<PAGE> 1
ANNUAL REPORT / OCTOBER 31 2000
AIM GLOBAL FINANCIAL SERVICES FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
THE BANKER AND HIS WIFE BY QUENTIN METSYS
THE WORLD'S EARLIEST BANKS CAME ABOUT WHEN PEOPLE PRESENTED THEIR
FORTUNES FOR SAFEKEEPING TO THOSE THEY COULD TRUST, USUALLY GOLDSMITHS.
THE GOLDSMITHS WOULD ISSUE A NOTE THAT OFFERED TO PAY THE BEARER THE
VALUE OF THE COINS DEPOSITED. THESE NOTES WERE OFTEN EXCHANGED AND
CIRCULATED, RATHER THAN CASHED IN, AND THE GOLDSMITHS PROFITED BY
CHARGING INTEREST ON THE LOANS THEY GRANTED USING THE GOLD AND SILVER
IN THEIR POSSESSION.
-------------------------------------
AIM Global Financial Services Fund is for shareholders seeking long-term growth
of capital by investing primarily in the equity securities of financial-services
companies, including those engaged in banking, insurance, investment management,
brokerage and diversified financial activities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Financial Services 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
$4.1822 per Class A share and $4.0692 per Class B and Class C share.
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 The fund's average annual total returns as of the close of the reporting
period are shown in a table on the performance history page that follows. In
addition, industry regulations require us to provide average annual total
returns (including sales charges) as of 9/30/00, the most recent calendar
quarter-end, which were: Class A shares, one year, 38.63%; five years,
21.48%; inception (5/31/94), 17.72%. Class B shares, one year, 39.79%; five
years, 21.89%; inception (5/31/94), 18.05%. Class C shares, one year,
43.79%; inception (3/1/99), 28.68%.
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.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Financial Services Fund Index represents an average of
the 10 largest financial-services funds tracked by Lipper, Inc., an
independent mutual fund performance monitor.
o The unmanaged MSCI All Country (AC) World Index is a group of global
securities traded on more than 50 markets in developed and emerging
countries tracked by Morgan Stanley Capital International.
o The unmanaged 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 FINANCIAL SERVICES 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 FINANCIAL SERVICES FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FINANCIAL STOCKS GAIN FAVOR DURING MARKET UNCERTAINTY
THE STOCK MARKET HAS BEEN QUITE VOLATILE FOR MOST OF THE PAST YEAR. HOW DID AIM
GLOBAL FINANCIAL SERVICES FUND PERFORM?
With interest-rate concerns abating, AIM Global Financial Services Fund has
reaped the benefits of the resurgence of financial stocks. For the fiscal year
ended October 31, 2000, the fund posted total returns of 30.06% for Class A
shares, 29.40% for Class B shares and 29.40% for Class C shares. (These returns
are at net asset value, which does not include sales charges.)
The fund far outperformed the MSCI AC World Index, which had a return of
0.85% for the same one-year period, and the Lipper Financial Services Fund
Index, with a return of 12.07% for the fiscal year. Net assets in the fund shot
up from $81.9 million to $208.7 million during the fiscal year.
WHAT WAS THE MARKET ENVIRONMENT LIKE DURING THE PAST 12 MONTHS?
Markets rallied strongly during the first half of the fiscal year, but
experienced a choppy, downward trend in the second half. In late 1999 and early
2000, technology stocks led the surge, with the tech-laden Nasdaq soaring to
record levels well into March. However, investor concern about possible
overvaluations sparked a sharp tech sell-off late in the month. Investors were
also concerned that the Federal Reserve Board (the Fed) would keep raising
interest rates to slow torrid economic growth and to contain inflation. The
ensuing sell-off affected nearly every stock-market sector in April and caused
severe market volatility.
Amid mounting evidence that economic growth was slowing, markets rallied in
May and June at the prospect of no more Fed rate hikes. Indeed, the Fed left
interest rates unchanged for the rest of the fiscal year. However, in late
summer and early fall, a combination of rising oil prices, unrest in the Middle
East and concern about corporate earnings created another steep market decline.
A number of major corporations reported earnings disappointments in September
and October, as rising oil prices and a weak euro negatively affected profit
margins.
Major market indexes such as the Nasdaq peaked fairly early in 2000, and as
of the close of the fiscal year they had not regained those levels. Even so,
most market indexes recorded gains for the 12-month reporting period. After tech
stocks faded, stocks in several other sectors--including financial services,
health care, energy and utilities--posted healthy gains. Mid-cap stocks
outperformed large- and small-cap stocks. And while growth stocks outperformed
value stocks during the first half of the year, value made a comeback in the
second half, leaving growth behind.
HOW DID THE MARKET ENVIRONMENT AFFECT FINANCIAL STOCKS?
The financial sector has benefited from the leveling off of interest rates and
the broadening of the general market. As growth in the sector has started
to accelerate--coupled with what is seen as a positive environment for
financials--more investors have moved into the sector. Financials have also been
viewed as an attractive, more stable option for investors looking to mitigate
some of the market's volatility, especially among tech stocks.
