<PAGE> 1
ANNUAL REPORT / OCTOBER 31 2000
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<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 who seek
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's performance figures are
historical, and they reflect the reinvestment of distributions and changes
in net asset value.
o During the fiscal year ended 10/31/00, the fund paid distributions of
$3.1183 per Class A, Class B and Class C shares.
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 its Class A shares due to different sales-charge structure and class
expenses.
o In addition to returns as of the close of the fiscal year, found later in
this report, industry regulations require us to provide average annual total
returns (including sales charges) as of 9/30/00, the most recent calendar
quarter which were: Class A shares, one year, 55.83%; five years, 21.87%;
inception (1/27/92), 18.99%. Class B shares, one year, 57.75%; five years,
22.26%; inception (4/1/93), 20.58%. Class C shares, one year, 61.70%;
inception (3/1/99), 52.93%.
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 participates in the initial public offering (IPO) market, and a
significant portion of the fund's returns are attributable to its investment
in IPOs, which have a magnified impact due to the fund's relatively small
asset base. There is no guarantee that as the fund's assets grow, it will
continue to experience substantially similar performance by investing in
IPOs.
o Investing in a single-sector mutual fund involves greater risk and potential
return than investing in a more diversified fund.
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 National Association of Securities Dealers Automated Quotation System
Composite Index (the Nasdaq) is a market-value-weighted index comprising all
domestic and non-U.S.-based common stocks listed on the Nasdaq system. It
includes more than 5,000 companies, and it is often considered
representative of the small and medium-sized company stock universe. While
it includes many small and mid-sized company stocks, large-capitalization
technology companies tend to dominate the index.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
represents the performance of the U.S. stock market.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they 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:
It's an honor to address you as the AIM Funds' new chairman.
[PHOTO OF I feel privileged to succeed Ted Bauer, who recently retired
Robert H. from the funds' board and will soon retire as A I M
Graham, Management Group's chairman after a long, successful career
Chairman of in the investment industry. Ted has always shown the highest
the Board of degree of integrity and commitment to excellence, and I have
THE FUND always admired him. I'm also proud to be part of the team
APPEARS HERE] that launched AIM almost 25 years ago. From the beginning,
AIM has been a very people-oriented, service-minded company,
and I plan to carry on the tradition for our shareholders,
financial advisors and employees.
UNCERTAIN MARKETS
The markets this year have been particularly volatile and
confusing for many investors, especially for those who have
only experienced the bull market of the 1990s. After almost
a decade of double-digit returns, the S&P 500 was down 1.81% year-to-date as of
October 31, 2000. But market returns in the 20% to 30% range, such as we have
seen in recent years, are not typical. If you expect these kinds of returns
every year, you'll be disappointed. Historically, markets decline in one out of
every four years. What we're seeing now is a normal downturn.
This appears to be a worldwide trend. Throughout 2000, overseas markets
generally have been more turbulent than their U.S. counterpart.
REASONS FOR OPTIMISM
While investors may need to temper their expectations, there are plenty of
reasons to be optimistic. Economic fundamentals remain strong, and many believe
that the Federal Reserve Board may have succeeded in bringing the economy to a
"soft landing." Gross domestic product growth slowed to 2.4% in the third
quarter from the rapid pace of about 7% a year ago. With this slowdown, it seems
unlikely that the Fed will raise interest rates in the near future, and stable
interest rates provide a solid environment for both stocks and bonds.
In Europe, the region's economic and investment future continues to look
bright despite the weak euro. Restructuring, merger activity and tax reform bode
well for European economies. In Asia, most analysts think the continuing
strength of the U.S. economy will help boost Asian stock markets.
THE VALUE OF ADVICE
The current environment illustrates the value of professional money management.
Knowing when to buy and sell takes expertise and discipline even in the best of
markets. During downturns, many investors may be tempted to make decisions based
on emotions instead of strategy. The wisest choice is to rely on a professional
money manager to make these decisions for you.
In these uncertain times, it's important to keep market volatility in
perspective. Mutual fund investing should be a long-term endeavor. Remember why
you're investing, whether it's for your retirement or your child's education,
and think about your time frame. If you're unsure about whether your investments
can meet your goals, visit your financial advisor for help.
In the following pages, your fund's portfolio managers discuss market
activity, how they managed your fund during the fiscal year and their near-term
outlook. If you have any questions or comments, please contact us through our
Web site, www.aimfunds.com, or call our Client Services Department at
800-959-4246 during normal business hours. Information about your account is
available at our Web site and on our automated AIM Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of Funds
--Registered Trademark--.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
-------------------------------------
THE CURRENT
ENVIRONMENT
ILLUSTRATES THE VALUE
OF PROFESSIONAL
MONEY MANAGEMENT.
KNOWING WHEN TO BUY
AND SELL TAKES
EXPERTISE AND
DISCIPLINE EVEN IN THE
BEST OF MARKETS.
-------------------------------------
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
1
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND POSTS STRONG RESULTS IN VOLATILE MARKET
TECHNOLOGY STOCKS HAVE BEEN EXTREMELY VOLATILE OVER THE PAST YEAR. HOW DID AIM
GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND PERFORM?
The fund produced solid results during the fiscal year ended October 31, 2000,
despite intense market volatility. Class A shares reported a total return of
27.52%, Class B shares 26.87% and Class C shares 26.83%. These figures are at
net asset value and do not include sales charges. The fund outpaced its
benchmark, the S&P 500, which produced a total annual return of 6.08% during the
same time frame.
Your fund's performance for the fiscal year ended October 31 includes gains
made during late 1999 and early 2000, when markets were more exuberant than they
became later in the fiscal year. More recently, performance has been affected by
the sell-off in the technology sector and other market difficulties.
WHAT WERE THE MAJOR TRENDS IN EQUITY MARKETS OVER THE REPORTING PERIOD?
Stock markets worldwide entered 2000 with a roar, led by technology, media and
telecommunications (TMT) stocks. This rally lasted until March, when inflation
fears, rising interest rates and high stock-price valuations sparked a worldwide
tech sell-off.
