at period
end.
(e)Discount bond at purchase. Interest rate shown represents the coupon rate at
which the bond will accrue at a specified future date.
(f)The coupon rate shown on step-up coupon bonds represents the rate at period
end.
(g)Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(h)Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(i)The security shares the same investment advisor as the Fund.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $161,899,556) $148,723,289
- ------------------------------------------------------------
Foreign currencies, at value (cost $37) 37
- ------------------------------------------------------------
Receivables for:
Investments sold 2,521,069
- ------------------------------------------------------------
Fund shares sold 114,064
- ------------------------------------------------------------
Dividends and interest 3,619,496
- ------------------------------------------------------------
Other assets 44,238
- ------------------------------------------------------------
Total assets 155,022,193
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,082,939
- ------------------------------------------------------------
Fund shares reacquired 298,225
- ------------------------------------------------------------
Accrued advisory fees 145,351
- ------------------------------------------------------------
Accrued distribution fees 122,295
- ------------------------------------------------------------
Accrued accounting services fees 4,247
- ------------------------------------------------------------
Accrued trustees' fees 2,858
- ------------------------------------------------------------
Accrued operating expenses 37,270
- ------------------------------------------------------------
Total liabilities 1,693,185
- ------------------------------------------------------------
Net assets applicable to shares outstanding $153,329,008
============================================================
NET ASSETS:
Class A $ 54,330,409
============================================================
Class B $ 97,393,834
============================================================
Class C $ 208,357
============================================================
Advisor Class $ 1,396,408
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 6,543,402
============================================================
Class B 11,728,667
============================================================
Class C 25,096
============================================================
Advisor Class 168,733
============================================================
Class A:
Net asset value and redemption price per
share $ 8.30
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $8.30 / 95.25%) $ 8.71
============================================================
Class B:
Net asset value and offering price per share $ 8.30
============================================================
Class C:
Net asset value and offering price per share $ 8.30
============================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 8.28
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend $ 5,558
- ------------------------------------------------------------
Interest 21,776,257
- ------------------------------------------------------------
Securities lending 179,871
- ------------------------------------------------------------
Total investment income 21,961,686
- ------------------------------------------------------------
EXPENSES:
Advisory and administrative fees 1,712,645
- ------------------------------------------------------------
Accounting services fees 51,980
- ------------------------------------------------------------
Custodian fees 130,677
- ------------------------------------------------------------
Distribution fees -- Class A 219,862
- ------------------------------------------------------------
Distribution fees -- Class B 1,097,291
- ------------------------------------------------------------
Distribution fees -- Class C 667
- ------------------------------------------------------------
Interest expense (Note 4) 221,531
- ------------------------------------------------------------
Transfer agent fees -- Class A 139,579
- ------------------------------------------------------------
Transfer agent fees -- Class B 243,815
- ------------------------------------------------------------
Transfer agent fees -- Class C 221
- ------------------------------------------------------------
Transfer agent fees -- Advisor Class 5,019
- ------------------------------------------------------------
Trustees' fees 7,532
- ------------------------------------------------------------
Other 227,916
- ------------------------------------------------------------
Total expenses 4,058,735
- ------------------------------------------------------------
Less: Expenses paid indirectly (87,116)
- ------------------------------------------------------------
Fees waived by advisor (75,488)
- ------------------------------------------------------------
Net expenses 3,896,131
- ------------------------------------------------------------
Net investment income 18,065,555
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FORWARD CONTRACTS:
Net realized gain (loss) from:
Investment securities (22,143,209)
- ------------------------------------------------------------
Foreign currencies (775,867)
- ------------------------------------------------------------
Forward contracts 972,301
- ------------------------------------------------------------
(21,946,775)
- ------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 32,555,182
- ------------------------------------------------------------
Foreign currencies (31,683)
- ------------------------------------------------------------
32,523,499
- ------------------------------------------------------------
Net gain from investment securities, foreign
currencies and forward contracts 10,576,724
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $ 28,642,279
============================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 18,065,555 $ 33,382,360
- -------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and forward contracts (21,946,775) (69,501,940)
- -------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies and forward
contracts 32,523,499 (49,143,194)
- -------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 28,642,279 (85,262,774)
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (6,769,760) (9,422,518)
- -------------------------------------------------------------------------------------------
Class B (11,031,707) (14,937,576)
- -------------------------------------------------------------------------------------------
Class C (6,633) --
- -------------------------------------------------------------------------------------------
Advisor Class (257,455) (246,624)
- -------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (449,410) --
- -------------------------------------------------------------------------------------------
Class B (785,022) --
- -------------------------------------------------------------------------------------------
Class C (710) --
- -------------------------------------------------------------------------------------------
Advisor Class (16,159) --
- -------------------------------------------------------------------------------------------
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 (18,452,955) 3,431,336
- -------------------------------------------------------------------------------------------
Class B (17,772,062) (3,086,499)
- -------------------------------------------------------------------------------------------
Class C 206,296 --
- -------------------------------------------------------------------------------------------
Advisor Class (300,841) (518,649)
- -------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (26,994,139) (185,469,264)
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 180,323,147 365,792,411
- -------------------------------------------------------------------------------------------
End of period $153,329,008 $ 180,323,147
===========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $249,451,851 $ 285,771,413
- -------------------------------------------------------------------------------------------
Distributions in excess of net investment income (1,665,521) (41,564)
- -------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and forward contracts (81,281,069) (59,706,950)
- -------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and forward contracts (13,176,253) (45,699,752)
- -------------------------------------------------------------------------------------------
$153,329,008 $ 180,323,147
===========================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
October 31, 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
(the "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 consists of 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 were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's 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
October 31, 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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Fund and the Portfolio in the preparation of its financial statements.
