<PAGE> 1
ANNUAL REPORT / OCTOBER 31 1999
AIM DEVELOPING MARKETS FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
MURAL FROM THE TEMPLE OF LONGING BY PAUL KLEE
PAUL KLEE'S ART WAS TRANSFORMED BY A TRIP HE TOOK TO TUNISIA
IN 1914, WHERE HE WAS AWED BY THE LANDSCAPE'S BEAUTIFULLY
INTENSE COLOR AND LIGHT. KLEE BROUGHT THESE QUALITIES TO HIS
OWN WORK, CREATING IMAGINATIVE, LIGHT-FILLED PAINTINGS
LIKE THE ONE ON THE COVER. RADIATING WITH OPTIMISM AND ENERGY, KLEE'S
MURAL IS A FITTING EMBLEM FOR THE DYNAMIC GROWTH PUSHING
TODAY'S EMERGING MARKETS INTO THE 21ST CENTURY.
-------------------------------------
AIM Developing Markets Fund is for shareholders who seek long-term growth of
capital and secondarily seek income. The fund primarily invests in developing
market equity securities, but may also invest in developing market debt
securities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Developing Markets Fund performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund's Class B and Class C shares will differ from
that of Class A shares due to differences in sales charge structure and
expenses.
o Because Class C shares have been offered for less than a year (since
3/1/99), all performance figures reflect cumulative total return that has
not been annualized.
o Advisor Class shares were closed to new investors on 3/1/99.
o The fund's average annual total returns, including sales charges, for the
periods ended 9/30/99, the most recent calendar quarter end, were as
follows: for Class A shares, one year, 28.76%; five years, -5.59%; inception
(1/11/94), -5.27%. For Class B shares, one year, 29.42%; inception
(11/3/97), -14.69%. For Class C shares, inception (3/1/99), 25.24%. For
Advisor Class shares, one year, 35.62%; inception (11/3/97), -12.11%.
o During the fiscal year ended 10/31/99, the fund paid distributions of
$0.1226 per Class A share, $0.0812 per Class B share and $0.1559 per
Advisor Class share.
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 unmanaged MSCI Emerging Markets Free Index is a group of securities from
emerging markets tracked by Morgan Stanley Capital International. A "free"
index includes only securities available to non-domestic investors.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the fund.
AIM DEVELOPING MARKETS FUND
<PAGE> 3
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 DEVELOPING MARKETS FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND POSTS IMPRESSIVE RETURNS AS EMERGING
MARKETS REBOUND
EMERGING MARKETS RECORDED SOLID GAINS FOR THE FISCAL YEAR. HOW DID AIM
DEVELOPING MARKETS FUND PERFORM?
The strong showing of emerging markets boosted the fund's performance for the
fiscal year ended October 31, 1999. Excluding sales charges, total returns for
Class A and B shares were 33.11% and 32.14%, respectively. Advisor Class shares
posted gains of 33.62%.
Class C shares began sales on March 1, 1999, and had a cumulative total
return of 31.06%, excluding sales charges, through the end of the fiscal year.
The fund had $207.7 million in total net assets at the close of the fiscal
year, up from $87.7 million at the beginning of the 12-month reporting period.
AIM Eastern Europe Fund was merged into AIM Developing Markets Fund on September
10, 1999, and AIM Emerging Markets Fund was merged into AIM Developing Markets
Fund on February 12, 1999.
HOW DID EMERGING MARKETS FARE FOR THE FISCAL YEAR?
Overall, the performance of emerging markets was very strong. Investors shifted
more of their assets into stocks in developing markets as global economic
conditions improved. Markets in Asia led the way as the region recovered
impressively from the severe economic crisis of 1997-1998.
o Asia's rebound was the product of strong economic growth, improving
corporate earnings and rising consumer demand. Restructuring also helped to
fuel Asia's comeback. Countries such as Malaysia, South Korea and Taiwan,
which exerted the most effort to revamp their banking systems and stabilize
their currencies, enjoyed excellent stock-market performance. Asian markets
also benefited from lower inflation and declining interest rates.
o Latin American markets, led by Mexico and Brazil, also posted impressive
gains for the fiscal year. Mexico benefited from falling interest rates, a
stronger peso and a vibrant economy in the United States, its chief trading
partner. After Brazil moved quickly to resolve its currency crisis in
January, its stock markets soared. Investors gravitated to Brazilian stocks
because of their attractive valuations and the earnings-growth potential of
certain Brazilian companies.
o Other emerging markets that performed well included Greece, Israel, South
Africa and Turkey. Rising gold prices have helped boost South African stocks
while Israeli companies that transact much of their business in the United
States benefited from the strong U.S. economy.
WHAT CHANGES HAVE YOU MADE TO THE PORTFOLIO?
Between our last report on April 30, 1999, and the end of the fiscal year, we
shifted the fund's geographic focus from Latin America to Asia. We increased the
fund's exposure to such markets as Malaysia, South Korea and Taiwan while
reducing its exposure to Brazil and Mexico.
As far as sectors are concerned, the fund's focus remained on the stocks of
financial, consumer-service and basic material companies. As of October 31,
financial stocks comprised about 37% of the portfolio compared to 30% six months
earlier. Mid-and large-cap stocks formed the majority of the fund's holdings.
As of October 31, the fund had 134 holdings, 12 more than at the time of our
last report.
WHAT MADE ASIAN MARKETS ATTRACTIVE?
Several Asian nations, including Taiwan, appeared poised to benefit from the
improving global economy. Demand for semiconductors and computer components
remained strong, a positive development for Taiwan. Analysts did not expect the
severe earthquake that hit the country in September to have a dramatic impact on
the country's exports or economic growth. We also liked Malaysia because its
stocks were favorably priced and its currency appeared to be under-valued. We
were more cautious about South Korea, despite the impressive gains of its stock
market. The restructuring of several key conglomerates in South Korea needed to
be completed for the country's economic recovery to remain on track, according
to several analysts.
FUND PERFORMANCE IMPROVES
Total return, excluding sales charges
================================================================================
Class A Shares
- --------------------------------------------------------------------------------
98/99 37.09%
97/98 -33.11%
Class B Shares
98/99 32.14%
97/98 -39.76%
Advisor Class Shares
98/99 33.62%
97/98 -42.63%
*Performance of Class B shares and Advisor Class Shares is from inception,
11/3/97-10/31/98
================================================================================
GROWTH OF NET ASSETS
in millions
10/31/98 $ 87.7
10/31/99 $207.3
See important fund and index disclosures inside front cover.