Since spring, volatility has been the watchword. In May and June, global
markets improved amid mounting evidence that the U.S. economy was slowing,
reducing the chance that the U.S. Federal Reserve Board (the Fed) would continue
to raise interest rates. But the market upturn was short-lived. In late summer
and early fall, the markets plunged again as investors worried about rising oil
prices, unrest in the Middle East and lower corporate earnings.
September and October were especially rough months for technology stocks as
many notable companies reported earnings and revenue misses, including Intel,
Apple, Dell, Motorola and Lucent. On October 31, the tech-laden Nasdaq was down
17.20% year-to-date, falling 8.3% in October alone. According to The Wall Street
Journal, this October was the worst for the Nasdaq since 1987, when the stock
market declined precipitously.
HOW DID YOU MANAGE THE PORTFOLIO IN THIS ENVIRONMENT?
We maintained our earnings-driven investment discipline, which helped us avoid
companies in struggling sectors of the tech arena. For example, we steered clear
of cellular-phone makers, mainframe-software companies, personal computer and
semiconductor-equipment makers, and Internet content and advertising companies.
Instead, we concentrated on companies in tech sectors that continue to show
positive earnings, including data storage, optics and networking.
COULD YOU EXPLAIN THIS STRATEGY FURTHER?
The fund avoided some tech areas for a number of reasons. Mainframe software has
seen declining earnings and sales as companies have focused on Web-based
initiatives. Personal-computer sales have dipped as the consumer market has
become saturated. Internet companies such as Yahoo! have struggled as Internet
advertising revenue has dried up. In addition, we cut back on wireless-phone
stocks because the transition to the next generation of handsets has not gone as
quickly or as smoothly as anticipated.
On the positive side, we have positioned the fund to take advantage of the
high demand for data storage, the bright future of optical networking and
increased spending in the networking/communications equipment areas. The move by
many corporations to put their businesses on the Web has created an explosive
demand for data storage and software to connect suppliers and users. A sector
called optical networking (the transmission of data using photons of light
carried over optical fibers instead of electrons carried over copper wires) also
has boomed because of consumer and corporate demand for increased Internet
bandwidth. And communications and networking companies continue to benefit from
the ongoing build-out of computer networks and the Internet. Communication-
integrated circuit makers, which are crucial to this build-out,
have been a key focus for the fund.
IN WHAT OTHER AREAS DID THE FUND INVEST?
We added biotechnology holdings to the portfolio over the past six months,
accounting for 5.95% of its total net assets as of October 31, 2000. Investor
interest in the biotechnology industry surged in June, when the publicly funded
Human Genome Project and a private company called Celera Genomics announced that
they had completed sequencing of the human genome. This sequencing offers broad
outlines of the thousands of genes
================================================================================
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND VS. BENCHMARK INDEX
Total returns, excluding sales charges,
for year ended 10/31/2000
================================================================================
FUND CLASS A SHARES 27.52%
FUND CLASS B SHARES 26.87%
FUND CLASS C SHARES 26.83%
S&P 500 6.08%
================================================================================
See important fund and index disclosures inside front cover.
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
[ARTWORK]
PORTFOLIO COMPOSITION
As of 10/31/00, based on total net assets
<TABLE>
<CAPTION>
==========================================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES TOP COUNTRIES
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Brocade Communications 5.75% 1. Computers 16.77% 1. United States 86.95%
Systems, Inc. (Software & Services)
2. Juniper Networks, Inc. 5.45 2. Communications Equipment 16.17 2. Canada 2.80
3. Applied Micro Circuits Corp. 5.02 3. Electronics (Semiconductors) 15.04 3. Japan 2.20
4. SDL, Inc. 4.26 4. Computers (Peripherals) 12.24 4. Hong Kong 1.20
5. Corning Inc. 4.05 5. Computers (Networking) 11.77 5. United Kingdom 1.20
6. Network Appliance, Inc. 3.62 6. Computers (Hardware) 6.26 6. Israel 0.74
7. CIENA Corp. 3.45 7. Biotechnology 5.95 7. Bermuda 0.70
8. Siebel Systems, Inc. 3.45 8. Telecommunications 4.86 8. Spain 0.66
(Cellular/Wireless)
9. VERITAS Software Corp. 3.37 9. Equipment (Semiconductor) 2.82
10. Cisco Systems, Inc. 3.37 10. Electronics (Instrumentation) 1.13
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
==========================================================================================================================
</TABLE>
making up the human body. Eventually, the fully decoded human genome will
provide scientists with a genetic roadmap, which may prove invaluable in
fighting diseases, improving clinical outcomes and developing new drugs.
As of October 31, 2000, the fund's biotech holdings included IDEC
Pharmaceuticals, which develops treatments for cancer, autoimmune and
inflammatory diseases; Incyte Genomics, which creates databases of all types of
genes and proteins; and Human Genome Sciences, which focuses on finding genes
involved in diseases.
WHAT STOCKS CONTRIBUTED TO THE FUND'S PERFORMANCE?
The fund focused on companies involved in data storage and the build-out of the
Internet infrastructure:
o Brocade makes switches--high-speed computers that move information among
networked devices--and related software. Customers Compaq, Dell, McDATA and
Sequent account for about 70% of its sales.
o Juniper Networks makes high-speed Internet backbone routers used to direct
data along phone-company networks.
o Applied Micro Circuits makes high-performance integrated circuits used to
control the flow of voice and data transmissions across fiber-optic
networks.
o SDL makes miniature laser equipment that lets customers send multiple light
signals over a single fiber. Its customers include companies that operate
large fiber-optic, cable TV and satellite communication networks.
WHAT'S YOUR OUTLOOK FOR THE NEAR TERM?
While we expect markets to remain volatile, the economic climate appears
favorable for stocks. The U.S. unemployment rate is at its lowest level in three
decades, consumer spending picked up in September, and except for higher oil
prices, inflation is moderate. However, with the economy slowing, we may see
continued volatility, especially in the tech sector. While broader economic
issues may continue to roil technology stocks, we feel that the fund is
well-positioned because of its earnings-driven investment discipline. This
strategy has helped the fund avoid struggling areas of the tech market and focus
on the sectors that are poised for growth.