A. Security Valuations--A security listed or traded on an exchange (except
convertible bonds) 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 closing bid price on that day. 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. Debt obligations (including convertible bonds) 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
yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. 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 at amortized cost which approximates market value. 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 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 as of 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 they are determined and the close of the NYSE
which would 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.
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. The Fund may elect to use a portion of the
proceeds of fund share redemptions as distributions for Federal income tax
purposes. Distributions from net realized capital gains, if any, are
generally paid annually and recorded on ex-dividend date.
On October 31, 1999, undistributed net investment income was decreased
and undistributed net realized gain (loss) increased by $372,656 as a
result of differing book/tax treatment of foreign currency transactions in
order to comply with the requirements of the American Institute of
Certified Public Accountants Statement of Position 93-2. Net assets of the
Fund were unaffected by the reclassification discussed above.
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
10
<PAGE> 13
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 $76,114,462 as of October 31,
1999 which may be carried forward to offset future taxable gains, if any,
and expires in varying increments, if not previously utilized, in the year
2007.
D. Futures Contracts--The Portfolio may purchase or sell futures contracts
as a hedge against changes in market conditions. Initial margin deposits
required upon entering into futures contracts are satisfied by the
segregation of specific securities as collateral for the account of the
broker (the Portfolio's agent in acquiring the futures position). During
the period the futures contracts are open, changes in the value of the
contracts are recognized as unrealized gains or losses by "marking to
market" on a daily basis to reflect the market value of the contracts at
the end of each day's trading. Variation margin payments are made or
received depending upon whether unrealized gains or losses are incurred.
When the contracts are closed, the Portfolio recognizes a realized gain or
loss equal to the difference between the proceeds from, or cost of, the
closing transaction and the Portfolio's basis in the contract. Risks
include the possibility of an illiquid market and that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
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. Foreign Currency Contracts--A 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 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
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.
G. Expenses--Distribution expenses directly attributable to a class of
shares are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
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 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
the Portfolio's subadvisor. 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 the Portfolio's average daily net assets exceeding $2.5 billion,
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
expenses) 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. During the year ended October 31, 1999, AIM waived
fees of $75,488.
Effective July 1, 1999, the Trust entered into a master administrative
services agreement with AIM, replacing the prior pricing and accounting
agreement. The Fund, pursuant to the master administrative services agreement
with AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund and the Portfolio. Prior to July 1,
1999, AIM was the pricing and accounting agent for the Fund and the Portfolio.
The monthly fee for these services paid to AIM was a percentage, not to exceed
0.03% annually, of a Fund's average daily net assets. The annual fee rate was
derived based on the aggregate net assets of the funds which comprised 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 was calculated at the rate of 0.03% of the first $5
billion of assets and 0.02% to the assets in excess of $5 billion. An amount is
allocated to and paid by each
11
<PAGE> 14
such fund based on its relative average daily net assets. For the year ended
October 31, 1999, AIM was paid $51,980 for such services. The Fund, pursuant to
a transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") a fee for providing transfer agency and shareholder services to the
Fund. For the year ended October 31, 1999, AFS was paid $345,384 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 a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares, Class B shares and Class C shares (collectively the
"Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at
the annual rate of 0.35% of the Fund's average daily net assets of Class A
shares and 1.00% of the average daily net assets of Class B and C 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. For the year ended October 31, 1999, the Class A, Class B and Class C
shares paid AIM Distributors $219,862, $1,097,291 and $667, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $26,041 from sales of the Class A
shares of the Fund during the year ended October 31, 1999. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 1999,
AIM Distributors received $481 in contingent deferred sales charges imposed on
redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
During the year ended October 31, 1999, the Fund received reductions in
custodian fees of $87,116 under expense offset arrangements. The effect of the
above arrangements resulted in a reduction of the Fund's total expenses of
$87,116 during the year ended October 31, 1999.