AIM DEVELOPING MARKETS FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 10/31/99, based on total net assets
<TABLE>
<CAPTION>
=========================================================================================================================
TOP 10 INDUSTRIES TOP 10 EQUITY HOLDINGS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Telefonos de Mexico S.A. de C.V. "L" - ADR (Mexico) 2.31 1. Telephone 10.46%
2. PT Lippo Bank TBK (Indonesia) 2.03 2. Investment Management 8.26
3. Pohang Iron & Steel Co. Ltd. ADR (South Korea) 1.98 3. Banks (Regional) 5.86
4. Hindustan Lever Ltd. (India) 1.88 4. Banks (Major Regional) 5.69
5. Petroleo Brasileiro S.A.-Petrobras-Pfd (Brazil) 1.68 5. Electric Companies 3.96
6. Fomento Economico Mexicano, S.A. de C.V. - ADR (Mexico) 1.67 6. Banks (Money Center) 3.83
7. Telebras-ADR (Brazil) 1.64 7. Iron & Steel 3.18
8. Telekom Malaysia Berhad (Malaysia) 1.57 8. Electronics (Component Distributors) 2.79
9. Matv Rt.-ADR (Hungary) 1.53 9. Automobiles 2.40
10. Mahindra & Mahindra Ltd. (India) 1.50 10. Manufacturing (Diversified) 2.34
=========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
TOP 10 COUNTRIES
- --------------------------------------------------------------------------------
<S> <C>
1. Taiwan 14.79%
2. South Korea 12.31
3. Mexico 10.51
4. Brazil 10.14
5. South Africa 8.98
6. Malaysia 6.61
7. India 6.21
8. Israel 3.60
9. Greece 3.32
10. Turkey 3.27
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
================================================================================
</TABLE>
WHERE WAS YOUR EMPHASIS IN LATIN AMERICA?
Our focus was on Brazil and Mexico, the two largest markets in the region. In
Brazil, we anticipated a significant increase in corporate earnings as the
nation's economy continued to recover. We expected economic growth in Mexico to
remain healthy. We found other Latin American markets much less attractive
because of conditions bordering on recession and a lack of liquidity.
WHAT MARKETS DID YOU LIKE IN EUROPE, AFRICA AND THE MIDDLE EAST?
We increased the fund's exposure to South Africa, where stock prices were
relatively inexpensive. The country is a large exporter of commodities and it
was expected to benefit from improving economic conditions worldwide. Despite
their stellar performance, Greek stocks appeared to be overvalued, considering
the tepid earnings growth of companies in that country.
WHAT WERE SOME OF THE STOCKS THAT YOU LIKED?
o Telefonos de Mexico (Telmex) is Mexico's top telephone-service provider. It
is extending its business into Arizona, California and Texas, where it sells
phones to U.S. customers to connect them with their families in Mexico.
o PT Lippo Bank has more than 350 branches in 110 cities in Indonesia. It
offers a full range of services to more than 2.1 million individual and
corporate customers.
o Pohang Iron & Steel (POSCO) of South Korea is the world's top steel
producer. The company makes hot and cold rolled steel products.
o Hindustan Lever, India's largest company in terms of market capitalization,
offers home and personal care products, foods and beverages.
o Fomento Economico Mexicano is one of the largest beverage producers in Latin
America. The company also owns a convenience store chain and produces
packaging materials.
o Petroleo Brasileiro (PETROBRAS), Brazil's largest industrial company, is
involved in the exploration, production, refining, purchasing and
transporting of oil and gas products.
o Telekom Malaysia provides telecommunications services to 4.2 million
subscribers.
WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
As 2000 approaches, we remain cautiously optimistic about emerging markets. If
global economic conditions continue to improve, we believe emerging markets will
become increasingly attractive to investors. Many emerging-markets stocks are
favorably priced in comparison to stocks in more developed markets. Moreover,
the economic fundamentals in many emerging markets are on firmer ground than
they were at the outset of the fiscal year. However, we expect emerging markets
to remain volatile as they tend to be more sensitive to socioeconomic and
political developments than more established markets.
See important fund and index disclosures inside front cover.
AIM DEVELOPING MARKETS FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM DEVELOPING MARKETS FUND VS. BENCHMARK INDEX
1/11/94-10/31/99
In thousands
================================================================================
AIM Developing
Markets Fund, MSCI Emerging
Class A Shares Markets Free Index
- --------------------------------------------------------------------------------
1/94 9613 10182
10/94 9194 10631
10/95 7664 8565
10/96 9581 9121
10/97 9092 8347
10/98 5720 5761
10/99 7614 8331
Past performance cannot guarantee comparable future results.
================================================================================
ABOUT THIS CHART
The chart compares your fund's Class A shares to a benchmark index. It is
intended to give you a general idea of how your fund performed compared to the
stock market over the period 1/11/94- 10/31/99. (Please note that index
performance is from 12/31/94-10/31/99). It is important to understand the
difference between your fund and an index. An index measures the performance of
a hypothetical portfolio, in this case the Morgan Stanley Capital International
(MSCI) Emerging Markets Free Index. An index is not managed, incurring no sales
charges, expenses or fees. If you could buy all the securities that make up a
particular index, you would incur expenses that would affect the return on your
investment.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/99, including sales charges
================================================================================
CLASS A SHARES
Inception (1/11/94) -4.59%
5 years -4.63
1 year 26.71
CLASS B SHARES
Inception (11/3/97) -12.52%
1 year 27.14
CLASS C SHARES
Inception (3/1/99) 30.06%*
* Cumulative total return that has not been annualized.
ADVISOR CLASS SHARES*
Inception (11/3/97) -9.92%
1 year 33.62*
* Advisor Class Shares were closed to new investors on March 1, 1999.
Source: Lipper, Inc.
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
For fund performance calculations and descriptions of indexes cited on this
page, please refer to the inside front cover. The performance of Class B and C
shares and Advisor Class shares will differ from that of Class A shares due to
differing fees and expenses.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
AIM DEVELOPING MARKETS FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
October 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-97.49%
ARGENTINA-0.95%
Banco de Galicia y Buenos Aires
S.A. de C.V.-ADR
(Banks-Regional) 62,236 $ 1,314,743
- --------------------------------------------------------------
Nortel Inversora S.A.-ADR
(Telephone) 43,400 656,425
- --------------------------------------------------------------
1,971,168
- --------------------------------------------------------------
AUSTRIA-0.26%
Julius Meinl International A.G.
