<PAGE> 1
ANNUAL REPORT / OCTOBER 31 1999
AIM GLOBAL TELECOMMUNICATIONS
AND TECHNOLOGY FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
ACCENT IN PINK BY WASSILY KANDINSKY
BOTH AS AN ARTIST AND AS A THEORIST, KANDINSKY PLAYED A PIVOTAL
ROLE IN THE DEVELOPMENT OF ABSTRACT ART. HIS EXPLORATION OF
THE POSSIBILITIES OF ABSTRACTION MADE HIM ONE OF THE MOST
IMPORTANT INNOVATORS IN MODERN ART. MANY OF THE COMPANIES IN
WHICH THIS FUND INVESTS ARE ON THE CUTTING EDGE OF TELECOMMUNICATIONS
AND TECHNOLOGY, MAKING THEM INNOVATORS AS WELL.
-------------------------------------
AIM Global Telecommunications and Technology Fund is for shareholders seeking
long-term growth of capital by investing primarily in equity securities of
companies throughout the world engaged in the development, manufacture or sale
of telecommunications and technology services or equipment.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Telecommunications and Technology Fund (formerly AIM Global
Telecommunications Fund) performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value.
o During the fiscal year ended 10/31/99, the fund paid distributions of
$0.5625 per share for Class A, Class B and Advisor Class shares. The fund
paid no distributions for Class C shares since sales commenced.
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, Class C and Advisor Class shares will
differ from that of its Class A shares due to differences in sales-charge
structure and expenses.
o Because Class C shares have been offered for less than one year (since
3/1/99), all total return figures for Class C shares reflect cumulative
total return that has not been annualized.
o Beginning 3/1/99, Advisor Class shares were closed to new investors.
o The fund's average annual total returns, including sales charges, for
periods ended 9/30/99 (the most recent calendar quarter end) are as follows:
Class A shares, one year, 54.99%; five years, 12.07%; since inception
(1/27/92), 14.16%. Class B shares, one year, 56.80%; five years, 12.36%;
since inception (4/1/93), 15.14%. Class C shares, since inception (3/1/99),
19.44%. Advisor Class shares, one year, 63.39%; since inception (6/1/95),
17.76%.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in
the value of the U.S. dollar relative to the values of other currencies, the
custody arrangements made for the fund's foreign holdings, differences in
accounting, political risks and the lesser degree of public information
required to be provided by non-U.S. companies.
o Investing in a single-sector mutual fund involves greater risk and potential
reward than investing in a more diversified fund.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The unmanaged MSCI World Index is a group of global securities listed on
major world stock exchanges tracked by Morgan Stanley Capital International.
o The unmanaged Nasdaq (National Association of Securities Dealers Automated
Quotation system) Composite Index is a group of more than 5,000
over-the-counter securities widely regarded by investors to represent the
small-and medium-sized company stock universe.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
is a group of securities widely regarded by investors to represent the stock
market in general. Results shown assume the reinvestment of dividends.
o You cannot invest 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 GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY 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 GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
TELECOM AND TECHNOLOGY LEAD
MARKET PERFORMANCE
THE MARKET ENVIRONMENT HAS GREATLY CHANGED SINCE YOUR REPORT A YEAR AGO. HOW DID
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND PERFORM?
After being hammered by market volatility during last year's financial crisis,
the fund has recovered and surged ahead to provide outstanding returns.
For the fiscal year ended October 31, 1999, Class A and Class B shares of
the fund had total returns of 67.63% and 66.84%, respectively, excluding sales
charges. Advisor Class shares finished the reporting period with a total return
of 68.67%. These returns overpowered the S&P 500 Index and the MSCI World Index,
which had total returns of 25.66% and 24.91%, respectively, for the fiscal year.
Class C shares of the fund, which commenced sales on March 1, 1999, had a
cumulative total return of 32.24% through October 31, excluding sales charges.
Total net assets in the fund grew from $1.33 billion a year ago to $1.94
billion at the end of the reporting period.
WHAT WAS THE MARKET ENVIRONMENT LIKE DURING THE FISCAL YEAR?
With the worst of the global financial crisis past, the question throughout much
of 1999 has been whether or not the Federal Reserve Board (the Fed) would need
to raise interest rates to forestall inflation. Inflation fears spawned
volatility in the markets, curbing high-flying technology and communications
stocks in the spring and bringing on a resurgence of more cyclical stocks. The
Fed boosted the federal funds rate from 4.75% to 5% at the end of June in a
pre-emptive strike against inflation.
By mid-summer, the three most-watched stock indexes--the Dow, Nasdaq and S&P
500--reached new record highs, boosted by solid corporate earnings, continued
tame inflation and renewed vitality among tech stocks. But investors' fears
dampened stocks as key economic indicators, such as employment data and consumer
prices, showed that the economy blazed ahead unrelentingly. In response, on
August 24, the Fed raised both the federal funds rate and the discount rate to
5.25% and 4.75%, respectively.
Recent indicators have pointed to a slight slowdown in the U.S. economy.