NOTE 4-BANK BORROWINGS
The Fund is a participant 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) $1,000,000,000 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. Prior to May
28, 1999, the Fund, along with certain other funds advised and/or administered
by AIM, had a line of credit with BankBoston and State Street Bank & Trust
Company. The arrangements with the banks allowed the Fund and certain other
funds to borrow, on a first come, first served basis, an aggregate maximum
amount of $250,000,000.
During the year ended October 31, 1999, the average outstanding daily balance
of bank loans for the Fund was $3,956,575 with a weighted average interest rate
of 5.60%. Interest expense for the Fund for the year ended October 31, 1999 was
$221,531.
NOTE 5-PORTFOLIO SECURITIES LOANED
At October 31, 1999, there were no securities on loan to brokers. For the year
ended October 31, 1999, the Portfolio received fees of $179,871 for securities
lending.
For international securities, cash collateral is received by the Fund against
loaned securities in an amount at least equal to 105% of the market value of the
loaned securities at the inception of each loan. This collateral must be
maintained at not less than 103% of the market value of the loaned securities
during the period of the loan. For domestic securities, cash collateral is
received by the Fund against loaned securities in the amount at least equal to
102% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 100% of the market value of
the loaned securities during the period of the loan. The cash collateral is
invested in a securities lending trust which consists of a portfolio of high
quality short duration securities whose average effective duration is restricted
to 120 days or less.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the year ended October 31, 1999 was
$553,770,582 and $602,932,879, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 4,402,200
- ---------------------------------------------------------
Aggregate unrealized appreciation
(depreciation) of investment securities (22,874,837)
- ---------------------------------------------------------
Net unrealized appreciation (depreciation)
of investment securities $(18,472,637)
=========================================================
Cost of investments for tax purposes is $167,195,926.
</TABLE>
12
<PAGE> 15
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 1999 and 1998
were as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 3,233,391 $ 26,598,153 10,918,639 $ 129,801,507
- ---------------------------------------------------------------------------------------------------------------------
Class B 4,696,545 38,346,742 5,958,185 73,991,330
- ---------------------------------------------------------------------------------------------------------------------
Class C* 24,266 199,586 -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class 363,714 2,925,142 490,309 6,221,370
- ---------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 565,425 4,586,556 2,191,470 26,459,355
- ---------------------------------------------------------------------------------------------------------------------
Class B 906,003 7,345,956 3,020,192 36,460,585
- ---------------------------------------------------------------------------------------------------------------------
Class C* 830 6,710 -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class 33,070 268,042 76,464 920,280
- ---------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (6,073,553) (49,637,664) (12,901,851) (152,829,526)
- ---------------------------------------------------------------------------------------------------------------------
Class B (7,791,891) (63,464,760) (9,736,068) (113,538,414)
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class (431,949) (3,494,025) (602,542) (7,660,299)
- ---------------------------------------------------------------------------------------------------------------------
(4,474,149) $(36,319,562) (585,202) $ (173,812)
=====================================================================================================================
</TABLE>
* Class C shares commenced sales on March 1, 1999.
NOTE 8-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,
------------------------------------------------------
1999 1998(a) 1997(a) 1996(a) 1995
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.86 $15.56 $ 14.85 $ 11.70 $ 12.56
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.86 1.35(b) 1.19 1.27 1.35
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.51 (4.80) 0.93 3.09 (1.09)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations 1.37 (3.45) 2.12 4.36 0.26
- --------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.93) (1.06) (1.18) (1.11) (1.03)
- --------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (2.83) (0.23) (0.10) (0.03)
- --------------------------------------------------------------------------------------------------------------------
Return of capital -- (0.36) -- -- (0.06)
- --------------------------------------------------------------------------------------------------------------------
Total distributions (0.93) (4.25) (1.41) (1.21) (1.12)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.30 $ 7.86 $ 15.56 $ 14.85 $ 11.70
====================================================================================================================
Total return(c) 18.38% (30.07)% 14.46% 39.05% 2.81%
====================================================================================================================
Ratios and supplemental data:
Net assets, end of period (in 000's) $54,330 $69,321 $133,973 $178,318 $142,002
====================================================================================================================
Ratio of net investment income to average net assets:(d) 10.73%(e) 11.27% 7.39% 9.52% 11.85%
====================================================================================================================
Ratio of expenses to average net assets excluding interest
expense:(f) 1.75%(e) 1.74% 1.58% 1.69% 1.75%
====================================================================================================================
Ratio of interest expense to average net asset 0.13% N/A N/A 0.04% N/A
====================================================================================================================
Portfolio turnover rate 336% 339% 214% 290% 213%
====================================================================================================================
</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) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements was 10.69% for 1999.