(Retail-Food Chains) 44,854 537,951
- --------------------------------------------------------------
BRAZIL-10.14%
Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar-Pfd. GDR (Retail-Food
Chains) 55,700 1,218,437
- --------------------------------------------------------------
Companhia de Saneamento Basico do
Estado de Sao Paulo (Water
Utilities) 11,791,509 794,356
- --------------------------------------------------------------
Companhia de Tecidos Norte de
Minas (Textiles-Specialty) 7,836,000 553,980
- --------------------------------------------------------------
Companhia Energetica de Minas
Gerais-ADR (Electric Companies) 167,280 2,390,883
- --------------------------------------------------------------
Companhia Paranaense de Energia-
Copel-ADR (Electric Companies) 209,000 1,384,625
- --------------------------------------------------------------
Companhia Vale do Rio Doce-Pfd. A
(Iron & Steel) 124,700,000 2,478,029
- --------------------------------------------------------------
Eletropaulo
Metropolitana-Eletricidade de
Sao Paulo S.A. (Electric
Companies) 31,201,339 1,422,602
- --------------------------------------------------------------
Petroleo Brasileiro
S.A.-Petrobras-Pfd. (Oil &
Gas-Exploration & Production) 21,999,978 3,499,484
- --------------------------------------------------------------
Telebras-ADR (Telephone) 43,853 3,415,052
- --------------------------------------------------------------
Telecomunicacoes de Sao Paulo
S.A. (Telephone) 17,750,000 1,228,587
- --------------------------------------------------------------
Telecomunicacoes de Sao Paulo
S.A.-Pfd. (Telephone) 335,563 31,545
- --------------------------------------------------------------
Uniao de Bancos Brasileiros
S.A.-GDR (Banks-Regional) 76,816 1,776,370
- --------------------------------------------------------------
Unibanco-Uniao de Bancos
Brasileiros S.A. (Banks-Major
Regional)(a) 19,000,472 876,144
- --------------------------------------------------------------
21,070,094
- --------------------------------------------------------------
CHILE-0.99%
Compania Cervecerias Unidas
S.A.-ADR (Beverages-Alcoholic) 40,000 872,500
- --------------------------------------------------------------
Enersis S.A.-ADR (Electric
Companies) 52,596 1,183,410
- --------------------------------------------------------------
2,055,910
- --------------------------------------------------------------
CHINA-0.96%
Beijing Yanhua Petrochemical Co.
Ltd. (Chemical Diversified)(b) 11,026,000 1,987,153
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
EGYPT-1.11%
Al-Ahram Beverages Co. S.A.E.-GDR
(Beverages-Alcoholic) 163 $ 4,809
- --------------------------------------------------------------
Al-Ahram Beverages Co. S.A.E.-GDR
(Beverages-Alcoholic) (Acquired
06/10/97-08/07/97; Cost
$838,350)(c) 37,049 1,092,946
- --------------------------------------------------------------
Suez Cement Co.-GDR (Building
Materials) 71,830 1,203,153
- --------------------------------------------------------------
2,300,908
- --------------------------------------------------------------
GREECE-3.32%
Alpha Credit Bank
(Banks-Regional) 20,660 1,579,762
- --------------------------------------------------------------
Commercial Bank of Greece, S.A.
(Banks-Major Regional) 20,400 1,516,985
- --------------------------------------------------------------
Hellenic Telecommunication
Organization S.A.
(Telecommunication-Cellular/Wireless) 122,988 2,605,761
- --------------------------------------------------------------
National Bank of Greece S.A.
(Banks-Money Center) 16,708 1,197,725
- --------------------------------------------------------------
6,900,233
- --------------------------------------------------------------
HONG KONG-1.22%
China Everbright Ltd. (Land
Development) 3,535,500 2,525,975
- --------------------------------------------------------------
HUNGARY-2.77%
Matv Rt.-ADR (Telephone)(b) 110,000 3,169,375
- --------------------------------------------------------------
MOL Magyar Olaj-es Gazipari
Rt.-GDR (Oil- Domestic
Integrated) 128,000 2,540,800
- --------------------------------------------------------------
Pannonplast Rt. (Building
Materials)(b) 2,270 36,886
- --------------------------------------------------------------
Technoimpex (Services-Commercial
& Consumer)(b) 1,400 0
- --------------------------------------------------------------
5,747,061
- --------------------------------------------------------------
INDIA-6.21%
Associated Cement Co. Ltd.
(Construction-
Cement/Aggregates) 164 757
- --------------------------------------------------------------
BSES Ltd. (Electric Companies) 200 743
- --------------------------------------------------------------
Hindustan Lever Ltd. (Aluminum) 73,850 3,914,679
- --------------------------------------------------------------
Indian Hotels Co. Ltd.
(Lodging-Hotels) 50 423
- --------------------------------------------------------------
ITC Ltd. (Tobacco) 110,428 1,770,638
- --------------------------------------------------------------
KEC International Ltd. (Electric
Companies) 100 141
- --------------------------------------------------------------
Larsen & Toubro Ltd.
(Manufacturing- Diversified) 150,400 1,379,273
- --------------------------------------------------------------
Larsen & Tourbo Ltd.-GDR
(Manufacturing- Diversified) 65,900 1,430,030
- --------------------------------------------------------------
Mahanagar Telephone Nigam Ltd.
(Telephone) 142,100 561,067
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INDIA-(CONTINUED)
Mahindra & Mahindra Ltd.
(Automobiles)(b) 379,700 $ 3,109,499
- --------------------------------------------------------------
Ranbaxy Laboratories Ltd. (Health
Care- Drugs-Generic & Other) 200 4,008
- --------------------------------------------------------------
State Bank of India (Banks-Major
Regional) 4,650 26,565
- --------------------------------------------------------------
Tata Engineering and Locomotive
Co. Ltd. (Automobiles) 100 552
- --------------------------------------------------------------
Videsh Sanchar Nigam Ltd.
(Telecommunications-Cellular/Wireless) 44,600 712,485
- --------------------------------------------------------------
12,910,860
- --------------------------------------------------------------
INDONESIA-2.87%
PT Indah Kiat Pulp & Paper Corp.
TbK (Paper & Forest
Products)(b) 4,074,000 1,753,217
- --------------------------------------------------------------
PT Lippo Bank Tbk (Banks-Major
Regional)(b) 128,519,400 4,218,361
- --------------------------------------------------------------
5,971,578
- --------------------------------------------------------------
IRELAND-0.28%
Central Asia Growth Fund
(Investment Management)(b) 331,000 579,250
- --------------------------------------------------------------
ISRAEL-3.60%
Bank Leumi Le-Israel (Banks-Money
Center) 1,180,113 2,082,201
- --------------------------------------------------------------
Blue Square Chain Investments and
Properties Ltd. (Retail-Food
Chains) 78,589 1,079,313
- --------------------------------------------------------------
Blue Square-Israel Ltd.-ADR
(Retail-Food Chains) 78,100 1,020,181
- --------------------------------------------------------------
Discount Investment Corp.