-------------------------------------
READ THIS REPORT ONLINE!
Early in 2001, a new service will be
available--electronic delivery of fund
reports and prospectuses. Soon, you can
read the same AIM report you are reading
now--online. Once you sign up for the
service, we will send you a link to the
report via e-mail. If you choose to receive
your reports online, you will not receive a
paper copy by mail. You may cancel the
service at any time by visiting our Web site.
Please visit our Web site at
www.aimfunds.com and go to "Your AIM
Account." Log into your account and then
click on the "View Other Account Options"
dropdown menu and select "eDelivery."
-------------------------------------
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 INDEX
1/27/92-10/31/00
in thousands
================================================================================
AIM GLOBAL TELECOMMUNICATIONS
& TECHNOLOGY FUND, S&P 500
CLASS A SHARES INDEX
--------------------------------------------------------------------------------
1/27/92 $ 9,525.00 $10,000.00
10/92 9,300.00 10,476.00
10/93 14,284.00 12,038.00
10/94 15,287.00 12,503.00
10/95 14,848.00 15,804.00
10/96 15,887.00 19,610.00
10/97 18,700.00 25,905.00
10/98 18,109.00 31,607.00
10/99 30,358.00 39,719.00
10/00 38,712.00 42,132.00
Source: Lipper, Inc.
Past performance cannot guarantee comparable future results.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT THIS CHART
The chart compares your fund's Class A shares to a benchmark index. It is
important to understand the difference between your fund and this index. 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 is not managed, incurring no
sales charges, expenses or fees. (Please note that the results for the S&P 500
are for the period 1/31/92-10/31/00.) 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 this index is intended to give you a general idea of
how your fund performed compared to the stock market.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/00, including sales charges
================================================================================
CLASS A SHARES
Inception (1/27/92) 16.71%
5 Years 19.95
1 Year 21.45*
*27.52%, excluding sales charges
CLASS B SHARES
Inception (4/1/93) 17.88%
5 Years 20.33
1 Year 21.87*
*26.87%, excluding CDSC
CLASS C SHARES
Inception (3/1/99) 36.33%
1 Year 25.83*
*26.83%, excluding CDSC
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class B and Class C shares will differ from that
of its Class A shares due to differing fees and expenses. For fund performance
calculations and a description of the index cited on this page, please see the
inside front cover.
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
4
<PAGE> 7
ANNUAL REPORT / FOR CONSIDERATION
[ARTWORK]
CHOOSE YOUR INVESTMENT PALETTE
No two pieces of art are exactly alike. Just as an artist may use different
paints to create a piece, so does an investor use different kinds of investments
to create a portfolio. And as with art, tastes can change over time--most
investors have different goals at different stages in their lives, as well as
varying tolerance for risk. The biggest advantage mutual funds offer is the
potential for diversification. Providing funds with assorted objectives and
goals allows investors to shape their portfolios to their specific needs and to
spread their risk over several different funds, rather than painting their
portfolios all one color.
GROWTH VS. INCOME
If you look at the list of AIM's retail mutual funds on the back of your fund
report, you'll notice that they are divided into different types. Two that
frequently appear are growth and income. Common stock is normally the growth
component of a mutual fund with growth as a primary or secondary objective.
Bonds are typically the income components of a mutual fund with income as a
primary or secondary objective.
Let's take a closer look at the categories into which AIM's retail mutual
funds are divided. Keep in mind that funds listed under the same category don't
necessarily have the same kind of investment strategy or portfolio, even if they
have the same objective.
DOMESTIC MUTUAL FUNDS
GROWTH FUNDS
Growth funds typically invest in common stocks of companies whose businesses are
growing. Growth companies tend to reinvest their profits toward expansion of
their potential to produce greater returns instead of paying dividends. So
growth mutual funds focus on generating capital gains--increasing the value of
the stocks they hold--rather than current income, which means they generally
don't pay regular income dividends. Growth funds usually do, however, make one
capital-gains distribution per year, when there are gains.
An increase over time in the value of a growth fund's portfolio means the
fund's value, or share price, increases over time also. Shareholders in a growth
fund, then, make money by selling their shares for more than they paid for them.
Of course, the opposite is also true--shareholders can lose money by selling
their shares for less than they paid for them. Growth funds usually range from
moderate to very aggressive, depending on the size and types of companies in
which they invest.
GROWTH AND INCOME FUNDS
A growth and income fund generally invests in common and preferred stocks and
bonds of older, more established companies that have a longer track record of
growth and paying dividends.
A typical growth and income mutual fund will pay quarterly or annual income
dividends to its shareholders. (Monthly dividends are not common.) In this way,
growth and income funds can potentially provide long-term growth of investments
and also current income. These funds tend to be more conservative than growth
funds.
INCOME FUNDS
Income funds are generally designed to provide high current income rather than
long-term growth. To that end, income funds usually invest chiefly in
interest-paying corporate and government bonds. They may also own stocks of
companies that pay regular dividends. Some income funds are more aggressive than
others. The aggressiveness of a particular fund depends not only on the kinds of
securities in which it invests, but also on the fund's sector allocation and
maturity structure.
For example, Treasury securities are considered a relatively safe
investment because they are guaranteed by the U.S. government. However, lower
risk also means lower return potential. On the other hand, lower-rated
corporate bonds, often called junk bonds, involve more risk because they are not
guaranteed--they are only as good as the companies that issue them. But the
added risk also means higher return potential.
Income funds are considered more conservative and are suited for investors
seeking income rather than growth.