(e) Ratios are based on average net assets of $62,817,833.
(f) After fee waiver and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
1.79% for 1999.
13
<PAGE> 16
NOTE 8-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,
-----------------------------------------------------------
1999 1998(a) 1997(a) 1996(a) 1995
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.86 $ 15.54 $ 14.83 $ 11.69 $ 12.56
- -------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.81 1.28(b) 1.09 1.17 1.27
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.51 (4.79) 0.93 3.09 (1.09)
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations 1.32 (3.51) 2.02 4.26 0.18
- -------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.88) (0.98) (1.08) (1.03) (0.96)
- -------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (2.83) (0.23) (0.09) (0.03)
- -------------------------------------------------------------------------------------------------------------------------
Return of capital -- (0.36) -- -- (0.06)
- -------------------------------------------------------------------------------------------------------------------------
Total distributions (0.88) (4.17) (1.31) (1.12) (1.05)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.30 $ 7.86 $ 15.54 $ 14.83 $ 11.69
=========================================================================================================================
Total return(c) 17.61% (30.49)% 13.77% 38.16% 2.07%
=========================================================================================================================
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 97,394 $109,406 $228,101 $251,002 $214,897
=========================================================================================================================
Ratio of net investment income to average net assets(d) 10.08%(e) 10.62% 6.74% 8.87% 11.20%
=========================================================================================================================
Ratio of expenses to average net assets excluding interest
expense:(f) 2.40%(e) 2.39% 2.23% 2.34% 2.40%
=========================================================================================================================
Ratio of interest expense to average net assets 0.13% N/A N/A 0.04% N/A
=========================================================================================================================
Portfolio turnover rate 336% 339% 214% 290% 213%
=========================================================================================================================
</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) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements was 10.04% for 1999.
(e) Ratios are based on average net assets of $109,729,116.
(f) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.44% for 1999.
14
<PAGE> 17
NOTE 8-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 -----------------------------------------------------------
---------------- JUNE 1, 1995
MARCH 1, 1999 YEAR ENDED OCTOBER 31, TO
TO ---------------------------- OCTOBER 31,
OCTOBER 31, 1999 1999(a) 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 0.53 0.87 1.40(b) 1.22 1.34 0.57
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.37 0.54 (4.79) 0.93 3.05 0.17
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment
operations 0.90 1.41 (3.39) 2.15 4.39 0.74
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.56) (0.96) (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 (0.56) (0.96) (4.30) (1.46) (1.27) (0.47)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.30 $ 8.28 $ 7.83 $15.52 $14.83 $11.71
=================================================================================================================================
Total return(c) 11.74% 18.87% (29.79)% 14.72% 39.38% 6.54%
=================================================================================================================================
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 208 $1,396 $1,596 $3,719 $15,298 $1,463
=================================================================================================================================
Ratio of net investment income to average net
assets(d) 10.08%(e) 11.08%(f) 11.62% 7.74% 9.87% 12.20%(g)
=================================================================================================================================
Ratio of expenses to average net assets excluding
interest expense:(h) 2.40%(e) 1.40%(f) 1.39% 1.23% 1.34% 1.40%(g)
=================================================================================================================================
Ratio of interest expenses to average net assets 0.13% 0.13% N/A N/A 0.04% N/A
=================================================================================================================================
Portfolio turnover rate 336% 336% 339% 214% 290% 213%(f)
=================================================================================================================================
</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) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 10.04% (annualized) and 11.04% for Class C and Advisor
class, respectively, for 1999.
(e) Ratios are annualized and based on average net assets of $99,297.
(f) Ratios are based on average net assets of $2,258,611.
(g) Annualized.
(h) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
2.44% (annualized) and 1.44% for Class C and Advisor Class, respectively,
for 1999
NOTE 9-SUBSEQUENT EVENT
On November 3, 1999, the Board of Trustees approved the conversion of Advisor
Class Shares into Class A Shares. The proposed effective date of this conversion
is February 11, 2000.