(Investment Banking/Brokerage) 40,500 1,544,611
- --------------------------------------------------------------
Internet Gold-Golden Lines
(Computers-Software &
Services)(b) 74,861 561,458
- --------------------------------------------------------------
Jacada Ltd. (Computers-Software &
Services)(b) 81,687 1,184,462
- --------------------------------------------------------------
Makhteshim-Agan Industries Ltd.
(Investment Management)(b) 1 2
- --------------------------------------------------------------
7,472,228
- --------------------------------------------------------------
LITHUANIA-0.15%
Vilniaus Bankas A.B.-GDR
(Banks-Regional) 54,591 313,898
- --------------------------------------------------------------
MALAYSIA-6.61%
Berjaya Sports Toto Berhad
(Leisure Time- Products) 1,157,000 2,511,908
- --------------------------------------------------------------
Commerce Asset-Holdings Berhad
(Finance- Asset Management)(b) 1,393,000 3,079,263
- --------------------------------------------------------------
Public Finance Berhad
(Banks-Regional) 1,034,000 1,110,189
- --------------------------------------------------------------
Resorts World Berhad
(Lodging-Hotels) 776,000 2,225,895
- --------------------------------------------------------------
RHB Capital Berhad (Banks-Major
Regional) 480,000 432,000
- --------------------------------------------------------------
Rothmans of Pall Mall (Malaysia)
Berhad (Tobacco)(b) 159,000 1,108,816
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MALAYSIA-(CONTINUED)
Telekom Malaysia Berhad
(Telephone) 1,059,000 $ 3,260,605
- --------------------------------------------------------------
13,728,676
- --------------------------------------------------------------
MEXICO-10.51%
Alpha S.A. de C.V.-Class A
(Manufacturing- Diversified) 121,000 464,368
- --------------------------------------------------------------
Cemex S.A. de C.V.
(Construction-Cement &
Aggregates) 570,392 2,580,557
- --------------------------------------------------------------
Cifra S.A. de C.V.
(Retail-General Merchandise)(b) 1,156,392 1,818,476
- --------------------------------------------------------------
Consorcio Ara, S.A. de C.V.
(Homebuilding)(b) 1,182,600 1,330,809
- --------------------------------------------------------------
Corporacion GEO S.A. de
C.V.-Series B
(Construction-Cement &
Aggregates)(b) 380,400 965,342
- --------------------------------------------------------------
Fomento Economico Mexicano, S.A.
de C.V.-ADR
(Beverages-Alcoholic) 105,474 3,460,866
- --------------------------------------------------------------
Grupo Bimbo S.A. de C.V.
(Foods)(b) 655,700 1,202,969
- --------------------------------------------------------------
Grupo Financiero Bancomer, S.A.
de C.V.-Class O
(Banks-Regional)(b) 5,275,388 1,399,089
- --------------------------------------------------------------
Grupo Televisa S.A.-GDR
(Entertainment)(b) 50,699 2,154,708
- --------------------------------------------------------------
Telefonos de Mexico S.A.-ADR
(Telephone) 56,062 4,793,301
- --------------------------------------------------------------
Tubos de Acero de Mexico S.A.-ADR
(Oil & Gas-Drilling &
Equipment) 152,088 1,663,463
- --------------------------------------------------------------
21,833,948
- --------------------------------------------------------------
PAKISTAN-0.00%
Dewan Salman Fibre Ltd.
(Chemicals-Specialty)(b) 4 2
- --------------------------------------------------------------
Pakistan State Oil Co. Ltd.
(Oil-International Integrated) 78 207
- --------------------------------------------------------------
209
- --------------------------------------------------------------
PHILIPPINES-1.63%
Far East Bank & Trust Co.
(Banks-Regional) 531,663 908,202
- --------------------------------------------------------------
Manila Electric Co. (Electric
Power) 409,290 1,122,741
- --------------------------------------------------------------
Philippine Long Distance
Telephone Co.-ADR (Telephone) 66,500 1,367,406
- --------------------------------------------------------------
3,398,349
- --------------------------------------------------------------
POLAND-1.98%
Bank Handlowy w Warszawie
(Banks-Major Regional)(b) 70,000 987,084
- --------------------------------------------------------------
Bank Handlowy w Warszawie-GDR
(Banks-Major Regional) 2,590 37,057
- --------------------------------------------------------------
BRE Bank S.A. (Banks-Major
Regional) 31,295 852,927
- --------------------------------------------------------------
Elektrim Spolka Akcyjna S.A.
(Electrical Equipment)(b) 117,144 1,013,332
- --------------------------------------------------------------
Telekomunikacja Polska S.A.-GDR
(Telephone)(b) 242,000 1,216,050
- --------------------------------------------------------------
4,106,450
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RUSSIA-1.27%
Nizhnekamsknefte Khim (Chemicals-
Diversified)(b) 100,000 $ 67,000
- --------------------------------------------------------------
Russian Telecommunications
Development Corp.-Non-Voting
(Telecommunications-
Cellular-Wireless)(b) 52,600 1
- --------------------------------------------------------------
Russian Telecommunications
Development Corp.-Voting
(Telecommunications-
Cellular-Wireless)(b) 38,400 0
- --------------------------------------------------------------
Surgutneftegaz-ADR
(Oil-International Integrated) 307,930 2,563,517
- --------------------------------------------------------------
2,630,518
- --------------------------------------------------------------
SOUTH AFRICA-8.98%
Anglo American Platinum Corp.
Ltd. (Metals Mining) 105,000 3,025,641
- --------------------------------------------------------------
Anglo American PLC (Metals
Mining) 39,600 2,108,132
- --------------------------------------------------------------
Barlow Ltd.
(Manufacturing-Diversified) 327,200 1,595,383
- --------------------------------------------------------------
FirstRand Ltd. (Banks-Regional) 1,643,600 1,899,806
- --------------------------------------------------------------
Liberty Life Association of
Africa Ltd. (Insurance Brokers) 122,624 1,137,903
- --------------------------------------------------------------
Rembrandt Group Ltd. (Investment
Management) 294,270 2,201,336
- --------------------------------------------------------------
Sanlam Ltd.
(Insurance-Life/Health) 1,798,960 2,064,740
- --------------------------------------------------------------
Sappi Ltd. (Paper & Forest
Products) 305,000 2,527,391
- --------------------------------------------------------------
South African Breweries PLC
(Beverages- Alcoholic) 210,538 1,844,028
- --------------------------------------------------------------
Standard Bank Investment Corp.
