<PAGE> 1
SCHEDULE OF INVESTMENTS
April 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CORPORATE BONDS-9.51%
BRAZIL-3.86%
Banco Nacional De Desenvolri
(Banks-Regional), Unsec. Unsub.
Floating Rate Notes, 12.69%,
06/16/08(a) $ 6,000,000 $ 5,358,798
--------------------------------------------------------------
MEXICO-4.70%
Petroleos Mexicanos (Oil &
Gas-Refining & Marketing),
Sr. Gtd. Sub. Bonds, 9.50%,
09/15/27 4,650,000 4,568,625
--------------------------------------------------------------
Unsub. Series P Bonds, 9.50%,
09/15/27 2,000,000 1,958,100
--------------------------------------------------------------
6,526,725
--------------------------------------------------------------
SOUTH KOREA-0.95%
Hanvit Bank (Banks-Money Center),
Unsec. Sub. Notes, 12.75%,
03/01/10 1,300,000 1,323,725
--------------------------------------------------------------
Total Corporate Bonds (Cost
$13,206,947) 13,209,248
--------------------------------------------------------------
GOVERNMENT BONDS & GOVERNMENT
AGENCY OBLIGATIONS-81.67%
ALGERIA-0.78%
Algeria Loan Assignment,
Tranche 1 6.77%, 09/04/06 845,000 673,887
--------------------------------------------------------------
Tranche 3 6.77%, 03/04/10 540,000 403,650
--------------------------------------------------------------
1,077,537
--------------------------------------------------------------
ARGENTINA-13.04%
Republic of Argentina,
Bonds, 12.00%, 02/01/20 3,870,000 3,829,365
--------------------------------------------------------------
Floating Rate Deb., 7.38%,
03/31/05(a) 3,000,000 2,787,174
--------------------------------------------------------------
Sec. Gtd. Floating Rate Series
L-GP Bonds, 6.00%, 03/31/23(a) 10,630,000 7,510,276
--------------------------------------------------------------
Unsec. Unsub. Bonds, 9.75%,
09/19/27 4,709,000 3,990,877
--------------------------------------------------------------
18,117,692
--------------------------------------------------------------
BRAZIL-13.15%
Republic of Brazil,
Bonds, 12.25%, 03/06/30 5,030,000 4,609,995
--------------------------------------------------------------
Floating Rate Gtd. Bonds, 7.44%,
04/15/12(a) 5,719,000 4,146,441
--------------------------------------------------------------
Floating Rate Gtd. Bonds, Series
RG, 7.44%, 04/15/12(a) 3,328,000 2,412,897
--------------------------------------------------------------
Series C Bonds, 8.00%, 04/15/14 6,030,193 4,350,380
--------------------------------------------------------------
Unsec. Bonds, 10.13%, 05/15/27 3,520,000 2,748,645
--------------------------------------------------------------
18,268,358
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BULGARIA-4.39%
Republic of Bulgaria,
Floating Rate PDI Deb., 7.06%,
07/28/11(a) $ 2,860,000 $ 2,166,876
--------------------------------------------------------------
Gtd. Floating Rate Sec. Series A
Bonds, 7.06%, 07/28/24(a) 2,749,000 2,113,395
--------------------------------------------------------------
Gtd. Series A Bonds, 2.75%,
07/28/12(b) 2,600,000 1,815,806
--------------------------------------------------------------
6,096,077
--------------------------------------------------------------
COLOMBIA-1.23%
Republic of Colombia,
Unsec. Unsub. Notes, 7.63%,
02/15/07 1,880,000 1,372,400
--------------------------------------------------------------
Unsub. Notes, 9.75%, 04/23/09 424,000 333,900
--------------------------------------------------------------
1,706,300
--------------------------------------------------------------
CROATIA-1.03%
Croatia,
Floating Rate Series A Notes,
7.06%, 07/31/10(a) 1,011,818 898,582
--------------------------------------------------------------
Floating Rate Series B Notes,
7.06%, 07/31/06(a) 570,896 532,236
--------------------------------------------------------------
1,430,818
--------------------------------------------------------------
KAZAKHSTAN-2.13%
Republic of Kazakhstan, Notes,
13.63%, 10/18/04 (Acquired
09/28/99; Cost $2,669,490)(c) 2,700,000 2,963,250
--------------------------------------------------------------
KOREA-3.82%
Republic of Korea, Unsub. Unsec.