Some analysts feel that the Fed has merely taken back the rate cuts it was
forced to make when last year's global financial crisis seeped into U.S.
markets. Despite persistent inflation fears, the U.S. economy continues to
experience a near-record level of consumer confidence. If the current economic
expansion lasts through the end of 1999, it will become the longest peacetime
expansion in U.S. history.
HOW HAVE FOREIGN MARKETS PERFORMED?
Global economic news is good on the whole, thanks largely to recoveries in
Europe, Asia and Japan. Markets that were devastated a year ago have come along
well during 1999; countries that have focused on cleaning up their banking
systems and stabilizing their currencies have enjoyed the best performance.
European companies are undergoing the same type of restructuring that U.S.
companies went through in the 1980s. They are selling unproductive assets,
cutting workforces and buying back shares. Strong merger-and-acquisition
activity also continues in Europe, stimulated by the launch of the euro early in
1999.
HOW HAVE TELECOM AND TECHNOLOGY STOCKS FARED?
At the end of the reporting period, the communications and technology components
of the S&P 500 were up 16.98% and 32.20%, respectively, for the year to date.
Both sectors have experienced ups and downs during 1999, with technology the
only sector of the index to post a positive return for the third quarter.
The venerable Dow Jones Industrial Average incorporated four new stocks on
November 1, including fund holdings Microsoft and SBC Communications. Experts
say these new stocks represent the "new economy," dominated largely by
technology and telecommunications, replacing stocks that represented the old,
industrial economy.
HOW WAS THE FUND POSITIONED AT THE END OF THE FISCAL YEAR?
Of our 68 holdings, most are large-company stocks. We also invest largely in the
United States, which dominates technology and telecommunications. As we stated
in our
-------------------------------------
IF THE CURRENT ECONOMIC EXPANSION
LASTS THROUGH THE END OF
1999, IT WILL BECOME
THE LONGEST PEACE-TIME
EXPANSION IN U.S. HISTORY.
-------------------------------------
FUND PERFORMANCE ROUTS INDEXES
Total return for year ended 10/31/99, excluding sales charges
================================================================================
Class A Shares 67.63
Class B Shares 66.84
S&P 500 Index 25.66
MSCI World Index 24.91
================================================================================
See important fund and index disclosures inside front cover.
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
previous report to shareholders, the fund has been restructured to implement its
expanded strategy of investing in technology stocks. This resulted in
substantial capital gains for the fund at the close of the fiscal year. However,
we believe the changes we've made will enhance the fund's performance.
HOW HAVE YOU BEEN TAKING ADVANTAGE OF TRENDS IN TELECOMMUNICATIONS AND
TECHNOLOGY?
Major trends include deregulation, the enormous growth in data traffic, the move
from wire d to wireless phones, e-commerce and increasing bandwidth. We look for
companies that are working to meet the increasing telecommunications and
technology demands created by the e-revolution.
o Telephone companies all over the world--long regulated and often
state-owned--are being turned loose to compete, resulting in a flurry of
merger-and-acquisition activity. Companies are preparing for the day when there
is effectively no separation between local and long-distance calling or between
carrying voice, data or video. Fund holdings Vodafone Group, Qwest
Communications and MCI WorldCom all made major acquisitions this year.
o According to IDC, a technology research group, more than 111 million people
subscribed to wireless services in 1998. Experts say five years from now,
cellphone users will be able to download pictures from the Web and even do
videoconferencing from their mobile phones. Nokia, a fund holding and
mobile-phone leader, predicts that 15% of those sold by the end of next year
will be Internet-capable.
o In 1998, the Internet economy generated an estimated $301.4 billion in the
United States, according to a study by the University of Texas Center for
Research in Electronic Commerce. The Internet economy has already outpaced the
energy sector (1998 revenue: $223 billion) and is closing in on the auto
industry ($350 billion). Related fund holdings include eBay, RealNetworks and
NaviSite.
o Equipment makers like Cisco Systems and Tellabs, both in our portfolio,
focus on building communications networks to improve Internet bandwidth (a
measure of how wide the connection pipeline is and how much information can be
sent through it). JDS Uniphase, our top holding, makes chips used to increase
the carrying capacity of optical fibers. We continue to see strength in these
types of companies.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
We believe e-commerce performance in the fourth quarter will be very strong.
Consumers are expected to spend nearly $36 million in on-line sales in 1999, and
the Internet economy as a whole is expected to generate about $507 billion by
the end of the year. The fourth quarter has also historically been the best
quarter for markets over the last decade, with an average 6% return.
Many analysts seem to believe that any Y2K problems will be minor. In fact,
some are predicting a "millennium meltup" in the first quarter of 2000--a market
resurgence caused by the reinvestment of capital pulled from the market before
the end of 1999. Regardless of market trends, we will continue to target
companies with above-average earnings growth that we believe will be market
leaders in telecommunications and technology.