[ARTWORK]
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
5
<PAGE> 8
ANNUAL REPORT / FOR CONSIDERATION
TAX-FREE INCOME OR MUNICIPAL FUNDS
These funds provide shareholders with current income that is tax-exempt at some
level, depending on the securities in which they invest. So municipal mutual
funds appeal to investors who are looking to reduce income that would otherwise
be subject to tax. Municipal bonds or notes, which are issued by state or local
governments, are generally exempt from federal taxes. Federal securities, like
Treasury bonds, are usually exempt from state taxes. And then there are some
securities that are exempt from both federal and state taxes.(1)
MONEY MARKET FUNDS
A money market fund is one of the safest types of mutual funds available because
its main goal is preserving your investment while paying current income in the
form of interest. As a result, these funds tend to appeal to investors looking
for safety, liquidity and some income from their investment. Money market funds
invest in high-quality short-term securities such as commercial paper and U.S.
government agency securities. Although money market funds are not guaranteed or
insured by the U.S. government, the securities they hold are less risky than
other types of fixed-income securities. The trade-off for safety of principal
investment is a lower rate of return.(2)
INTERNATIONAL AND GLOBAL MUTUAL FUNDS
INTERNATIONAL GROWTH FUNDS
An international growth fund has the same objective as a domestic growth fund,
except it invests in stocks of companies located outside the United States. Like
their domestic counterparts, international growth funds tend to pay
distributions in the form of capital gains rather than dividends. An
international growth mutual fund might invest in a particular country, region or
continent depending on the investment strategy shown in its prospectus.
International funds carry different risks than domestic funds because most
foreign markets are not as established as the markets in the United States.
Other risks include changes in the value of the U.S. dollar compared to foreign
currencies, accounting differences, political risks and foreign regulatory
differences.
GLOBAL GROWTH, GLOBAL GROWTH AND INCOME, AND GLOBAL INCOME FUNDS
These funds are similar to their domestic equivalents in terms of their goals
and the income distributions they pay. Global funds are comparable to
international funds in that they can invest in stocks of companies outside the
United States. But global funds can also invest substantially in U.S. stocks;
international funds generally do not. The amount of a global fund's portfolio
that can be invested in the United States varies greatly from fund to fund,
according to a fund's prospectus. Global funds carry the same risks as
international funds.
SPECIALIZED FUNDS
THEME FUNDS
Theme or sector funds invest primarily in a particular industry or sector of the
economy, either domestically or globally. Theme funds are required by prospectus
to invest a certain percentage of their assets in their industry or sector of
choice under normal market conditions. As a result, theme funds present greater
risk and potential reward than more diversified funds. The types of securities
held by a theme fund determine its goal of growth and/or income.
--------------------------------------------------------------------------------
TYPES OF FUND DISTRIBUTIONS
INCOME DIVIDENDS are paid from dividends and/or interest from securities in a
fund's portfolio. For example, if a company in which a mutual fund owns stock
distributes some of its earnings to its shareholders as a dividend, the fund
passes on those earnings to its own shareholders. Income dividends are usually
taxed as ordinary income.
CAPITAL GAINS represent the net profit realized from the growth in value of the
holdings in a fund's portfolio. These distributions are usually made once per
year. There are two types of capital gains:
o Short-term capital gains are paid from net profits gained when a mutual fund
sells stocks or bonds it has held for less than a year. Short-term capital gains
are taxed as ordinary income.
o Long-term capital gains are paid from net profits gained when a mutual fund
sells stocks or bonds it has held for more than a year. Long-term capital gains
are usually taxed at the capital-gains rate, which is typically lower than
ordinary income-tax rates.
--------------------------------------------------------------------------------
(1) Investors in tax-free income funds still have a risk of incurring taxes on
capital-gains distributions, for example, so it's wise to see your tax advisor
before investing in such funds.
(2) There is no guarantee that a money market fund will be able to maintain a
stable net asset value of $1.00 per share.
See the back cover for a complete list of AIM's retail mutual funds. For more
information about your fund's objective, read your fund prospectus. 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.
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
6
<PAGE> 9
SCHEDULE OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-86.95%
BIOTECHNOLOGY-5.95%
Amgen Inc.(a) 342,000 $ 19,814,625
---------------------------------------------------------------
PE Corp-Celera Genomics Group(a) 150,000 10,125,000
---------------------------------------------------------------
Cephalon, Inc.(a) 394,000 21,128,250
---------------------------------------------------------------
Ciphergen Biosystems, Inc.(a) 147,300 4,566,300
---------------------------------------------------------------
Human Genome Sciences, Inc.(a) 250,000 22,097,656
---------------------------------------------------------------
IDEC Pharmaceuticals Corp.(a) 248,000 48,639,000
---------------------------------------------------------------
Incyte Genomics, Inc.(a) 1,098,500 40,232,562
---------------------------------------------------------------
Millennium Pharmaceuticals,
Inc.(a) 200,000 14,512,500
===============================================================
181,115,893
===============================================================
COMMUNICATIONS EQUIPMENT-14.91%
CIENA Corp.(a) 1,000,000 105,125,000
---------------------------------------------------------------
Corning Inc. 1,611,000 123,241,500
---------------------------------------------------------------
Finisar Corp.(a) 900,000 25,931,250
---------------------------------------------------------------
JDS Uniphase Corp.(a) 1,221,000 99,358,875
---------------------------------------------------------------
Redback Networks Inc.(a) 350,000 37,253,125
---------------------------------------------------------------
Scientific-Atlanta, Inc. 464,000 31,755,000
---------------------------------------------------------------
Sunrise Telecom Inc.(a) 388,400 9,661,450
---------------------------------------------------------------
Turnstone Systems, Inc.(a) 1,000,000 21,250,000
===============================================================
453,576,200
===============================================================
COMPUTERS (HARDWARE)-6.26%
Handspring, Inc.(a) 500,000 36,156,250
---------------------------------------------------------------
McDATA Corp.-Class B(a) 245,000 20,423,047
---------------------------------------------------------------
Palm, Inc.(a) 1,300,000 69,631,250
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 580,000 64,307,500
===============================================================
190,518,047
===============================================================
COMPUTERS (NETWORKING)-11.77%
Cisco Systems, Inc.(a) 1,900,000 102,362,500
---------------------------------------------------------------
Emulex Corp.(a) 130,000 19,093,750
---------------------------------------------------------------
Exodus Communications, Inc.(a) 857,500 28,779,844
---------------------------------------------------------------
Juniper Networks, Inc.(a) 850,000 165,750,000
---------------------------------------------------------------
VeriSign, Inc.(a) 320,000 42,240,000
===============================================================
358,226,094
===============================================================
COMPUTERS (PERIPHERALS)-12.24%
Brocade Communications Systems,
Inc.(a) 770,000 175,078,750
---------------------------------------------------------------
EMC Corp.(a) 900,000 80,156,250
---------------------------------------------------------------
Network Appliance, Inc.(a) 925,000 110,075,000
---------------------------------------------------------------
SanDisk Corp.(a) 133,000 7,146,672
===============================================================
372,456,672
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-15.85%
Ariba, Inc.(a) 403,000 50,929,125
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Art Technology Group, Inc.(a) 200,000 $ 12,550,000