Notes, 8.88%, 04/15/08 5,135,000 5,308,306
--------------------------------------------------------------
LEBANON-0.18%
Republic of Lebanon, Series 3
Notes, 10.25%, 10/06/09 250,000 249,960
--------------------------------------------------------------
MALAYSIA-2.58%
Republic of Malaysia, Bonds,
8.75%, 06/01/09 3,538,000 3,584,525
--------------------------------------------------------------
MEXICO-6.82%
United Mexican States,
Gtd. Sec. Floating Rate Series B
Notes, 6.94%, 12/31/19(a) 3,150,000 3,111,838
--------------------------------------------------------------
Gtd. Sec. Floating Rate Series
W-A Notes, 6.25%, 12/31/19(a) 173,000 143,551
--------------------------------------------------------------
Gtd. Sec. Series W-B Bonds,
6.25%, 12/31/19 7,500,000 6,223,320
--------------------------------------------------------------
9,478,709
--------------------------------------------------------------
MOROCCO-1.17%
Morocco Tranche A, Registered
Loans, 6.84%, 01/01/09 1,808,000 1,618,160
--------------------------------------------------------------
NIGERIA-0.75%
Central Bank of Nigeria,
Sec.-Series WW Gtd. Sec. Notes,
6.25%, 11/15/20 2,000,000 1,044,190
--------------------------------------------------------------
</TABLE>
6
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
PANAMA-1.95%
Republic of Panama, Bonds,
8.88%, 09/30/27 $ 1,017,000 $ 872,382
--------------------------------------------------------------
9.38%, 04/01/29 626,000 591,570
--------------------------------------------------------------
Floating Rate PDI Deb., 7.06%,
07/17/16(a) 1,530,830 1,248,964
--------------------------------------------------------------
2,712,916
--------------------------------------------------------------
PERU-2.26%
Republic of Peru,
Gtd. Bonds, 3.75%, 03/07/17(b) 5,215,025 1,402,845
--------------------------------------------------------------
PDI Bonds, 4.50%, 03/07/17(b) 5,237,234 1,730,593
--------------------------------------------------------------
3,133,438
--------------------------------------------------------------
PHILIPPINES-1.81%
Republic of Philippines,
Bonds, 9.88%, 01/15/19 970,000 860,875
--------------------------------------------------------------
Unsec. Bonds, 8.88%, 04/15/08 1,800,000 1,653,763
--------------------------------------------------------------
2,514,638
--------------------------------------------------------------
POLAND-2.93%
Republic of Poland,
Sec. Bonds, 3.50%, 10/27/24(b) 4,668,631 1,535,173
--------------------------------------------------------------
Unsec. PDI Bonds, 6.00%,
10/27/14(b) 4,668,181 2,538,600
--------------------------------------------------------------
4,073,773
--------------------------------------------------------------
RUSSIA-12.94%
Bank of Foreign Economic Affairs
(Vnesheconombank),
Interest in Arrears Notes,
6.91%, 12/15/15(a)(d) 627,107 174,022
--------------------------------------------------------------
Unsec. Deb., 6.91%,
12/15/20(a)(d) 20,242,372 5,592,967
--------------------------------------------------------------
Russian Federation,
Sr. Unsec. Unsub. Bonds,
11.75%, 06/10/03 1,250,000 1,106,359
--------------------------------------------------------------
12.75%, 06/24/28 5,663,000 4,630,057
--------------------------------------------------------------
Unsec. Unsub. Notes,
8.75%, 07/24/05 5,020,000 3,602,392
--------------------------------------------------------------
11.00%, 07/24/18 4,000,000 2,868,940
--------------------------------------------------------------
17,974,737
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
SOUTH AFRICA-0.70%
Republic of South Africa, Notes,
9.13%, 05/19/09 $ 1,000,000 $ 969,650
--------------------------------------------------------------
TURKEY-3.24%
Republic of Turkey,
Bonds, 11.88%, 11/15/04 700,000 737,625
--------------------------------------------------------------
Sr. Unsec. Unsub. Bonds, 11.88%,
01/15/30 2,300,000 2,494,831
--------------------------------------------------------------
Sr. Unsec. Unsub. Notes, 12.38%,
06/15/09 1,170,000 1,263,600
--------------------------------------------------------------
4,496,056
--------------------------------------------------------------
VENEZUELA-4.77%
Republic of Venezuela,
Unsec. Bonds, 9.25%, 09/15/27 4,259,000 2,733,984
--------------------------------------------------------------
Series DL, Floating Rate Deb.,
7.00%, 12/18/07(a) 2,095,225 1,648,536
--------------------------------------------------------------
Unsec. Bonds, 13.63%, 08/15/18 2,500,000 2,238,770
--------------------------------------------------------------
6,621,290
--------------------------------------------------------------
Total Government Bonds &
Government Agency
Obligations (Cost
$114,430,480) 113,440,380
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-7.05%
STIC Liquid Assets Portfolio(e) 4,899,816 4,899,816
--------------------------------------------------------------
STIC Prime Portfolio(e) 4,899,816 4,899,816
--------------------------------------------------------------
Total Money Market Funds (Cost
$9,799,632) 9,799,632
--------------------------------------------------------------
TOTAL INVESTMENTS-98.23% (Cost
$137,437,059) 136,449,260
--------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.77% 2,453,369
--------------------------------------------------------------
NET ASSETS-100.00% $138,902,629
--------------------------------------------------------------