[MAP]
PORTFOLIO COMPOSITION
As of 10/31/99, based on total net assets
<TABLE>
<CAPTION>
==================================================================================================================
Top 10 Holdings Top 10 Countries
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. JDS Uniphase Corp. 6.64% 1. United States 68.85%
2. America Online, Inc. 4.69 2. United Kingdom 7.22
3. Nokia Oyj Class A (Finland) 4.12 3. Japan 6.72
4. Cisco Systems, Inc. 3.82 4. Finland 4.12
5. eBay, Inc. 3.63 5. Canada 2.73
6. Motorola, Inc. 3.53 6. Germany 2.60
7. Yahoo! Inc. 3.33 7. Sweden 1.10
8. Microsoft Corp. 3.11 8. Ireland 1.02
9. NTT Mobile Communications Network, Inc. (Japan) 2.98 9. Spain 0.90
10. Mannesmann A.G. (Germany) 2.60 10. Hong Kong 0.70
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
==================================================================================================================
</TABLE>
-------------------------------------
WE LOOK FOR COMPANIES THAT ARE
WORKING TO MEET THE INCREASING
TELECOMMUNICATIONS AND
TECHNOLOGY DEMANDS CREATED BY
THE E-REVOLUTION.
-------------------------------------
See important fund and index disclosures inside front cover.
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND VS. BENCHMARK INDEXES
1/27/92-10/31/99
================================================================================
Global Telecom S&P500 MSCI World
- --------------------------------------------------------------------------------
1/92 $ 10,000 $ 10,000 $ 10,000
10/92 9,300 10,476 9,419
10/93 14,284 12,038 11,963
10/94 15,287 12,503 12,878
10/95 14,848 15,804 14,100
10/96 15,887 19,610 16,397
10/97 18,700 25,905 19,148
10/98 18,109 31,607 22,069
10/99 30,357 39,718 27,567
Source: Lipper, Inc.
================================================================================
ABOUT THIS CHART
The chart compares your fund's Class A shares to benchmark indexes. It is
important to understand the differences between your fund and these indexes. An
index measures the performance of a hypothetical portfolio. Your fund's total
return, shown with the applicable sales charge, includes fund expenses and
management fees. A market index such as the S&P 500 or the MSCI World Index is
not managed, incurring no sales charges, expenses or fees. (Please note that the
results for these indexes are for the period 1/31/92-10/31/99.) If you could buy
all the securities that make up a market index, you would incur expenses that
would affect your investment's return. Use of these indexes is intended to give
you a general idea of how your fund performed compared to the stock market.
Since the last reporting period, AIM Global Telecommunications and
Technology Fund has elected to use the S&P 500 as its primary benchmark. This
index more closely reflects the performance of the securities in which the fund
invests.
The fund will no longer measure its performance against the MSCI World
Index, the index published in previous reports to shareholders. Because this is
the first reporting period since we have adopted the new index, SEC guidelines
require that we compare the fund's performance to both the old and the new
index.
YOUR FUND'S LONG-TERM PERFORMANCE
Average Annual Total Returns
As of 10/31/99, including sales charges
================================================================================
CLASS A SHARES
- --------------------------------------------------------------------------------
Inception (1/27/92) 15.38%
5 years 13.59
1 year 59.69
CLASS B SHARES
- --------------------------------------------------------------------------------
Inception (4/1/93) 16.57%
5 years 13.90
1 year 61.84
CLASS C SHARES
- --------------------------------------------------------------------------------
Inception (3/1/99) 31.24%*
ADVISOR CLASS SHARES**
- --------------------------------------------------------------------------------
Inception (6/1/95) 19.96%
1 year 68.67
================================================================================
* Total return provided is cumulative total return that has not been
annualized.
** Sales charges do not apply.
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class B, Class C and Advisor Class shares will
differ from Class A shares due to differing fees and expenses. For fund data
performance calculations and descriptions of indexes cited on this page, please
refer to the inside front cover.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. THE
RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
October 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-67.89%
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.76%
Comcast Corp.-Class A 440,000 $ 18,535,000
- ---------------------------------------------------------------
UnitedGlobalCom Inc.-Class A(a) 400,000 34,800,000
- ---------------------------------------------------------------
53,335,000
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-16.36%
Corning, Inc. 402,000 31,607,250
- ---------------------------------------------------------------
General Instrument Corp.(a) 250,000 13,453,125
- ---------------------------------------------------------------
Harmonic, Inc.(a) 400,000 23,750,000
- ---------------------------------------------------------------
JDS Uniphase Corp.(a) 770,000 128,493,750
- ---------------------------------------------------------------
Lucent Technologies Inc. 400,000 25,700,000
- ---------------------------------------------------------------
Motorola, Inc. 701,000 68,303,687
- ---------------------------------------------------------------
Tellabs, Inc.(a) 400,000 25,300,000
- ---------------------------------------------------------------
316,607,812
- ---------------------------------------------------------------
COMPUTERS (NETWORKING)-6.16%
Cisco Systems, Inc.(a) 1,000,000 74,000,000
- ---------------------------------------------------------------
Exodus Communications, Inc.(a) 170,800 14,688,800
- ---------------------------------------------------------------