Ltd. (Banks-Major Regional)(b) 75,550 258,291
- --------------------------------------------------------------
18,662,651
- --------------------------------------------------------------
SOUTH KOREA-12.31%
Housing & Commercial Bank-GDR
(Banks-Major Regional)(b) 37,500 991,039
- --------------------------------------------------------------
Kia Motors Corp. (Automobiles)(b) 180,900 1,809,754
- --------------------------------------------------------------
Kia Motors Corp.-Rts., expiring
11/09/99 (Automobiles)(b) 30,898 69,549
- --------------------------------------------------------------
Korea Electric Power Corp.-ADR
(Electric Companies) 116,847 1,840,340
- --------------------------------------------------------------
Korea Telecom Corp.-ADR
(Telephone)(b) 57,450 2,025,113
- --------------------------------------------------------------
Merrill Lynch International & Co.
KOSPI 200-Wts., expiring
09/14/00 (Investment Banking) 1,582,230 13,101,814
- --------------------------------------------------------------
Pohang Iron & Steel Co. Ltd.-ADR
(Iron & Steel) 123,540 4,123,148
- --------------------------------------------------------------
Shinhan Bank-GDR (Banks-Major
Regional)(b) 75,747 1,619,092
- --------------------------------------------------------------
25,579,849
- --------------------------------------------------------------
TAIWAN-14.79%
ABN AMRO Bank N.V.-EPN, expiring
04/28/00 (Investment
Management)(b)(d) 465 5,184,285
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TAIWAN-(CONTINUED)
ABN AMRO Bank N.V.-EPN, expiring
09/28/00 (Investment
Management)(b)(d) 600 $ 5,692,200
- --------------------------------------------------------------
Asian Petro Equity Linke (Oil &
Gas-Refining & Marketing)(b) 361 2,623,835
- --------------------------------------------------------------
Austek Computer, Inc. (Computers-
Hardware)(b) 773 10,924
- --------------------------------------------------------------
Cathay Life Insurance Co., Ltd.
(Insurance Brokers) 200,000 517,024
- --------------------------------------------------------------
China Development Industrial Bank
(Investment Management)(b) 937,438 1,391,971
- --------------------------------------------------------------
China Steel Corp. (Metals Mining) 3,172,000 2,440,000
- --------------------------------------------------------------
Compeq Manufacturing Co., Ltd.
(Computers-Hardware) 297,700 1,520,410
- --------------------------------------------------------------
Delta Electronics, Inc.
(Electronics-Component
Distributors) 267,480 1,117,311
- --------------------------------------------------------------
Hon Hai Precision Industry Co.,
Ltd. (Electronics-Component
Distributors)(b) 355,544 2,432,316
- --------------------------------------------------------------
Hon Hai Precision Industry Co.,
Ltd.-GDR (Electronics-Component
Distributors)(b) 46,413 753,051
- --------------------------------------------------------------
Nan Ya Plastic Corp.
(Chemicals-Specialty) 1 1
- --------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd.
(Electronics-Semiconductors)(b) 300,000 1,333,544
- --------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd.-ADR
(Electronics-Semiconductors) 80,000 2,770,000
- --------------------------------------------------------------
United Microelectronics Corp.
Ltd. (Electronics-Component
Distributors)(b) 578,000 1,503,310
- --------------------------------------------------------------
Yang Ming Marine Transport
(Shipping)(b) 2,571,000 1,434,637
- --------------------------------------------------------------
30,724,819
- --------------------------------------------------------------
THAILAND-0.90%
Siam Commercial Bank PLC
(Banks-Regional)(b) 303,850 330,571
- --------------------------------------------------------------
Siam Commercial Bank PLC-Pfd.
(Banks-Regional)(b) 972,442 1,102,042
- --------------------------------------------------------------
Siam Commercial Bank-Wts.,
expiring 05/10/02
(Banks-Regional)(b) 1,248,542 436,093
- --------------------------------------------------------------
1,868,706
- --------------------------------------------------------------
TURKEY-3.27%
Haci Omer Sabanci Holding A.S.
(Investment Management) 71,501,500 2,119,301
- --------------------------------------------------------------
Turkiye Is Bankasi (Isbank)
(Banks-Money Center) 85,258,247 1,684,700
- --------------------------------------------------------------
Yapi ve Kredi Bankasi A.S.
(Banks-Money Center) 205,904,400 2,997,963
- --------------------------------------------------------------
6,801,964
- --------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
VENEZUELA-0.41%
Cia. Anonima Nacional Telefonos
de Venezuela-ADR
(Telecommunications- Long
Distance) 32,900 $ 849,231
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$205,590,442) 202,529,637
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. DOLLAR DENOMINATED
NON-CONVERTIBLE BONDS &
NOTES-0.00%
SOVEREIGN DEBT-0.00%
Bank of Foreign Economic Affairs
(Vnesheconombank) (Russia),
Interest in Arrears Notes,
5.968%, 12/15/15 (Cost
$7,777)(e)(f) $ 45,784 5,322
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-1.74%
STIC Liquid Assets Portfolio(g) 1,806,852 $ 1,806,852
- --------------------------------------------------------------
STIC Prime Portfolio(g) 1,806,852 1,806,852
- --------------------------------------------------------------
Total Money Market Funds
(Cost $3,613,704) 3,613,704
- --------------------------------------------------------------
TOTAL INVESTMENTS-99.23% 206,148,663
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.77% 1,599,357
- --------------------------------------------------------------
NET ASSETS-100.00% $207,748,020
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
EPN - Equity Participation Notes
GDR - Global Depositary Receipt
Pfd. - Preferred
Rts. - Rights
Wts. - Warrants
Notes to Schedule of Investments:
(a) Each unit represents one preferred share of Unibanco and one preferred "B"
share of Unibanco Holdings.
(b) Non-income producing security.
(c) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 10/31/99 was $1,092,945 which
represented 0.53% of the Fund's net assets.
(d) Equity participation notes on basket of Taiwan stocks.
(e) The coupon rate shown in floating rate note represents the rate at period
end.
(f) Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(g) The security shares the same investment advisor as the Fund.