</TABLE>
Investment Abbreviations:
Deb. - Debentures
Gtd. - Guaranteed
PDI - Past due interests
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) The coupon rate shown on floating rate notes represents the rate at period
end.
(b) Step bond issued at a discount. The interest rate represents the coupon rate
at which the bond will accrue at a specified future date.
(c) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The market
value at 04/30/00 was $2,963,250, which represented 2.13% of the Fund's net
assets.
(d) Defaulted security. Currently, the issuer is partially in default with
respect to interest payments.
(e) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
7
<PAGE> 3
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$137,437,059) $136,449,260
------------------------------------------------------------
Receivables for:
Investments sold 5,543,715
------------------------------------------------------------
Dividends and interest 2,827,523
------------------------------------------------------------
Fund shares sold 104,913
------------------------------------------------------------
Other assets 20,498
------------------------------------------------------------
Total assets 144,945,909
------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 4,935,883
------------------------------------------------------------
Fund shares reacquired 739,295
------------------------------------------------------------
Accrued advisory fees 77,953
------------------------------------------------------------
Accrued accounting services fees 4,098
------------------------------------------------------------
Accrued distribution fees 114,001
------------------------------------------------------------
Accrued trustees' fees 964
------------------------------------------------------------
Accrued operating expenses 171,086
------------------------------------------------------------
Total liabilities 6,043,280
------------------------------------------------------------
Net assets applicable to shares outstanding $138,902,629
------------------------------------------------------------
NET ASSETS:
Class A $ 50,806,647
------------------------------------------------------------
Class B $ 87,698,010
------------------------------------------------------------
Class C $ 397,972
------------------------------------------------------------
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 5,769,310
------------------------------------------------------------
Class B 9,958,979
------------------------------------------------------------
Class C 45,224
------------------------------------------------------------
Class A:
Net asset value and redemption price per
share $ 8.81
------------------------------------------------------------
Offering price per share:
(Net asset value of $8.81 divided by
95.25%) $ 9.25
------------------------------------------------------------
Class B:
Net asset value and offering price per share $ 8.81
------------------------------------------------------------
Class C:
Net asset value and offering price per share $ 8.80
------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 8,203,459
------------------------------------------------------------
Dividend 211,578
------------------------------------------------------------
Securities lending 4,209
------------------------------------------------------------
Total investment income 8,419,246
------------------------------------------------------------
EXPENSES:
Advisory and administrative fees 717,913
------------------------------------------------------------
Accounting services fees 24,863
------------------------------------------------------------
Custodian fees 70,979
------------------------------------------------------------
Distribution fees -- Class A 94,867
------------------------------------------------------------
Distribution fees -- Class B 481,163
------------------------------------------------------------
Distribution fees -- Class C 1,561
------------------------------------------------------------
Transfer agent fees 186,026
------------------------------------------------------------
Trustees' fees 3,938
------------------------------------------------------------
Other 194,928
------------------------------------------------------------
Total expenses 1,776,238
------------------------------------------------------------
Less: Expenses paid indirectly (8,741)
------------------------------------------------------------
Fees waived by advisor (132,449)
------------------------------------------------------------
Net expenses 1,635,048
------------------------------------------------------------
Net investment income 6,784,198
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES
Net realized gain (loss) from:
Investment securities (2,287,322)
------------------------------------------------------------
Foreign currencies (502)
------------------------------------------------------------
(2,287,824)
------------------------------------------------------------
Change in net unrealized appreciation of
investment securities 12,188,455
------------------------------------------------------------
Net gain from investment securities and foreign
currencies 9,900,631
------------------------------------------------------------
Net increase in net assets resulting from
operations $16,684,829
------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 4