Extreme Networks, Inc.(a) 150,000 12,046,875
- ---------------------------------------------------------------
VeriSign, Inc.(a) 150,000 18,525,000
- ---------------------------------------------------------------
119,260,675
- ---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.07%
EMC Corp.(a) 550,000 40,150,000
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-19.63%
America Online, Inc.(a) 700,400 90,833,125
- ---------------------------------------------------------------
Clarus Corp.(a) 100,000 1,875,000
- ---------------------------------------------------------------
eBay, Inc.(a) 520,000 70,265,000
- ---------------------------------------------------------------
InfoSpace.com, Inc.(a) 194,800 10,835,750
- ---------------------------------------------------------------
Inktomi Corp.(a) 291,800 29,599,462
- ---------------------------------------------------------------
Lycos, Inc.(a) 350,000 18,725,000
- ---------------------------------------------------------------
Microsoft Corp.(a) 650,000 60,165,625
- ---------------------------------------------------------------
NaviSite, Inc.(a) 77,500 3,642,500
- ---------------------------------------------------------------
RealNetworks, Inc.(a) 130,000 14,259,375
- ---------------------------------------------------------------
Verity, Inc.(a) 100,000 6,887,500
- ---------------------------------------------------------------
VerticalNet, Inc.(a) 150,000 8,400,000
- ---------------------------------------------------------------
Yahoo! Inc.(a) 360,327 64,521,053
- ---------------------------------------------------------------
380,009,390
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.19%
EchoStar Communications Corp.(a) 60,000 3,712,500
- ---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.25%
General Motors Corp.-Class H(a) 65,000 4,732,813
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (INSTRUMENTATION)-0.41%
Alpha Industries, Inc.(a) 145,000 $ 8,011,250
- ---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-4.07%
Broadcom Corp.-Class A(a) 230,000 29,396,875
- ---------------------------------------------------------------
PMC-Sierra, Inc.(a) 380,000 35,815,000
- ---------------------------------------------------------------
Texas Instruments, Inc. 150,000 13,462,500
- ---------------------------------------------------------------
78,674,375
- ---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.64%
GoTo.com, Inc.(a) 216,700 12,351,900
- ---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-2.22%
Brocade Communications Systems,
Inc.(a) 160,000 43,040,000
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.52%
Triton PCS Holdings, Inc.-Class
A(a) 234,200 8,255,550
- ---------------------------------------------------------------
Western Wireless Corp.-Class A(a) 400,000 21,150,000
- ---------------------------------------------------------------
29,405,550
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-2.61%
MCI WorldCom, Inc.(a) 500,000 42,906,250
- ---------------------------------------------------------------
WinStar Communications, Inc.(a) 195,000 7,568,439
- ---------------------------------------------------------------
50,474,689
- ---------------------------------------------------------------
TELEPHONE-9.00%
Bell Atlantic Corp. 700,000 45,456,250
- ---------------------------------------------------------------
NTL, Inc.(a) 626,771 47,242,883
- ---------------------------------------------------------------
Qwest Communications
International, Inc.(a) 1,150,000 41,400,000
- ---------------------------------------------------------------
RCN Corp.(a) 150,000 7,181,250
- ---------------------------------------------------------------
SBC Communications, Inc. 646,934 32,953,201
- ---------------------------------------------------------------
174,233,584
- ---------------------------------------------------------------
Total Domestic Common Stocks
(Cost $830,639,283) 1,313,999,538
- ---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-28.10%
AUSTRALIA-0.49%
Telstra Corp. (Telephone)(a) 2,972,900 9,538,957
- ---------------------------------------------------------------
CANADA-2.73%
BCE, Inc. (Telephone) 495,425 29,813,662
- ---------------------------------------------------------------
Nortel Networks (Communications
Equipment) 371,000 22,978,812
- ---------------------------------------------------------------
52,792,474
- ---------------------------------------------------------------
FINLAND-4.12%
Nokia Oyj (Communications Equipment) 696,000 79,673,598
- ---------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
GERMANY-2.60%
Mannesmann A.G.
(Machinery-Diversified) 320,000 $ 50,330,072
- ---------------------------------------------------------------
HONG KONG-0.70%
China Telecom Ltd.
(Telecommunications-
Cellular/Wireless)(a) 3,948,000 13,493,570
- ---------------------------------------------------------------
IRELAND-1.02%
Esat Telecom Group PLC-ADR
(Telecommunications-Long
Distance)(a) 441,300 19,748,175
- ---------------------------------------------------------------
JAPAN-6.72%
Kyocera Corp.
(Electronics-Component
Distributors) 150,000 14,387,799
- ---------------------------------------------------------------
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long Distance) 2,001 30,709,318
- ---------------------------------------------------------------
NTT Mobile Communications Network, Inc.
(Telecommunications-Cellular/Wireless) 2,170 57,649,105
- ---------------------------------------------------------------
Softbank Corp.
(Computers-Software & Services)(a) 30,000 12,459,834
- ---------------------------------------------------------------
Yahoo Japan Corp.
(Computers-Software & Services)(a) 28 14,771,474
- ---------------------------------------------------------------
129,977,530
- ---------------------------------------------------------------
NETHERLANDS-0.50%
Equant N.V.-ADR
(Computers-Networking)(a) 54,700 5,305,900
- ---------------------------------------------------------------
Equant N.V.