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 schedule 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 at October 31, 1999, and
the results of its operations, the changes in its net
assets and the financial highlights for the periods
indicated, 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
October 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinions
expressed above.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 23, 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 TRANSFER AGENT
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President A I M Fund Services, Inc.
P.O. Box 4739
Ruth H. Quigley Carol F. Relihan Houston, TX 77210-4739
Private Investor Vice President
CUSTODIAN
Mary J. Benson
Assistant Vice President and State Street Bank and Trust Company
Assistant Treasurer 225 Franklin Street
Boston, MA 02110
Sheri Morris
Assistant Vice President and COUNSEL TO THE FUND
Assistant Treasurer
Kirkpatrick & Lockhart LLP
Nancy L. Martin 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Ofelia M. Mayo COUNSEL TO THE TRUSTEES
Assistant Secretary
Paul, Hastings, Janofsky & Walker LLP
Kathleen J. Pflueger Twenty Third Floor
Assistant Secretary 555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
160 Federal St.
Boston, MA 02110
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION - UNAUDITED
AIM Emerging Markets Debt Fund paid ordinary dividends in the amount of $0.930,
$0.877, $0.564 and $0.958 per share to Class A, Class B, Class C and Advisor
Class shareholders, respectively during its tax year ended October 31, 1999. Of
this amount, 0% is eligible for the dividends received deduction for
corporations.
<PAGE> 20
THE AIM FAMILY 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 Capital Development Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately
AIM Constellation Fund $120 billion in assets for more than 6.4
AIM Dent Demographic Trends Fund INTERNATIONAL GROWTH FUNDS million shareholders, including
AIM Large Cap Growth Fund AIM Advisor International Value Fund individual investors, corporate clients
AIM Mid Cap Equity Fund AIM Asian Growth Fund and financial institutions, as of
AIM Mid Cap Growth Fund AIM Developing Markets Fund September 30, 1999.
AIM Mid Cap Opportunities Fund AIM Euroland Growth Fund(4) The AIM Family of Funds--Registered
AIM Select Growth Fund AIM European Development Fund Trademark-- is distributed nationwide,
AIM Small Cap Growth Fund(2) AIM International Equity Fund and AIM today is the 10th-largest mutual
AIM Small Cap Opportunities Fund(3) AIM Japan Growth Fund fund complex in the United States in
AIM Value Fund AIM Latin American Growth Fund assets under management, according to
AIM Weingarten Fund AIM New Pacific Growth Fund Strategic Insight, an independent mutual
fund monitor.
GROWTH & INCOME FUNDS GLOBAL GROWTH FUNDS
AIM Advisor Flex Fund AIM Global Aggressive Growth Fund
AIM Advisor Large Cap Value Fund AIM Global Growth Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund GLOBAL GROWTH & INCOME FUNDS
AIM Basic Value Fund AIM Global Growth & Income Fund
AIM Charter Fund AIM Global Utilities Fund
INCOME FUNDS GLOBAL INCOME FUNDS
AIM Floating Rate Fund AIM Emerging Markets Debt Fund
AIM High Yield Fund AIM Global Government Income Fund
AIM High Yield Fund II AIM Global Income Fund
AIM Income Fund AIM Strategic Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund THEME FUNDS
AIM Global Consumer Products and Services Fund
TAX-FREE INCOME FUNDS AIM Global Financial Services Fund
AIM High Income Municipal Fund AIM Global Health Care Fund
AIM Municipal Bond Fund AIM Global Infrastructure Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Resources Fund
AIM Tax-Free Intermediate Fund AIM Global Telecommunications and Technology Fund(5)
AIM Global Trends Fund(6)
</TABLE>
(1)AIM Aggressive Growth Fund reopened to new investors on November 16, 1998.
(2)AIM Small Cap Growth Fund closed to new investors on November 8, 1999. (3)AIM
Small Cap Opportunities Fund closed to new investors on November 4, 1999. (4)On
September 1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund.
Previously the fund invested in all size companies in most areas of Europe. The
fund now seeks to invest at least 65% of its assets in large-cap companies
within countries using the euro as their currency (EMU-member countries). (5)On
June 1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (6) Effective August 27, 1999, AIM
Global Trends Fund was restructured to operate as a traditional mutual fund.
Before that date, the fund operated as a fund of funds. For more complete
information about any AIM fund(s), including sales charges and expenses, ask
your financial advisor or securities dealer for a free prospectus(es). Please
read the prospectus(es) carefully before you invest or send money. If used as
sales material after January 20, 2000, this report must be accompanied by a
current Quarterly Review of Performance for AIM Funds.
[AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE
--Registered Trademark--
A I M Distributors, Inc.
EMD-AR-1