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2000 and the year ended October 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
2000 1999
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 6,784,198 $ 18,065,555
-------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and forward contracts (2,287,824) (21,946,775)
-------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and forward contracts 12,188,455 32,523,499
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 16,684,829 28,642,279
-------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (2,542,551) (6,769,760)
-------------------------------------------------------------------------------------------
Class B (4,206,410) (11,031,707)
-------------------------------------------------------------------------------------------
Class C (13,747) (6,633)
-------------------------------------------------------------------------------------------
Advisor Class* (21,490) (257,455)
-------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (223,528) (449,410)
-------------------------------------------------------------------------------------------
Class B (396,805) (785,022)
-------------------------------------------------------------------------------------------
Class C (1,287) (710)
-------------------------------------------------------------------------------------------
Advisor Class* (3,778) (16,159)
-------------------------------------------------------------------------------------------
Share transactions-net:
Class A (6,817,173) (18,452,955)
-------------------------------------------------------------------------------------------
Class B (15,590,097) (17,772,062)
-------------------------------------------------------------------------------------------
Class C 181,074 206,296
-------------------------------------------------------------------------------------------
Advisor Class* (1,475,416) (300,841)
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (14,426,379) (26,994,139)
-------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 153,329,008 180,323,147
-------------------------------------------------------------------------------------------
End of period $138,902,629 $ 153,329,008
-------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Shares of beneficial interest $225,750,239 $ 249,451,851
-------------------------------------------------------------------------------------------
Distributions in excess of net investment income (2,290,919) (1,665,521)
-------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and forward contracts (83,568,893) (81,281,069)
-------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and forward contracts (987,798) (13,176,253)
-------------------------------------------------------------------------------------------
$138,902,629 $ 153,329,008
-------------------------------------------------------------------------------------------
</TABLE>
* Advisor Class shares were converted to Class A shares effective as of the
close of business on February 11, 2000.
See Notes to Financial Statements.
9
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
April 30, 2000
(Unaudited)
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 currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A 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
April 30, 2000, 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 as of the close of the
customary trading session 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 option
contracts generally will be valued 15 minutes after the close of the
customary trading session 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 customary trading session 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 and Investment Income -- 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 is recorded on the ex-dividend date.
C. Distributions -- Distributions from income are recorded on ex-dividend date,
and are declared and paid monthly. Distributions from net realized capital
gains, if any, are generally paid annually and recorded on ex-dividend date.
The Fund may elect to use a portion of the proceeds of capital stock
redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to
10
<PAGE> 6
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 which may be
carried forward to offset future taxable gains, if any, which expires, if not
previously utilized, in the year 2007.
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 (excluding interest, taxes, dividends on short sales, extraordinary
items and increases in expenses due to offset arrangements, if any) to the
maximum annual rate of 1.75%, 2.40% and 2.40% of the average daily net assets of
the Fund's Class A, Class B and Class C shares, respectively. During the six
months ended April 30, 2000, AIM waived fees of $132,449.
The Fund, pursuant to a 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. For the six months ended
April 30, 2000, AIM was paid $24,863 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 six months ended April 30, 2000, AFS
was paid $105,507 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 and Class C shares of the Fund. The Trust has adopted plans
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 six months ended April 30,
2000, the Class A, Class B and Class C shares paid AIM Distributors $94,867,
$481,163 and $1,561, respectively, as compensation under the Plans.