(Computers-Networking)(a) 45,300 4,408,353
- ---------------------------------------------------------------
9,714,253
- ---------------------------------------------------------------
RUSSIA-0.00%
Russian Telecommunications
Development Corp.-Non-Voting
(Telecommunications-Cellular-Wireless)
(Acquired 12/22/93;
Cost $4,530,000)(b)(c) 453,000 0
- ---------------------------------------------------------------
Russian Telecommunications
Development Corp.-Voting
(Telecommunications-Cellular-Wireless)
(Acquired 12/22/93; Cost
$3,310,000)(b)(c) 331,000 0
- ---------------------------------------------------------------
0
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SPAIN-0.90%
Telefonica S.A. (Telephone)(a) 1,058,409 $ 17,415,135
- ---------------------------------------------------------------
SWEDEN-1.10%
Telefonaktiebolaget LM
Ericsson-ADR (Communications
Equipment) 500,000 21,375,000
- ---------------------------------------------------------------
UNITED KINGDOM-7.22%
British Sky Broadcasting Group
PLC (Broadcasting-Television,
Radio & Cable) 980,000 10,529,310
- ---------------------------------------------------------------
British Telecommunications PLC
(Communications Equipment) 1,005,000 18,233,357
- ---------------------------------------------------------------
Orange PLC (Telephone)(a) 1,671,300 41,683,888
- ---------------------------------------------------------------
Vodafone AirTouch PLC
(Telecommunications-
Cellular/Wireless) 7,185,000 33,430,390
- ---------------------------------------------------------------
Vodafone AirTouch PLC-ADR
(Telecommunications-
Cellular/Wireless) 750,000 35,953,125
- ---------------------------------------------------------------
139,830,070
- ---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$235,295,660) 543,888,834
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. DOLLAR DENOMINATED
CONVERTIBLE BONDS & NOTES-0.96%
TELECOMMUNICATIONS (LONG DISTANCE)-0.96%
Level 3 Communications Inc.,
Conv. Bonds, 6.00%, 09/15/09
(Cost $15,047,500) $15,000,000 18,450,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-3.85%
STIC Liquid Assets Portfolio(d) 37,285,702 37,285,702
- ---------------------------------------------------------------
STIC Prime Portfolio(d) 37,285,702 37,285,702
- ---------------------------------------------------------------
Total Money Market Funds
(Cost $74,571,404) 74,571,404
- ---------------------------------------------------------------
TOTAL INVESTMENTS-100.80% 1,950,909,776
- ---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.80%) (15,433,144)
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,935,476,632
===============================================================
</TABLE>
Investment Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(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 $0.
(d) The security shares the same investment advisor as the Fund.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $1,155,553,847) $1,950,909,776
- -------------------------------------------------------------
Cash 1,184
- -------------------------------------------------------------
Foreign currencies, at value (cost
$12,905,416) 13,018,879
- -------------------------------------------------------------
Receivables for:
Investments sold 1,997,433
- -------------------------------------------------------------
Fund shares sold 8,062,379
- -------------------------------------------------------------
Dividends and interest 766,409
- -------------------------------------------------------------
Other assets 111
- -------------------------------------------------------------
Total assets 1,974,756,171
- -------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 32,954,728
- -------------------------------------------------------------
Fund shares reacquired 2,452,926
- -------------------------------------------------------------
Accrued advisory fees 1,463,119
- -------------------------------------------------------------
Accrued administrative service fees 14,251
- -------------------------------------------------------------
Accrued distribution fees 1,297,984
- -------------------------------------------------------------
Accrued transfer agent fees 446,518
- -------------------------------------------------------------
Accrued trustees' fees 16,478
- -------------------------------------------------------------
Accrued operating expenses 633,535
- -------------------------------------------------------------
Total liabilities 39,279,539
- -------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $1,935,476,632
=============================================================
NET ASSETS:
Class A $1,023,124,164
=============================================================
Class B $ 898,399,932
=============================================================
Class C $ 12,352,198
=============================================================
Advisor Class $ 1,600,338
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 38,700,841
=============================================================
Class B 35,327,893
=============================================================
Class C 485,820
=============================================================
Advisor Class 58,931
=============================================================
Class A:
Net asset value and redemption price per
share $ 26.44
- -------------------------------------------------------------
Offering price per share:
(Net asset value of $26.44 divided by
95.25%) $ 27.76
=============================================================
Class B:
Net asset value and offering price per
share $ 25.43
=============================================================
Class C:
Net asset value and offering price per
share $ 25.43
=============================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 27.16
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $387,393 foreign withholding
tax) $ 5,147,508
- ------------------------------------------------------------
Interest 4,430,526
- ------------------------------------------------------------
Securities lending 1,219,467
- ------------------------------------------------------------
Total investment income 10,797,501
- ------------------------------------------------------------
EXPENSES:
Advisory and administrative fees 15,437,508
- ------------------------------------------------------------
Accounting services fees 320,819
- ------------------------------------------------------------
Custodian fees 287,382
- ------------------------------------------------------------
Distribution fees -- Class A 4,313,052
- ------------------------------------------------------------