---------------------------------------------------------------
BEA Systems, Inc.(a) 500,000 35,875,000
---------------------------------------------------------------
Blue Martini Software, Inc.(a) 262,700 9,884,087
---------------------------------------------------------------
i2 Technologies, Inc.(a) 136,000 23,120,000
---------------------------------------------------------------
Inktomi Corp.(a) 400,000 25,375,000
---------------------------------------------------------------
Oracle Corp.(a) 2,600,000 85,800,000
---------------------------------------------------------------
Siebel Systems, Inc.(a) 1,000,000 104,937,500
---------------------------------------------------------------
StorageNetworks, Inc.(a) 100,000 6,343,750
---------------------------------------------------------------
VERITAS Software Corp.(a) 727,800 102,631,172
---------------------------------------------------------------
WatchGuard Technologies, Inc.(a) 500,000 25,000,000
===============================================================
482,445,634
===============================================================
ELECTRICAL EQUIPMENT-0.22%
Stratos Lightwave, Inc.(a) 255,500 6,754,781
===============================================================
ELECTRONICS (INSTRUMENTATION)-1.13%
Alpha Industries, Inc.(a) 300,000 11,962,500
---------------------------------------------------------------
Newport Corp. 195,000 22,269,609
===============================================================
34,232,109
===============================================================
ELECTRONICS (SEMICONDUCTORS)-12.81%
Analog Devices, Inc.(a) 540,000 35,100,000
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 2,000,000 152,875,000
---------------------------------------------------------------
GlobeSpan, Inc.(a) 322,000 24,773,875
---------------------------------------------------------------
SDL, Inc.(a) 500,000 129,625,000
---------------------------------------------------------------
TranSwitch Corp.(a) 181,800 10,498,950
---------------------------------------------------------------
Triquint Semiconductor, Inc.(a) 965,800 37,002,213
===============================================================
389,875,038
===============================================================
EQUIPMENT (SEMICONDUCTOR)-2.82%
Broadcom Corp.-Class A(a) 386,100 85,858,988
===============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.61%
Genentech, Inc.(a) 224,000 18,480,000
===============================================================
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-0.96%
PE Corp-PE Biosystems Group 250,000 29,250,000
===============================================================
SERVICES (DATA PROCESSING)-0.39%
Paychex, Inc. 210,200 11,915,713
===============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-1.03%
Phone.com, Inc.(a) 340,000 31,471,250
===============================================================
Total Domestic Common Stocks
(Cost $2,011,888,892) 2,646,176,419
===============================================================
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS-9.50%
BERMUDA-0.70%
TyCom, Ltd. (Communications
Equipment)(a) 631,200 $ 21,145,200
===============================================================
CANADA-2.80%
Nortel Networks Corp.
(Communications Equipment) 384,008 17,373,766
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 400,000 67,800,000
===============================================================
85,173,766
===============================================================
HONG KONG-1.20%
China Mobile Ltd.
(Telecommunications-
Cellular/Wireless)(a) 5,700,000 36,543,146
===============================================================
ISRAEL-0.74%
Check Point Software Technologies
Ltd. (Computers-Software &
Services)(a) 142,300 22,536,763
===============================================================
JAPAN-2.20%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long
Distance) 2,001 18,210,081
---------------------------------------------------------------
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 1,760 43,389,085
---------------------------------------------------------------
Softbank Corp. (Computers-Software
& Services) 90,000 5,402,557
===============================================================
67,001,723
===============================================================
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SPAIN-0.66%
Telefonica S.A. (Telephone)(a) 1,058,409 $ 20,182,976
===============================================================
UNITED KINGDOM-1.20%
Vodafone Group PLC
(Telecommunications-
Cellular/Wireless) 8,754,003 36,433,193
===============================================================
Total Foreign Stocks
(Cost $141,309,176) 289,016,767
===============================================================
MONEY MARKET FUNDS-2.84%
STIC Liquid Assets Portfolio(b) 43,161,491 43,161,491
---------------------------------------------------------------
STIC Prime Portfolio(b) 43,161,491 43,161,491
===============================================================
Total Money Market Funds (Cost
$86,322,982) 86,322,982
===============================================================
TOTAL INVESTMENTS-99.29% (Cost
$2,239,521,050) 3,021,516,168
===============================================================
OTHER ASSETS LESS LIABILITIES-0.71% 21,660,320
===============================================================
NET ASSETS-100.00% $3,043,176,488
_______________________________________________________________
===============================================================
</TABLE>
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (Cost
$2,239,521,050) $3,021,516,168
-------------------------------------------------------------
Foreign currencies, at value (Cost
$17,659,876) 17,683,076
-------------------------------------------------------------
Receivables for:
Investments sold 18,787,376
-------------------------------------------------------------
Fund shares sold 6,152,844
-------------------------------------------------------------
Dividends 736,891
-------------------------------------------------------------
Collateral for securities loaned 266,427,893
-------------------------------------------------------------
Other assets 59,290
=============================================================
Total assets $3,331,363,538
=============================================================
LIABILITIES:
Payables for:
Investments purchased 10,705,737
-------------------------------------------------------------
Fund shares reacquired 5,041,200
-------------------------------------------------------------
Collateral upon return of securities loaned 266,427,893
-------------------------------------------------------------
Accrued advisory fees 2,503,768
-------------------------------------------------------------
Accrued administrative services fees 17,277
-------------------------------------------------------------
Accrued distribution fees 2,315,581
-------------------------------------------------------------
Accrued trustees' fees 5,562
-------------------------------------------------------------
Accrued transfer agent fees 789,774
-------------------------------------------------------------
Accrued operating expenses 380,258
=============================================================
Total liabilities 288,187,050
=============================================================
Net assets applicable to shares outstanding $3,043,176,488
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $1,513,595,156
_____________________________________________________________
=============================================================
Class B $1,414,914,649
_____________________________________________________________
=============================================================
Class C $ 114,666,683
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 49,453,461
_____________________________________________________________
=============================================================
Class B 48,513,942
_____________________________________________________________
=============================================================
Class C 3,932,626
_____________________________________________________________
=============================================================
Class A:
-------------------------------------------------------------
Net asset value and redemption price per
share $ 30.61
-------------------------------------------------------------
Offering price per share:
(Net asset value of $30.61 divided by
95.25%) $ 32.14
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 29.17
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 29.16