11
<PAGE> 7
AIM Distributors received commissions of $6,262 from sales of the Class A
shares of the Fund during the six months ended April 30, 2000. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
2000, AIM Distributors received $842 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 six months ended April 30, 2000, the Fund received reductions in
custodian fees of $8,741 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $8,741
during the six months ended April 30, 2000.
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. During the six
months ended April 30, 2000, the Fund did not borrow under the line of credit
agreement. The funds which are party to the line of credit are charged a
commitment fee of 0.09% on the unused balance of the committed line. The
commitment fee is allocated among the funds based on their respective average
net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans would be secured by collateral equal to no less than
the market value, determined daily, of the loaned securities. Such collateral
will be cash or debt securities issued or guaranteed by the U.S. Government or
any of its agencies. Cash collateral pursuant to these loans would be invested
in short-term money market instruments or affiliated money market funds. Lending
securities entails a risk of loss to the Fund if and to the extent that the
market value of the securities loaned were to increase and the lender did not
increase the collateral accordingly.
At April 30, 2000, there were no securities on loan to brokers. For the six
months ended April 30, 2000, the Portfolio received fees of $4,209 for
securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the six months ended April 30, 2000
was $125,447,732 and $152,938,731, respectively. The amount of unrealized
appreciation (depreciation) of investment securities, for tax purposes, as of
April 30, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 5,119,452
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (10,899,938)
---------------------------------------------------------
Net unrealized appreciation (depreciation)
of investment securities $ (5,780,486)
---------------------------------------------------------
</TABLE>
Cost of investments for tax purposes is $142,229,746.
12
<PAGE> 8
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 2000 and the
year ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
2000 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 691,645 $ 6,170,127 3,233,391 $ 26,598,153
-------------------------------------------------------------------------------------------------------------------
Class B 379,876 3,376,957 4,696,545 38,346,742
-------------------------------------------------------------------------------------------------------------------
Class C* 43,592 388,639 24,266 199,586
-------------------------------------------------------------------------------------------------------------------
Advisor Class** 168 1,448 363,714 2,925,142
-------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 190,320 1,673,024 565,425 4,586,556
-------------------------------------------------------------------------------------------------------------------
Class B 321,573 2,826,274 906,003 7,345,956
-------------------------------------------------------------------------------------------------------------------
Class C* 1,355 11,954 830 6,710
-------------------------------------------------------------------------------------------------------------------
Advisor Class** 2,817 24,140 33,070 268,042
-------------------------------------------------------------------------------------------------------------------
Conversion of Advisor Class shares to Class A shares***:
Class A 64,467 576,982 -- --
-------------------------------------------------------------------------------------------------------------------
Advisor Class (64,684) (576,982) -- --
-------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (1,720,524) (15,237,306) (6,073,553) (49,637,664)
-------------------------------------------------------------------------------------------------------------------
Class B (2,471,137) (21,793,328) (7,791,891) (63,464,760)
-------------------------------------------------------------------------------------------------------------------
Class C* (24,819) (219,519) -- --
-------------------------------------------------------------------------------------------------------------------
Advisor Class** (107,034) (924,022) (431,949) (3,494,025)
-------------------------------------------------------------------------------------------------------------------
(2,692,385) $(23,701,612) (4,474,149) $(36,319,562)
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Class C shares commenced sales on March 1, 1999.
** Advisor Class share activity for the period November 1, 1999 through
February 11, 2000 (date of conversion).
*** Effective as of the close of business February 11, 2000, pursuant to
approval by the Board of Trustees on November 3, 1999, all outstanding
shares of Advisor Class shares were converted to Class A shares of the fund.