Distribution fees -- Class B 7,605,277
- ------------------------------------------------------------
Distribution fees -- Class C 27,171
- ------------------------------------------------------------
Printing fees 1,124,218
- ------------------------------------------------------------
Trustees' fees 66,075
- ------------------------------------------------------------
Transfer agent fees -- Class A 1,659,429
- ------------------------------------------------------------
Transfer agent fees -- Class B 1,463,050
- ------------------------------------------------------------
Transfer agent fees -- Class C 7,787
- ------------------------------------------------------------
Transfer agent fees -- Advisor 10,787
- ------------------------------------------------------------
Other 447,944
- ------------------------------------------------------------
Total expenses 32,770,499
- ------------------------------------------------------------
Less: Expenses paid indirectly (14,651)
- ------------------------------------------------------------
Net expenses 32,755,848
- ------------------------------------------------------------
Net investment income (loss) (21,958,347)
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
AND FORWARD CONTRACTS:
Net realized gain (loss) from:
Investment securities 304,153,021
- ------------------------------------------------------------
Foreign currencies (3,359,421)
- ------------------------------------------------------------
Forward contracts (1,095,245)
- ------------------------------------------------------------
299,698,355
- ------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 535,189,501
- ------------------------------------------------------------
Foreign currencies (485,052)
- ------------------------------------------------------------
Forward contracts 2,729,985
- ------------------------------------------------------------
537,434,434
- ------------------------------------------------------------
Net gain from investment securities, foreign
currencies and forward contracts 837,132,789
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $815,174,442
============================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
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 (loss) $ (21,958,347) $ (18,787,161)
- ----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and forward contracts 299,698,355 71,148,199
- ----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies and forward
contracts 537,434,434 (65,095,698)
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 815,174,442 (12,734,660)
- ----------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS:
Class A (23,149,236) (59,979,418)
- ----------------------------------------------------------------------------------------------
Class B (21,143,550) (54,057,223)
- ----------------------------------------------------------------------------------------------
Advisor Class (150,968) (239,075)
- ----------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Class A (101,952,900) (140,083,034)
- ----------------------------------------------------------------------------------------------
Class B (72,208,921) (120,556,830)
- ----------------------------------------------------------------------------------------------
Class C 11,141,603 --
- ----------------------------------------------------------------------------------------------
Advisor Class (5,609,698) (92,959)
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 602,100,772 (387,743,199)
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,333,375,860 1,721,119,059
- ----------------------------------------------------------------------------------------------
End of period $1,935,476,632 $1,333,375,860
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 863,973,212 $1,003,778,129
- ----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) 5,534 5,534
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and forward contracts 275,954,959 71,483,704
- ----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and forward contracts 795,542,927 258,108,493
- ----------------------------------------------------------------------------------------------
$1,935,476,632 $1,333,375,860
==============================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Telecommunications and Technology 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.
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 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 increased
by $21,958,348, undistributed net realized gains decreased by $50,783,348
and paid-in capital increased by $28,825,000 as a result of differing
book/tax treatment of foreign currency transactions and net operating loss
reclassifications 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.
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
9
<PAGE> 12
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.
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.
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 $320,819 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 $3,141,053 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 $4,313,052, $7,605,277 and $27,171, respectively,
as compensation under the Plans.
AIM Distributors received commissions of $205,929 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 $8,313 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 $14,651 under expense offset arrangements. The effect of the
above arrangements resulted in a reduction of the Fund's total expenses of
$14,651 during the year ended October 31, 1999.
10
<PAGE> 13
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 $112,348 with a weighted average interest rate of
5.47%. Interest expense for the Fund for the year ended October 31, 1999 was
$12,459.
NOTE 5-PORTFOLIO SECURITIES LOANED
At October 31, 1999, securities with an aggregate value of $261,274,438 were on
loan to brokers. The loans were secured by cash collateral of $266,656,351
received by the Fund. For the year ended October 31, 1999, the Fund received
fees of $1,219,467 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
$1,890,552,707 and $2,086,302,700, 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 $800,003,800
- -------------------------------------------------------------------------
Aggregate unrealized appreciation
(depreciation) of investment securities (6,592,795)
- -------------------------------------------------------------------------
Net unrealized appreciation of investment securities $793,411,005
=========================================================================
</TABLE>
Cost of investments for tax purposes is $1,157,498,771.