_____________________________________________________________
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$222,447) $ 48,231,809
------------------------------------------------------------
Dividends from affiliated money market funds 7,821,554
------------------------------------------------------------
Interest 68,831
------------------------------------------------------------
Security lending income 1,737,797
============================================================
Total investment income 57,859,991
============================================================
EXPENSES:
Advisory fees 29,880,111
------------------------------------------------------------
Administrative services fees 202,100
------------------------------------------------------------
Custodian fees 688,091
------------------------------------------------------------
Distribution fees -- Class A 8,206,803
------------------------------------------------------------
Distribution fees -- Class B 15,064,977
------------------------------------------------------------
Distribution fees -- Class C 878,420
------------------------------------------------------------
Transfer agent fees 5,525,139
------------------------------------------------------------
Trustees' fees 59,400
------------------------------------------------------------
Other 366,990
============================================================
Total expenses 60,872,031
============================================================
Less: Expenses paid indirectly (133,680)
------------------------------------------------------------
Net expenses 60,738,351
============================================================
Net investment income (loss) (2,878,360)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
------------------------------------------------------------
Net realized gain (loss) from:
Investment securities 420,256,806
------------------------------------------------------------
Foreign currencies (3,463,153)
------------------------------------------------------------
Option contracts written 2,354,362
============================================================
419,148,015
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (13,360,812)
------------------------------------------------------------
Foreign currencies (201,016)
============================================================
(13,561,828)
============================================================
Net gain on investment securities, foreign
currencies and option contracts 405,586,187
============================================================
Net increase in net assets resulting from
operations $402,707,827
____________________________________________________________
============================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (2,878,360) $ (21,958,347)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 419,148,015 299,698,355
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (13,561,828) 537,434,434
==============================================================================================
Net increase in net assets resulting from operations 402,707,827 815,174,442
==============================================================================================
Distributions to shareholders from net realized gains:
Class A (122,942,635) (23,149,236)
----------------------------------------------------------------------------------------------
Class B (112,289,611) (21,143,550)
----------------------------------------------------------------------------------------------
Class C (2,428,890) --
----------------------------------------------------------------------------------------------
Advisor Class* (257,983) (150,968)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 376,834,670 (101,952,900)
----------------------------------------------------------------------------------------------
Class B 447,353,903 (72,208,921)
----------------------------------------------------------------------------------------------
Class C 121,591,284 11,141,603
----------------------------------------------------------------------------------------------
Advisor Class* (2,868,709) (5,609,698)
==============================================================================================
Net increase in net assets 1,107,699,856 602,100,772
==============================================================================================
NET ASSETS:
Beginning of year 1,935,476,632 1,333,375,860
==============================================================================================
End of year $3,043,176,488 $1,935,476,632
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $1,873,542,848 $ 863,973,212
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) -- 5,534
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 387,652,541 275,954,959
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 781,981,099 795,542,927
==============================================================================================
$3,043,176,488 $1,935,476,632
______________________________________________________________________________________________
==============================================================================================
* Advisor Class shares were converted to Class A shares effective as of the close of business
on February 11, 2000.
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
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 nine separate series portfolios, each having an unlimited
number of shares of beneficial interest. The Fund currently offers three
different classes of shares: Class A shares, Class B shares and Class C shares.
The Fund formerly offered Advisor Class shares; however, as of the close of
business on February 11, 2000 the Advisor Class shares were converted to Class A
shares. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Advisor
Class shares were sold without a sales charge. Matters affecting each portfolio
or class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is long-term growth of
capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available or are questionable are valued at fair
value as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$2,872,826, undistributed net realized gains decreased by $69,531,314 and
paid in capital increased by $66,658,488 as a result of book/tax differences
due to utilization of a portion of the proceeds from redemptions as
distributions for federal income tax purposes, foreign currency transactions
and net operating loss reclassifications. Net assets of the Fund were
unaffected by the reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into
11
<PAGE> 14
U.S. dollar amounts on the respective dates of such transactions. The Fund
does not separately account for the portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The 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.
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded as an asset and an
equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
H. 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.
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 total annual operating expenses (excluding
interest, taxes, dividend expense on short sales, extraordinary items and
increases in expenses due to offset arrangements, if any) for Class A, Class B
and Class C shares to 2.00%, 2.50% and 2.50%, respectively.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended October 31, 2000, AIM was
paid $202,100 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, 2000, AFS was
paid $3,251,404 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% 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, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $8,206,803,
$15,064,977 and $878,420, respectively, as compensation under the Plans.
AIM Distributors received commissions of $1,575,107 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended
12
<PAGE> 15
October 31, 2000, AIM Distributors received $99,517 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
For the year ended October 31, 2000, the Fund received reductions in transfer
agency fees from AFS (an affiliate of AIM) of $43,852 and reductions in
custodian fees of $89,828 under expense offset arrangements which resulted in a
reduction of the Fund's total expenses of $133,680.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended October 31,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to not less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $261,203,817 were
on loan to brokers. The loans were secured by cash collateral of $266,427,893
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $1,737,797 for securities lending.
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, 2000 was
$4,037,708,251 and $3,385,749,431, respectively.