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
--------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ------------------------------------------------------
2000 1999 1998(a) 1997(a) 1996(a) 1995
---------------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.30 $ 7.86 $15.56 $ 14.85 $ 11.70 $ 12.56
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.40 0.86 1.35(b) 1.19 1.27 1.35
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.56 0.51 (4.80) 0.93 3.09 (1.09)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations 0.96 1.37 (3.45) 2.12 4.36 0.26
---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.45) (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 (0.45) (0.93) (4.25) (1.41) (1.21) (1.12)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.81 $ 8.30 $ 7.86 $ 15.56 $ 14.85 $ 11.70
---------------------------------------------------------------------------------------------------------------------------------
Total return(c) 11.57% 18.38% (30.07)% 14.46% 39.05% 2.81%
---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data:
Net assets, end of period (000s omitted) $50,807 $54,330 $69,321 $133,973 $178,318 $142,002
---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets including
interest expense:
With fee waivers and/or expense reimbursements 1.76%(d) 1.88% 1.74% 1.58% 1.73% 1.75%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.94%(d) 1.92% 1.74% 1.58% 1.73% 1.75%
---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets excluding
interest expense:
With fee waivers and/or expense reimbursements 1.76%(d) 1.75% 1.74% 1.58% 1.69% 1.75%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.94%(d) 1.79% 1.74% 1.58% 1.69% 1.75%
---------------------------------------------------------------------------------------------------------------------------------
Ratio of interest expense to average net assets -- 0.13% -- -- 0.04% --
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 9.38%(d) 10.73% 11.27% 7.39% 9.52% 11.85%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 91% 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) Ratios are annualized and based on average net assets of $54,507,612.
13
<PAGE> 9
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, --------------------------------------------------------
2000(a) 1999 1998(a) 1997(a) 1996(a) 1995
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.30 $ 7.86 $ 15.54 $ 14.83 $ 11.69 $ 12.56
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.38 0.81 1.28(b) 1.09 1.17 1.27
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.55 0.51 (4.79) 0.93 3.09 (1.09)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment
operations 0.93 1.32 (3.51) 2.02 4.26 0.18
---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.42) (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 (0.42) (0.88) (4.17) (1.31) (1.12) (1.05)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.81 $ 8.30 $ 7.86 $ 15.54 $ 14.83 $ 11.69
---------------------------------------------------------------------------------------------------------------------------------
Total return(c) 11.23% 17.61% (30.49)% 13.77% 38.16% 2.07%
---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data:
Net assets, end of period (000s omitted) $ 87,698 $ 97,394 $109,406 $228,101 $251,002 $214,897
---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets including
interest expense:
With fee waivers and/or expense reimbursements 2.41%(d) 2.53% 2.39% 2.23% 2.38% 2.40%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.59%(d) 2.57% 2.39% 2.23% 2.38% 2.40%
---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets excluding
interest expense:
With fee waivers and/or expense reimbursements 2.41%(d) 2.40% 2.39% 2.23% 2.34% 2.40%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.59%(d) 2.44% 2.39% 2.23% 2.34% 2.40%
---------------------------------------------------------------------------------------------------------------------------------
Ratio of interest expense to average net assets -- 0.13% -- -- 0.04% --
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net
assets 8.73%(d) 10.08% 10.62% 6.74% 8.87% 11.20%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 91% 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 deduct contingent deferred sales charges and is not
annualized for periods less than one year.
(d) Ratios are annualized and based on average net assets of $96,761,400.
14
<PAGE> 10
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C ADVISOR CLASS
-------------------------------- ----------------
MARCH 1, 1999
(DATE SALES
COMMENCED) NOVEMBER 1, 1999
SIX MONTHS ENDED TO TO
APRIL 30, OCTOBER 31, FEBRUARY 11,
2000(a) 1999 2000(a)
---------------- ------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 8.30 $ 7.96 $ 8.28
---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.38 0.53 0.24
---------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 0.54 0.37 0.63
---------------------------------------------------------------------------------------------
Net increase (decrease) from
investment operations 0.92 0.90 0.87
---------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.42) (0.56) (0.23)
---------------------------------------------------------------------------------------------
From net realized gain on investments -- -- --
---------------------------------------------------------------------------------------------
Return of capital -- -- --
---------------------------------------------------------------------------------------------