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 42,637,825 $ 826,757,794 108,008,301 $1,941,688,002
- -------------------------------------------------------------------------------------------------------------------------
Class B 6,195,698 131,627,637 10,070,976 179,810,719
- -------------------------------------------------------------------------------------------------------------------------
Class C* 544,069 12,490,317 -- --
- -------------------------------------------------------------------------------------------------------------------------
Advisor Class 664,975 14,200,299 3,217,206 58,029,142
- -------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 1,233,567 21,142,757 3,004,072 49,839,899
- -------------------------------------------------------------------------------------------------------------------------
Class B 1,176,293 19,479,129 2,786,131 44,943,256
- -------------------------------------------------------------------------------------------------------------------------
Advisor Class 8,588 150,375 14,131 237,955
- -------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (49,011,051) (949,853,451) (117,654,141) (2,131,610,935)
- -------------------------------------------------------------------------------------------------------------------------
Class B (11,052,108) (223,315,687) (19,680,426) (345,310,805)
- -------------------------------------------------------------------------------------------------------------------------
Class C* (58,249) (1,348,714) -- --
- -------------------------------------------------------------------------------------------------------------------------
Advisor Class (900,945) (19,960,372) (3,206,646) (58,360,056)
- -------------------------------------------------------------------------------------------------------------------------
(8,561,338) $(168,629,916) (13,440,396) $ (260,732,823)
=========================================================================================================================
</TABLE>
* Class C shares commenced sales on March 1, 1999.
11
<PAGE> 14
NOTE 8-FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------
1999 1998(a) 1997(a) 1996(a) 1995
---------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.28 $ 18.04 $ 16.69 $ 16.42 $ 17.80
- ------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.25) (0.17) (0.17) (0.13) (0.09)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 10.97 (0.39) 2.93 1.22 (0.43)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations 10.72 (0.56) 2.76 1.09 (0.52)
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net realized gain on investments (0.56) (1.20) (1.41) (0.82) (0.86)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.44 $ 16.28 $ 18.04 $ 16.69 $ 16.42
- ------------------------------------------------------------------------------------------------------------------------------
Total return(b) 67.63% (3.16)% 17.70% 7.00% (2.88)%
==============================================================================================================================
Ratios and supplemental data:
Net assets, end of period (in 000s) $1,023,124 $713,904 $910,801 $1,204,428 $1,353,722
==============================================================================================================================
Ratio of net investment income (loss) to average net assets (1.11)%(c) (0.93)% (1.06)% (0.89)% (0.55)%
==============================================================================================================================
Ratio of expenses to average net assets 1.77%(c) 1.88% 1.84% 1.79% 1.83%
==============================================================================================================================
Portfolio turnover rate 122% 75% 35% 37% 62%
==============================================================================================================================
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Total return does not include sales charges.
(c) Ratios are based on average net assets of $862,610,444.
12
<PAGE> 15
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
1999 1998(a) 1997(a) 1996(a) 1995
--------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.76 $ 17.58 $ 16.37 $ 16.20 $ 17.66
- ---------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.35) (0.25) (0.25) (0.23) (0.17)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 10.58 (0.37) 2.87 1.22 (0.43)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations 10.23 (0.62) 2.62 0.99 (0.60)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net realized gain on investments (0.56) (1.20) (1.41) (0.82) (0.86)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.43 $ 15.76 $ 17.58 $ 16.37 $ 16.20
===========================================================================================================================
Total return(b) 66.84% (3.67)% 17.15% 6.46% (3.37)%
===========================================================================================================================
Ratios and supplemental data:
Net assets, end of period (in 000s) $898,400 $614,715 $805,535 $1,007,654 $1,111,520
===========================================================================================================================
Ratio of net investment income (loss) to average net assets (1.62)%(c) (1.43)% (1.56)% (1.39)% (1.05)%
===========================================================================================================================
Ratio of expenses to average net assets 2.28%(c) 2.38% 2.34% 2.29% 2.33%
===========================================================================================================================
Portfolio turnover rate 122% 75% 35% 37% 62%
===========================================================================================================================
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Total return does not include sales charges.
(c) Ratios are based on average net assets of $760,527,702.
13
<PAGE> 16
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS C ADVISOR CLASS
-------------- -------------------------------------------------------------
MARCH 1, 1999 YEAR ENDED OCTOBER 31,
TO OCTOBER 31, ---------------------------------------- JUNE 1, 1995 TO
1999 1999 1998(a) 1997(a) 1996(a OCTOBER 31, 1995
-------------- ------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.23 $ 16.61 $ 18.28 $ 16.81 $ 16.46 $15.24
- ------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11) (0.11) (0.08) (0.09) (0.05) --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 6.31 11.22 (0.39 2.97 1.22 1.22
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment
operations 6.20 11.11 (0.47) 2.88 1.17 1.22
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net realized gain on investments -- (0.56) (1.20) (1.41) (0.82) --
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.43 $ 27.16 $ 16.61 $ 18.28 $ 16.81 $16.46
==============================================================================================================================
Total return(b) 32.24% 68.67% (2.59)% 18.33% 7.49% 7.94%
==============================================================================================================================
Ratios and supplemental data:
Net assets, end of period (in 000's) $12,352 $ 1,600 $ 4,757 $ 4,783 $ 945 $ 681
==============================================================================================================================
Ratio of net investment income (loss) to
average net assets: (1.62)%(c) (0.56)%(d) (0.43)% (0.56)% (0.39)% (0.05)%(e)
==============================================================================================================================
Ratio of expenses to average net assets: 2.28%(c) 1.22%(d) 1.38% 1.34% 1.29% 1.33%(e)
==============================================================================================================================
Portfolio turnover rate 122% 122% 75% 35% 37% 62%
==============================================================================================================================
</TABLE>
(a) These selected per share data were calculated based upon the average shares
outstanding during the period.