The amount of unrealized appreciation (depreciation)of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 881,084,993
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (101,792,957)
=========================================================
Net unrealized appreciation of investment
securities $ 779,292,036
_________________________________________________________
=========================================================
Cost of investments for tax purposes is $2,242,224,132.
</TABLE>
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999
were as follows:
<TABLE>
<CAPTION>
2000 1999
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 15,814,510 $ 575,875,480 42,637,825 $ 826,757,794
-------------------------------------------------------------------------------------------------------------------------
Class B 17,939,437 618,630,557 6,195,698 131,627,637
-------------------------------------------------------------------------------------------------------------------------
Class C* 4,043,413 141,415,869 544,069 12,490,317
-------------------------------------------------------------------------------------------------------------------------
Advisor Class** 92,071 3,241,706 664,975 14,200,299
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 3,700,530 113,714,341 1,233,567 21,142,757
-------------------------------------------------------------------------------------------------------------------------
Class B 3,497,829 102,890,796 1,176,293 19,479,129
-------------------------------------------------------------------------------------------------------------------------
Class C* 70,053 2,060,345 -- --
-------------------------------------------------------------------------------------------------------------------------
Advisor Class** 7,925 250,992 8,588 150,375
=========================================================================================================================
Conversion of Advisor Class shares to Class A shares***
Class A 157,592 6,147,658 -- --
-------------------------------------------------------------------------------------------------------------------------
Advisor Class (152,813) (6,147,658) -- --
=========================================================================================================================
Reacquired:
Class A (8,920,012) (318,902,809) (49,011,051) (949,853,451)
-------------------------------------------------------------------------------------------------------------------------
Class B (8,251,217) (274,167,450) (11,052,108) (223,315,687)
-------------------------------------------------------------------------------------------------------------------------
Class C* (666,660) (21,884,930) (58,249) (1,348,714)
-------------------------------------------------------------------------------------------------------------------------
Advisor Class** (6,114) (213,749) (900,945) (19,960,372)
=========================================================================================================================
27,326,544 $ 942,911,148 (8,561,338) $(168,629,916)
_________________________________________________________________________________________________________________________
=========================================================================================================================
</TABLE>
* Class C shares commenced sales on March 1, 1999.
** Advisor Class share activity for the period November 1, 1999 through
February 11, 2000 (date of conversion).
*** Effective as of the close of business February 11, 2000, pursuant to
approval by the Board of Trustees on November 3, 1999, all outstanding
shares of Advisor Class shares were converted to Class A shares of the fund.
13
<PAGE> 16
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are
summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
<S> <C> <C>
Beginning of year -- $ --
--------------------------------------------------------------------------------------
Written 6,250 5,281,438
--------------------------------------------------------------------------------------
Closed (5,250) (4,026,952)
--------------------------------------------------------------------------------------
Expired (1,000) (1,254,486)
======================================================================================
End of year -- $ --
______________________________________________________________________________________
======================================================================================
</TABLE>
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2000(a) 1999 1998(a) 1997(a) 1996(a)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 26.44 $ 16.28 $ 18.04 $ 16.69 $ 16.42
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.06(b) (0.25) (0.17) (0.17) (0.13)
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 7.23 10.97 (0.39) 2.93 1.22
======================================================================================================================
Total from investment operations 7.29 10.72 (0.56) 2.76 1.09
======================================================================================================================
Less distributions from net realized gains (3.12) (0.56) (1.20) (1.41) (0.82)
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.61 $ 26.44 $ 16.28 $ 18.04 $ 16.69
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(c) 27.52% 67.63% (3.16)% 17.70% 7.00%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,513,595 $1,023,124 $713,904 $910,801 $1,204,428
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets 1.63%(d) 1.77% 1.88% 1.84% 1.79%
======================================================================================================================
Ratio of net investment income (loss) to average net assets 0.16%(d) (1.11)% (0.93)% (1.06)% (0.89)%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 111% 122% 75% 35% 37%
______________________________________________________________________________________________________________________
======================================================================================================================
</TABLE>
(a)Calculated using average shares outstanding.
(b)Net investment income per share reflects dividend income recognized from the
spin-off of Nortel Networks Corp. from BCE, Inc. of $0.49 per share.
(c)Does not include sales charges.
(d)Ratios are based on average daily net assets of $1,641,360,557.
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2000(a) 1999 1998(a) 1997(a) 1996(a)
---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.43 $ 15.76 $ 17.58 $ 16.37 $ 16.20
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11)(b) (0.35) (0.25) (0.25) (0.23)
--------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.97 10.58 (0.37) 2.87 1.22
==========================================================================================================================
Total from investment operations 6.86 10.23 (0.62) 2.62 0.99
==========================================================================================================================
Less distributions from net realized gains (3.12) (0.56) (1.20) (1.41) (0.82)
==========================================================================================================================
Net asset value, end of period $ 29.17 $ 25.43 $ 15.76 $ 17.58 $ 16.37
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(c) 26.87% 66.84% (3.67)% 17.15% 6.46%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,414,915 $898,400 $614,715 $805,535 $1,007,654
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets 2.13%(d) 2.28% 2.38% 2.34% 2.29%
==========================================================================================================================
Ratio of net investment income (loss) to average net assets (0.34)%(d) (1.62)% (1.43)% (1.56)% (1.39)%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 111% 122% 75% 35% 37%
__________________________________________________________________________________________________________________________
==========================================================================================================================
</TABLE>
(a)Calculated using average shares outstanding.
(b)Net investment income per share reflects dividend income recognized from the
spin-off of Nortel Networks Corp. from BCE, Inc. of $0.49 per share.
(c)Does not include contingent deferred sales charges.
(d)Ratios are based on average daily net assets of $1,506,497,660.