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $209,211,923) $206,148,663
- ------------------------------------------------------------
Foreign currencies, at value (cost $2,528,014) 2,503,509
- ------------------------------------------------------------
Receivables for:
Investments sold 570,570
- ------------------------------------------------------------
Fund shares sold 699,871
- ------------------------------------------------------------
Dividends and interest 799,063
- ------------------------------------------------------------
Total assets 210,721,676
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,384,045
- ------------------------------------------------------------
Fund shares reacquired 946,210
- ------------------------------------------------------------
Amount due to custodian bank 3,446
- ------------------------------------------------------------
Accrued advisory fees 173,001
- ------------------------------------------------------------
Accrued distribution fees 135,524
- ------------------------------------------------------------
Accrued accounting services fees 4,201
- ------------------------------------------------------------
Accrued transfer agent fees 127,021
- ------------------------------------------------------------
Accrued trustees' fees 4,882
- ------------------------------------------------------------
Accrued operating expenses 195,326
- ------------------------------------------------------------
Total liabilities 2,973,656
- ------------------------------------------------------------
Net assets applicable to shares outstanding $207,748,020
============================================================
NET ASSETS:
Class A $157,197,964
============================================================
Class B $ 49,723,202
============================================================
Class C $ 411,826
============================================================
Advisor Class $ 415,028
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 15,944,507
============================================================
Class B 5,079,702
============================================================
Class C 42,079
============================================================
Advisor Class 42,020
============================================================
Class A:
Net asset value and redemption price per
share $ 9.86
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $9.86 divided by
95.25%) $ 10.35
============================================================
Class B:
Net asset value and offering price per share $ 9.79
============================================================
Class C:
Net asset value and offering price per share $ 9.79
============================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 9.88
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $294,405 foreign withholding
tax) $ 3,536,471
- ------------------------------------------------------------
Interest 452,845
- ------------------------------------------------------------
Securities lending 141,802
- ------------------------------------------------------------
Total investment income 4,131,118
- ------------------------------------------------------------
EXPENSES:
Advisory and administrative fees 1,560,741
- ------------------------------------------------------------
Accounting services fees 42,462
- ------------------------------------------------------------
Custodian fees 152,242
- ------------------------------------------------------------
Distribution fees -- Class A 439,522
- ------------------------------------------------------------
Distribution fees -- Class B 357,273
- ------------------------------------------------------------
Distribution fees -- Class C 1,425
- ------------------------------------------------------------
Transfer agent fees -- Class A 654,830
- ------------------------------------------------------------
Transfer agent fees -- Class B 189,040
- ------------------------------------------------------------
Transfer agent fees -- Class C 754
- ------------------------------------------------------------
Transfer agent fees -- Advisor Class 2,367
- ------------------------------------------------------------
Interest (Note 4) 18,797
- ------------------------------------------------------------
Printing fees 335,170
- ------------------------------------------------------------
Other 265,876
- ------------------------------------------------------------
Total expenses 4,020,499
- ------------------------------------------------------------
Less: Expenses paid indirectly (9,544)
- ------------------------------------------------------------
Fees waived by advisor (747,433)
- ------------------------------------------------------------
Net expenses 3,263,522
- ------------------------------------------------------------
Net investment income 867,596
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES
Net realized gain (loss) from:
Investment securities 3,287,085
- ------------------------------------------------------------
Foreign currencies (466,771)
- ------------------------------------------------------------
2,820,314
- ------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 23,953,037
- ------------------------------------------------------------
Foreign currencies (65,862)
- ------------------------------------------------------------
23,887,175
- ------------------------------------------------------------
Net gain from investment securities and
foreign currencies 26,707,489
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $27,575,085
============================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
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 $ 867,596 $ 6,869,096
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies 2,820,314 (83,359,123)
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 23,887,175 13,741,429
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 27,575,085 (62,748,598)
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A (1,347,785) (11,841,080)
- --------------------------------------------------------------------------------------------
Class B (1,895) (1,499)
- --------------------------------------------------------------------------------------------
Advisor Class (510) (46)
- --------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Class A 46,116,184 (295,354,688)
- --------------------------------------------------------------------------------------------
Class B 46,956,910 226,865
- --------------------------------------------------------------------------------------------
Class C 409,272 --
- --------------------------------------------------------------------------------------------
Advisor Class 340,305 40,312
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 120,047,566 (369,678,734)
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 87,700,454 457,379,188
- --------------------------------------------------------------------------------------------
End of period $ 207,748,020 $ 87,700,454
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 462,286,688 $ 250,014,000
- --------------------------------------------------------------------------------------------
Undistributed net investment income 601,051 1,105,906
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (252,000,704) (136,393,263)
- --------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities and foreign currencies (3,139,015) (27,026,189)
- --------------------------------------------------------------------------------------------
$ 207,748,020 $ 87,700,454
============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Developing Markets Fund (the "Fund") is a separate series of AIM Investment
Funds (the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended (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 long-term growth of capital and its
secondary objective is income, to the extent consistent with seeking growth of
capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities 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 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
10
<PAGE> 13
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 is recorded on the
ex-dividend date. The Fund may elect to use a portion of the proceeds of fund
share redemptions as distributions for Federal income tax purposes.
Distributions from income and 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 by
$22,262, undistributed net realized losses increased by $118,427,755 and
paid-in capital increased by $118,450,017 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 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 $251,405,753 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. 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.
E. 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 Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
F. 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.
G. Foreign Securities--There are certain additional considerations and risks
associated with investing in foreign securities and currency transactions
that are not inherent in investments of domestic origin. The Fund's
investment in emerging market countries may involve greater risks than
investments in more developed markets and the price of such investments may
be volatile. These risks of investing in foreign and emerging markets may
include foreign currency exchange fluctuations, perceived credit risk,
adverse political and economic developments and possible adverse foreign
government intervention.
H. Indexed Securities--The Fund may invest in indexed securities whose value
is linked either directly or indirectly to changes in foreign currencies,
interest rates, equities, indices, or other reference instruments. Indexed
securities may be more volatile than the reference instrument itself, but any
loss is limited to the amount of the original investment.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
INVESCO Asset Management Limited is the Fund's sub-advisor and
sub-administrator. The Fund pays AIM investment management and administration
fees at an annual rate of 0.975% on the first $500 million of the Fund's average
daily net assets, plus 0.95% on the next $500 million of the Fund's average
daily net assets, plus 0.925% on the next $500 million of the Fund's average
daily net assets, plus 0.90% on the Fund's average daily net assets exceeding
$1.5 billion. AIM has contractually agreed to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the maximum annual rate of 2.00%, 2.50%, 2.50% and 1.50% of the average daily
net assets of the Fund's Class A, Class B, Class C and Advisor Class shares,
respectively. During the year ended October 31, 1999, the AIM waived fees of
$747,433.