(b) Total return does not include sales charge and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $4,047,890.
(d) Ratios are based on average net assets of $5,607,430.
(e) Annualized.
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.
14
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Telecommunications and
Technology 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 Global Telecommunications and Technology Fund at
October 31, 1999, and the results of its operations, the
changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally
accepted accounting principles. These financial
statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of
the Fund's management; our responsibility is to express
an opinion on these financial statements based on our
audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing
standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating
the overall financial statement presentation. We believe
that our audits, which included confirmation of
securities at October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the
opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 23, 1999
15
<PAGE> 18
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham TRANSFER AGENT
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President A I M Fund Services, Inc.
P.O. Box 4739
Ruth H. Quigley Carol F. Relihan Houston, TX 77210-4739
Private Investor Vice President
CUSTODIAN
Mary J. Benson
Assistant Vice President and State Street Bank and Trust Company
Assistant Treasurer 225 Franklin Street
Boston, MA 02110
Sheri Morris
Assistant Vice President and COUNSEL TO THE FUND
Assistant Treasurer
Kirkpatrick & Lockhart LLP
Nancy L. Martin 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Ofelia M. Mayo COUNSEL TO THE TRUSTEES
Assistant Secretary
Paul, Hastings, Janofsky & Walker LLP
Kathleen J. Pflueger Twenty Third Floor
Assistant Secretary 555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
160 Federal St.
Boston, MA 02110
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION -- UNAUDITED
AIM Global Telecommunications and Technology Fund distributed long-term capital
gains of $44,443,754 during the Fund's tax year ended October 31, 1999.
<PAGE> 19
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-------------------------------------
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-------------------------------------
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund(1) AIM Money Market Fund leadership in the mutual fund industry
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately $120
AIM Capital Development Fund billion in assets for more than 6.4
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS million shareholders, including
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund individual investors, corporate clients
AIM Large Cap Growth Fund AIM Asian Growth Fund and financial institutions, as of
AIM Mid Cap Equity Fund AIM Developing Markets Fund September 30, 1999.
AIM Mid Cap Growth Fund AIM Euroland Growth Fund(4) The AIM Family of Funds--Registered
AIM Mid Cap Opportunities Fund AIM European Development Fund Trademark--is distributed nationwide,
AIM Select Growth Fund AIM International Equity Fund and AIM today is the 10th-largest mutual
AIM Small Cap Growth Fund(2) AIM Japan Growth Fund fund complex in the United States in
AIM Small Cap Opportunities Fund(3) AIM Latin American Growth Fund assets under management, according to
AIM Value Fund AIM New Pacific Growth Fund Strategic Insight, an independent mutual
AIM Weingarten Fund fund monitor.
GLOBAL GROWTH FUNDS
GROWTH & INCOME FUNDS AIM Global Aggressive Growth Fund
AIM Advisor Flex Fund AIM Global Growth Fund
AIM Advisor Large Cap Value Fund
AIM Advisor Real Estate Fund GLOBAL GROWTH & INCOME FUNDS
AIM Balanced Fund AIM Global Growth & Income Fund
AIM Basic Value Fund AIM Global Utilities Fund
AIM Charter Fund
GLOBAL INCOME FUNDS
INCOME FUNDS AIM Emerging Markets Debt Fund
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AIM High Yield Fund AIM Global Income Fund
AIM High Yield Fund II AIM Strategic Income Fund
AIM Income Fund
AIM Intermediate Government Fund THEME FUNDS
AIM Limited Maturity Treasury Fund AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
TAX-FREE INCOME FUNDS AIM Global Health Care Fund
AIM High Income Municipal Fund AIM Global Infrastructure Fund
AIM Municipal Bond Fund AIM Global Resources Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Telecommunications and Technology Fund(5)
AIM Tax-Free Intermediate Fund AIM Global Trends Fund(6)
</TABLE>
(1)AIM Aggressive Growth Fund reopened to new investors on November 16, 1998.
(2)AIM Small Cap Growth Fund closed to new investors on November 8, 1999. (3)AIM
Small Cap Opportunities Fund closed to new investors on November 4, 1999. (4)On
September 1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund.
Previously the fund invested in all size companies in most areas of Europe. The
fund now seeks to invest at least 65% of its assets in large-cap companies
within countries using the euro as their currency (EMU-member countries). (5)On
June 1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (6)Effective August 27, 1999, AIM Global
Trends Fund was restructured to operate as a traditional mutual fund. Before
that date, the fund operated as a fund of funds. For more complete information
about any AIM fund(s), including sales charges and expenses, ask your financial
advisor or securities dealer for a free prospectus(es). Please read the
prospectus(es) carefully before you invest or send money. If used as sales
material after January 20, 2000, this report must be accompanied by a current
Quarterly Review of Performance for AIM Funds.
Invest with DISCIPLINE
--Registered Trademark--
GTL-AR-1