<TABLE>
<CAPTION>
CLASS C
-----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED)
OCTOBER 31, TO OCTOBER 31,
2000(a) 1999
----------- --------------
<S> <C> <C>
Net asset value, beginning of period $ 25.43 $ 19.23
-------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(b) (0.11)(b) (0.11)
-------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.96 6.31
===========================================================================================
Total from investment operations 6.85 6.20
===========================================================================================
Less distributions from net realized gains (3.12) --
===========================================================================================
Net asset value, end of period $ 29.16 $ 25.43
___________________________________________________________________________________________
===========================================================================================
Total return(c) 26.83% 32.24%
___________________________________________________________________________________________
===========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $114,667 $12,352
___________________________________________________________________________________________
===========================================================================================
Ratio of expenses to average net assets 2.13%(d) 2.28%(e)
===========================================================================================
Ratio of net investment income (loss) to average net assets (0.34)%(d) (1.62)%(e)
___________________________________________________________________________________________
===========================================================================================
Portfolio turnover rate 111% 122%
___________________________________________________________________________________________
===========================================================================================
</TABLE>
(a)Calculated using average shares outstanding.
(b)Net investment income per share reflects dividend income recognized from the
spin-off of Nortel Networks Corp. from BCE, Inc. of $0.49 per share.
(c)Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(d)Ratios are based on average daily net assets of $87,842,049.
(e)Annualized.
15
<PAGE> 18
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, 2000, and the results of its operations, the
changes in its net assets and the financial highlights
for the periods indicated, in conformity with accounting
principles generally accepted in the United States of
America. 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 auditing standards generally accepted in
the United States of America 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, 2000
by correspondence with the custodian and brokers, provide
a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 18, 2000
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
Senior Managing Partner, Chairman and President Suite 100
Plantagenet Capital Houston, TX 77046
Management, LLC (an investment Dana R. Sutton
partnership); Chief Executive Officer, Vice President and Treasurer INVESTMENT MANAGER
Plantagenet Holdings, Ltd.
(an investment banking firm) Melville B. Cox A I M Advisors, Inc.
Vice President 11 Greenway Plaza
Frank S. Bayley Suite 100
Partner, law firm of Gary T. Crum Houston, TX 77046
Baker & McKenzie Vice President
TRANSFER AGENT
Robert H. Graham Carol F. Relihan
President and Chief Executive Officer, Vice President and Secretary A I M Fund Services, Inc.
A I M Management Group Inc. P.O. Box 4739
Mary J. Benson Houston, TX 77210-4739
Ruth H. Quigley Assistant Vice President and
Private Investor Assistant Treasurer CUSTODIAN
Sheri Morris State Street Bank and Trust Company
Assistant Vice President and 225 Franklin Street
Assistant Treasurer Boston, MA 02110
Nancy L. Martin COUNSEL TO THE FUND
Assistant Secretary
Kirkpatrick & Lockhart LLP
Ofelia M. Mayo 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Kathleen J. Pflueger COUNSEL TO THE TRUSTEES
Assistant Secretary
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 Street
Boston, MA 02110
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION -- UNAUDITED
Of ordinary dividends paid to shareholders during the Fund's tax year ended
October 31, 2000, 3.26% is eligible for the dividends received deduction for
corporations. The Fund also distributed long-term capital gains of $228,777,770
for the Fund's tax year ended October 31, 2000 of which 100% is 20% rate gain.
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
EQUITY FUNDS
<TABLE>
<S> <C> <C>
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS A I M Management Group Inc. has provided
leadership in the mutual fund industry
MORE AGGRESSIVE MORE AGGRESSIVE since 1976 and managed approximately
$183 billion in assets for more than eight
AIM Small Cap Opportunities(1) AIM Latin American Growth million shareholders, including
AIM Mid Cap Opportunities(2) AIM Developing Markets individual investors, corporate clients
AIM Large Cap Opportunities(3) AIM European Small Company and financial institutions, as of
AIM Emerging Growth AIM Asian Growth September 30, 2000.
AIM Small Cap Growth(4) AIM Japan Growth The AIM Family of Funds--Registered
AIM Aggressive Growth AIM International Emerging Growth Trademark-- is distributed nationwide,
AIM Mid Cap Growth AIM European Development and AIM today is the eighth-largest
AIM Small Cap Equity AIM Euroland Growth mutual fund complex in the United States
AIM Capital Development AIM Global Aggressive Growth in assets under management, according to
AIM Constellation AIM International Equity Strategic Insight, an independent mutual
AIM Dent Demographic Trends AIM Advisor International Value fund monitor.
AIM Select Growth AIM Global Trends AIM is a subsidiary of AMVESCAP PLC,
AIM Large Cap Growth AIM Global Growth one of the world's largest independent
AIM Weingarten financial services companies with $414
AIM Mid Cap Equity MORE CONSERVATIVE billion in assets under management as of
AIM Value II September 30, 2000.
AIM Charter SECTOR EQUITY FUNDS
AIM Value
AIM Blue Chip MORE AGGRESSIVE
AIM Basic Value
AIM Large Cap Basic Value AIM New Technology
AIM Balanced AIM Global Telecommunications and Technology
AIM Advisor Flex AIM Global Resources
AIM Global Financial Services
MORE CONSERVATIVE AIM Global Health Care
AIM Global Consumer Products and Services
AIM Global Infrastructure
AIM Advisor Real Estate
AIM Global Utilities
MORE CONSERVATIVE
FIXED-INCOME FUNDS
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Strategic Income AIM High Income Municipal
AIM High Yield II AIM Tax-Exempt Bond of Connecticut
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate
AIM Global Income AIM Tax-Exempt Cash
AIM Floating Rate(5)
AIM Intermediate Government MORE CONSERVATIVE
AIM Limited Maturity Treasury
AIM Money Market
MORE CONSERVATIVE
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from more
aggressive to more conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Large Cap Opportunities Fund closed to
new investors Sept. 29, 2000. (4) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (5) AIM Floating Rate Fund was restructured to offer
multiple share classes April 3, 2000. Existing shares were converted to Class B
shares, and Class C shares commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES
AND EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used as
sales material after Jan. 20, 2001, this report must be accompanied by a fund
Performance & Commentary or by an AIM Quarterly Review of Performance for the
most recent quarter end.
[DALBAR LOGO APPEARS HERE] [AIM LOGO APPEARS HERE]
--Registered Trademark--
INVEST WITH DISCIPLINE
--Registered Trademark--
GTL-AR-1
A I M Distributors, Inc.