11
<PAGE> 14
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. Prior to July 1, 1999, AIM was the
pricing and accounting agent for the Fund. 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
such fund based on its relative average daily net assets. For the year ended
October 31, 1999, AIM was paid $42,462 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 $686,201 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 0.50% 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 $439,522, $357,273 and $1,425, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $16,209 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 $6,877 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 $9,544 under expense offset arrangements. The effect of the
above arrangements resulted in a reduction of the Fund's total expenses of
$9,544 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 $337,903 with a weighted average interest rate of
5.33%. Interest expense for the Fund for the year ended October 31, 1999 was
$18,797.
NOTE 5-PORTFOLIO SECURITIES LOANED
At October 31, 1999, securities with an aggregate value of $17,226,481 were on
loan to brokers. The loans were secured by cash collateral of $17,571,010
received by the Fund. For the year ended October 31, 1999, the Fund received
fees of $141,802 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 Fund during the year ended October 31, 1999 was
$280,768,924 and $191,097,959, 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 $ 26,747,536
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (37,735,639)
- ---------------------------------------------------------
Net unrealized depreciation of investment
securities $(10,988,103)
=========================================================
Cost of investments for tax purposes is $217,136,766.
</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 3,932,389 $ 45,584,475 486,628 $ 5,011,027
- ---------------------------------------------------------------------------------------------------------------------
Class B 911,202 18,260,670 30,654 314,666
- ---------------------------------------------------------------------------------------------------------------------
Class C* 68,223 667,879 -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class 67,714 758,300 4,782 49,262
- ---------------------------------------------------------------------------------------------------------------------
Issued in connection with acquisition:**
Class A 9,961,789 87,235,238 -- --
- ---------------------------------------------------------------------------------------------------------------------
Class B 5,660,631 42,680,510 -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class 64,652 488,221 -- --
- ---------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 125,865 932,660 676,257 8,203,222
- ---------------------------------------------------------------------------------------------------------------------
Class B 255 1,881 124 1,499
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class 69 510 4 46
- ---------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (9,691,690) (87,636,190)+ (25,963,398) (308,568,937)
- ---------------------------------------------------------------------------------------------------------------------
Class B (1,512,951) (13,986,150) (10,213) (89,300)
- ---------------------------------------------------------------------------------------------------------------------
Class C* (26,144) (258,606) -- --
- ---------------------------------------------------------------------------------------------------------------------
Advisor Class (94,292) (906,727) (909) (8,996)
- ---------------------------------------------------------------------------------------------------------------------
9,467,712 $ 93,822,671 (24,776,071) $(295,087,511)
=====================================================================================================================
</TABLE>
* Class C shares commenced sales on March 1, 1999.
** AIM Emerging Markets Fund ("Emerging Markets Fund") and AIM Eastern Europe
Fund ("Eastern Europe Fund") transferred all of their assets to the Fund on
February 12, 1999 and September 10, 1999, respectively, pursuant to a plan of
reorganization and termination. The Fund assumed all of the liabilities of the
Emerging Markets Fund and the Eastern Europe Fund. Shareholders of the Emerging
Markets Fund and Eastern Europe Fund were issued full and fractional shares of
the applicable class of the Fund. The acquisitions, which were approved by the
shareholders of Emerging Markets Fund and Eastern Europe Fund on February 10,
1999 and August 25, 1999, respectively, were accomplished by an exchange of
10,912,463 shares of the Fund for the 11,087,719 shares then outstanding of the
Emerging Markets Fund and 4,774,609 shares of the Fund for the 5,864,782 shares
then outstanding of the Eastern Europe Fund. Based on the opinion of the Fund
counsel, the reorganization qualified as a tax-free reorganization for federal
income tax purposes with no gain or loss recognized to the Fund or its
shareholders. Emerging Markets Fund's and Eastern Europe Fund's net assets,
including ($18,098,264) and ($1,068,554), respectively, of unrealized
depreciation were combined with the Fund for total net assets after the
acquisition of $159,666,366 and $238,151,276, respectively.
+ This amount includes $370,669 of redemption fees associated with merger of
Eastern Europe.
13
<PAGE> 16
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 YEAR TEN MONTHS YEAR ENDED
ENDED ENDED ENDED DECEMBER 31, JANUARY 11, 1994
OCTOBER 31, OCTOBER 31, OCTOBER 31, ------------------- TO DECEMBER 31,
1999(a) 1998(a) 1997(b) 1996 1995 1994
--------- ---------- ----------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period 7.53 $ 12.56 $ 13.84 $ 11.60 $ 12.44 $ 15.00
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Income from investment operations:
Net investment income 0.06 0.39(c)(d) 0.25 0.53 0.72 0.35
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Net realized and unrealized gain (loss) on
investments 2.36 (5.10) (1.53) 2.19 (0.84) (2.46)
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Net increase (decrease) from investment
operations 2.42 (4.71) (1.28) 2.72 (0.12) (2.11)
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Redemption fees retained 0.03 0.28 -- -- -- --
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Distributions to shareholders:
From net investment income (0.12) (0.60) -- (0.48) (0.72) (0.35)
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
From net realized gain on investments -- -- -- -- -- (0.10)
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Total distributions (0.12) (0.60) -- (0.48) (0.72) (0.45)
- --------------------------------------------- -------- --------- ---------- --------- --------- --------
Net asset value, end of period 9.86 $ 7.53 $ 12.56 $ 13.84 $ 11.60 $ 12.44
============================================= ======== ========= ========== ========= ========= ========
Total return(e) 33.11% (37.09)% (9.25)% 23.59% (0.95)% (14.07)%
============================================= ======== ========= ========== ========= ========= ========
Ratios and supplemental data:
Net assets, end of period (in 000's) 157,198 $ 87,517 $ 457,379 $ 504,012 $ 422,348 $ 452,872
============================================= ======== ========= ========== ========= ========= ========
Ratio of net investment income to average net
assets:
With fee waivers 0.68%(f) 3.84 2.03%(g) 4.07% 6.33% 2.75%(g)
============================================= ======== ========= ========== ========= ========= ========
Without fee waivers 0.21%(f) 3.43% 1.95%(g) 4.04% 6.30% 2.75%(g)
============================================= ======== ========= ========== ========= ========= ========
Ratio of expenses to average net assets
excluding interest expense:
With fee waivers 1.90%(f) 1.73% 1.75%(g) 1.82% 1.77% 2.01%(g)
============================================= ======== ========= ========== ========= ========= ========
Without fee waivers 2.37%(f) 2.14% 1.83%(g) 1.85% 1.80% 2.01%(g)
============================================= ======== ========= ========== ========= ========= ========
Ratio of interest expense to average net
assets (Note 5) 0.01% 0.20% N/A N/A N/A N/A
============================================= ======== ========= ========== ========= ========= ========
Portfolio turnover rate 125% 111% 184%(g) 138% 75% 56%(g)
============================================= ======== ========= ========== ========= ========= ========
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Prior to November 1, 1997 the Fund was known as G.T. Developing Markets
Fund, Inc. All capital shares issued and outstanding on October 31, 1997
were reclassified as Class A shares.