Total distributions (0.42) (0.56) (0.23)
---------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.80 $ 8.30 $ 8.92
---------------------------------------------------------------------------------------------
Total return(c) 11.23% 11.74% 10.80%
---------------------------------------------------------------------------------------------
Ratios and supplemental data:
Net assets, end of period (000s omitted) $ 398 $ 208 $ --
---------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
including interest expense:
With fee waivers and/or expense
reimbursements 2.41%(d) 2.53%(e) 1.41%(d)
---------------------------------------------------------------------------------------------
Without fee waivers and/or expense
reimbursements 2.59%(d) 2.57%(e) 1.59%(d)
---------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
excluding interest expense:
With fee waivers and/or expense
reimbursements 2.41%(d) 2.40%(e) 1.41%(d)
---------------------------------------------------------------------------------------------
Without fee waivers and/or expense
reimbursements 2.59%(d) 2.44%(e) 1.59%(d)
---------------------------------------------------------------------------------------------
Ratio of interest expense to average net
assets -- 0.13%(e) --
---------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 8.73%(d) 10.08%(e) 9.73%(d)
---------------------------------------------------------------------------------------------
Portfolio turnover rate 91% 336% 91%
---------------------------------------------------------------------------------------------
<CAPTION>
ADVISOR CLASS
-------------------------------------------------------
JUNE 1, 1995
(DATE SALES
COMMENCED)
YEAR ENDED OCTOBER 31, TO
------------------------------------ OCTOBER 31,
1999 1998(a) 1997(a) 1996(a) 1995
------ ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.83 $15.52 $14.83 $11.71 $11.44
----------------------------------------
Income from investment operations:
Net investment income 0.87 1.40(b) 1.22 1.34 0.57
----------------------------------------
Net realized and unrealized gain (loss)
on investments 0.54 (4.79) 0.93 3.05 0.17
----------------------------------------
Net increase (decrease) from
investment operations 1.41 (3.39) 2.15 4.39 0.74
----------------------------------------
Distributions to shareholders:
From net investment income (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 (0.96) (4.30) (1.46) (1.27) (0.47)
----------------------------------------
Net asset value, end of period $ 8.28 $ 7.83 $15.52 $14.83 $11.71
----------------------------------------
Total return(c) 18.87% (29.79)% 14.72% 39.38% 6.54%
----------------------------------------
Ratios and supplemental data:
Net assets, end of period (000s omitted) $1,396 $1,596 $3,719 $15,298 $1,463
----------------------------------------
Ratio of expenses to average net assets
including interest expense:
With fee waivers and/or expense
reimbursements 1.53% 1.39% 1.23% 1.38% 1.40%(e)
----------------------------------------
Without fee waivers and/or expense
reimbursements 1.57% 1.39% 1.23% 1.38% 1.40%(e)
----------------------------------------
Ratio of expenses to average net assets
excluding interest expense:
With fee waivers and/or expense
reimbursements 1.40% 1.39% 1.23% 1.34% 1.40%(e)
----------------------------------------
Without fee waivers and/or expense
reimbursements 1.44% 1.39% 1.23% 1.34% 1.40%(e)
----------------------------------------
Ratio of interest expense to average net
assets 0.13% -- -- 0.04% --
----------------------------------------
Ratio of net investment income to
average net assets 11.08% 11.62% 7.74% 9.87% 12.20%(e)
----------------------------------------
Portfolio turnover rate 336% 339% 214% 290% 213%()
----------------------------------------
</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 deduct contingent deferred sales charges and is not
annualized for periods less than one year.
(d) Ratios are annualized and based on average net assets of $313,852 and
$921,294 for Class C and Advisor Class, respectively.
(e) Annualized.
NOTE 9-SUBSEQUENT EVENT
The Board of Trustees of AIM Investment Funds unanimously approved on March 14,
2000, an Agreement and Plan of Reorganization (the "Reorganization") pursuant to
which the Fund would transfer substantially all of its assets to AIM Developing
Markets Fund. The Reorganization has been structured as a tax-free transaction.
In a Special Meeting of shareholders on May 31, 2000, the Reorganization was
approved to be effective prior to the open of business on June 18, 2000.
15
<PAGE> 11
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham SUB-ADVISOR
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President INVESCO Asset Management Ltd.
11 Devonshire Square
Ruth H. Quigley Carol F. Relihan London EC2M 4YR
Private Investor Vice President England
Mary J. Benson TRANSFER AGENT
Assistant Vice President and
Assistant Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Sheri Morris Houston, TX 77210-4739
Assistant Vice President and
Assistant Treasurer CUSTODIAN
Nancy L. Martin State Street Bank and Trust Company
Assistant Secretary 225 Franklin Street
Boston, MA 02110
Ofelia M. Mayo
Assistant Secretary COUNSEL TO THE FUND
Kathleen J. Pflueger Kirkpatrick & Lockhart LLP
Assistant Secretary 1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL TO THE TRUSTEES
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
</TABLE>
16