(c) Before reimbursement the net investment income per share would have been
reduced by $0.04.
(d) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(e) Total return does not include sales charges and is not annualized for
periods less than one year.
(f) Ratios are based on average net assets of $123,758,642.
(g) Annualized.
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>
CLASS B CLASS C ADVISOR CLASS
----------------------- -------------- --------------------
YEAR YEAR MARCH 1, YEAR ENDED
ENDED ENDED 1999 OCTOBER 31,
OCTOBER 31, OCTOBER 31, TO OCTOBER 31, --------------------
1999(a) 1998(a) 1999(a) 1999(a) 1998(a)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.49 $ 12.56 $ 7.47 $ 7.55 $ 12.56
- ---------------------------------------------------------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) 0.01 0.31(b)(c) -- 0.10 0.40(b)(c)
- ---------------------------------------------------------- ------- ------- ------- ------- -------
Net realized and unrealized gain (loss) on investments 2.37 (5.07) 2.32 2.39 (5.09)
- ---------------------------------------------------------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations 2.38 (4.76) 2.32 2.49 (4.69)
- ---------------------------------------------------------- ------- ------- ------- ------- -------
Redemption fees retained -- 0.28 -- -- 0.28
- ---------------------------------------------------------- ------- ------- ------- ------- -------
Distributions to shareholders:
From net investment income (0.08) (0.59) -- (0.16) (0.60)
- ---------------------------------------------------------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.79 $ 7.49 $ 9.79 $ 9.88 $ 7.55
========================================================== ======= ======= ======= ======= =======
Total return (based on net asset value)(d) 32.14% (39.76)% 31.06% 33.62% (42.63)%
========================================================== ======= ======= ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in 000's) $49,723 $ 154 $ 412 $ 415 $ 29
========================================================== ======= ======= ======= ======= =======
Ratio of net investment income (loss) to average net
assets:
With fee waivers 0.08%(e) 3.09% 0.08%(f) 1.07%(e) 4.09%
========================================================== ======= ======= ======= ======= =======
Without fee waivers (0.39)%(e) 2.68% (0.39)%(f) 0.60%(e) 3.68%
========================================================== ======= ======= ======= ======= =======
Ratio of expenses to average net assets excluding interest
expense:
With fee waivers 2.50%(e) 2.48% 2.50%(f) 1.51%(e) 1.48%
========================================================== ======= ======= ======= ======= =======
Without fee waivers 2.97%(e) 2.89% 2.97%(f) 1.98%(e) 1.89%
========================================================== ======= ======= ======= ======= =======
Ratio of interest expense to average net assets (Note 5) 0.01% 0.20% 0.01% 0.01% 0.20%
========================================================== ======= ======= ======= ======= =======
Portfolio turnover rate 125% 111% 125% 125% 111%
========================================================== ======= ======= ======= ======= =======
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Before reimbursement the net investment income per share would have been
reduced by $0.04.
(c) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(d) Total return does not include sales charges and is not annualized for
periods less than one year.
(e) Ratios are based on average net assets of $35,727,260 and $447,433 for
Class B and Advisor Class, respectively.
(f) Ratios are annualized and based on average net assets of $208,934.
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 Developing Markets 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 Developing Markets 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
therein, in conformity with generally accepted accounting
principles. These financial statements and financial
highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion
on these financial statements based on our audits. We
conducted our audits of these financial statements in
accordance with generally accepted auditing standards
which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our
audits, which included confirmation of securities at
October 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion
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 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
AUDITORS
PricewaterhouseCoopers LLP
160 Federal St.
Boston, MA 02110
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION--UNAUDITED
AIM Developing Markets Fund paid ordinary dividends in the amount of $0.1226,
$0.0812, and $0.1559 per share to Class A, Class B and Advisor Class
shareholders, respectively during its tax year ended October 31, 1999. Of this
amount, 0.31% is eligible for the dividends received deduction for corporations.
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund(1) AIM Advisor International Value Fund leadership in the mutual-fund industry
AIM Blue Chip Fund AIM Asian Growth Fund since 1976 and managed approximately $120
AIM Capital Development Fund AIM Developing Markets Fund billion in assets for more than 6.4
AIM Constellation Fund AIM Euroland Growth Fund(4) million shareholders, including
AIM Dent Demographic Trends Fund AIM European Development Fund individual investors, corporate clients
AIM Large Cap Growth Fund AIM International Equity Fund and financial institutions, as of
AIM Mid Cap Equity Fund AIM Japan Growth Fund September 30, 1999.
AIM Mid Cap Growth Fund AIM Latin American Growth Fund The AIM Family of Funds--Registered
AIM Mid Cap Opportunities Fund AIM New Pacific Growth Fund Trademark-- is distributed nationwide,
AIM Select Growth Fund and AIM today is the 10th-largest mutual
AIM Small Cap Growth Fund(2) GLOBAL GROWTH FUNDS fund complex in the United States in
AIM Small Cap Opportunities Fund(3) AIM Global Aggressive Growth Fund assets under management, according to
AIM Value Fund AIM Global Growth Fund Strategic Insight, an independent mutual
AIM Weingarten Fund fund monitor.
GLOBAL GROWTH & INCOME FUNDS
GROWTH & INCOME FUNDS AIM Global Growth & Income Fund
AIM Advisor Flex Fund AIM Global Utilities Fund
AIM Advisor Large Cap Value Fund
AIM Advisor Real Estate Fund GLOBAL INCOME FUNDS
AIM Balanced Fund AIM Emerging Markets Debt Fund
AIM Basic Value Fund AIM Global Government Income Fund
AIM Charter Fund AIM Global Income Fund
AIM Strategic Income Fund
INCOME FUNDS
AIM Floating Rate Fund THEME FUNDS
AIM High Yield Fund AIM Global Consumer Products and Services Fund
AIM High Yield Fund II AIM Global Financial Services Fund
AIM Income Fund AIM Global Health Care Fund
AIM Intermediate Government Fund AIM Global Infrastructure Fund
AIM Limited Maturity Treasury Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(5)
TAX-FREE INCOME FUNDS AIM Global Trends Fund(6)
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
</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. DVM-AR-1