Additionally, the financial sector continues to gain from consolidation,
which is being driven by the belief that size and scale are necessary to compete
in the global market. Such consolidation has not just been happening among U.S.
financial companies. Indeed, European companies have been buying up U.S. asset
managers
================================================================================
FUND PERFORMANCE
FUND OUTPERFORMS INDEXES
For fiscal year ending 10/31/00, excluding
sales charges
================================================================================
FUND CLASS A SHARES 30.06%
FUND CLASS B SHARES 29.40%
FUND CLASS C SHARES 29.40%
MSCI AC WORLD INDEX 0.85%
LIPPER FINANCIAL SERVICES FUND INDEX 12.07%
================================================================================
GROWTH OF NET ASSETS
10/31/99-10/31/00, in millions
================================================================================
10/31/99 $ 81.9
10/31/00 $208.7
================================================================================
-------------------------------------
WITH INTEREST-RATE CONCERNS
ABATING, AIM GLOBAL
FINANCIAL SERVICES FUND
HAS REAPED THE BENEFITS
OF THE RESURGENCE OF
FINANCIAL STOCKS.
-------------------------------------
See important fund and index disclosures inside front cover.
AIM GLOBAL FINANCIAL SERVICES FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
left and right during 2000 to gain entry into U.S. markets and also to add
money-managing expertise to their domestic offerings.
All these factors have contributed to positive momentum among financial
stocks. Still, within the sector there has been some diversion of performance.
For example, trust and custody banks have greatly benefited from the outsourcing
trend both in the United States and overseas, and asset managers have been
buoyed by consolidation and investors' flight to their more stable earnings
stream. Conversely, traditional regional banks have been dragged down by
burgeoning unease regarding credit problems in their loan portfolios.
HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
We continued to focus on those areas in the financial sector where we see the
most growth, such as asset managers, brokerage firms, investment banks and
custody and trust banks. The earnings growth that led us to companies in these
groups continued to be strong, and the market rewarded them with improving
valuations that contributed to the fund's performance.
The fund was still underweighted in regional banks because of earnings and
performance weakness in that group. Our small weighting in foreign stocks is
virtually unchanged from a year ago as we continue to find the best fundamentals
in U.S. companies.
WHAT WERE SOME COMPANIES YOU FAVORED?
Among brokerages, we liked the venerable Lehman Brothers, the country's
third-largest brokerage firm. The company reported a 58% jump in
third-quarter profits, boosted by stock and bond trading, strong IPO markets in
the United States and strong capital markets in Europe.
Marsh & McLennan, the world's largest insurance brokerage and a fund
holding, also performed well. The company reported a 26% rise in third-quarter
earnings over the previous year, boosted by its asset management division and
its core insurance operation.
Among the major banks we liked was Bank of New York. One of the nation's
largest banks, Bank of New York saw its third-quarter profits rise 16% on the
strength of its loan operations and foreign exchange trading.
New to our list of top holdings is Concord EFS. As a supplier of
the infrastructure for cashless commerce, Concord EFS provides electronic
payment and verification terminals and processes credit and debit card
transactions for retailers. The company reported a 38% rise in third-quarter
revenue over the previous year.
WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
The economic climate appeared favorable for stocks at the close of the
reporting period despite often-extreme market volatility. The nation's
unemployment rate had fallen to its lowest level in three decades. Consumer
spending, down for much of the second half of the fiscal year, started to pick
up again. And inflation was moderate despite higher oil prices.
Many analysts argue that the fundamentals for financials, such as earnings
growth, are so powerful that such stocks could continue to outpace the market in
the long run. If the economy makes its soft landing (as it now appears poised to
do) and interest rates remain stable, financial-services companies should
benefit and their stocks should remain strong, an environment in which the fund
should continue to flourish.
================================================================================
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
As of 10/31/00, based on total net assets
========================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Bank of New York Co., Inc. (The) 4.33% 1. Investment Banking/Brokerage 15.90%
2. Citigroup Inc. 4.05 2. Financial (Diversified) 15.68
3. Investors Financial Services Corp. 3.81 3. Banks (Major Regional) 14.68
4. Marsh & McLennan Cos., Inc. 3.52 4. Investment Management 8.55
5. Chase Manhattan Corp. (The) 3.25 5. Insurance Brokers 5.96
6. Lehman Brothers Holdings Inc. 3.25 6. Consumer Finance 5.86
7. American International Group, Inc. 2.99 7. Services (Data Processing) 4.65
8. Morgan Stanley Dean Witter & Co. 2.66 8. Banks (Money Center) 4.60
9. Concord EFS, Inc. 2.65 9. Insurance (Multi-Line) 3.75
10. American Express Co. 2.59 10. Banks (Regional) 3.16
The fund's portfolio composition is subject to change, and there is no assurance
that the fund will continue to hold any particular security.
========================================================================================================
</TABLE>
-------------------------------------
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 read-
ing 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 FINANCIAL SERVICES FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM GLOBAL FINANCIAL SERVICES FUND VS. BENCHMARK INDEX
5/31/94-10/31/00
in thousands
================================================================================
AIM Global Financial AIM Global Financial MSCI AC
Date Services Fund, Class A Shares Services Fund, Class B Shares World Index
--------------------------------------------------------------------------------
5/31/94 9525 10000 10000
10/94 9683 10149 10574.6
10/95 9933 10350 11327.7
10/96 11941 12401 13095.3
10/97 15513 16013 15156.9
10/98 15905 16346 17090.9
10/99 21729 22216 21604.2
10/00 28260 28747 21788
$28260 $28747 $21788
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
This chart compares your fund's Class A and Class B shares to a benchmark index.
It is intended to give you an idea of how your fund performed compared to this
benchmark over the period 5/31/94-10/31/00. It is important to understand the
differences between your fund and an index. An index measures the performance of
a hypothetical portfolio. A market index such as the MSCI AC World Index is not
managed, incurring no sales charges, expenses or fees. If you could buy all the
securities that make up a market index, you would incur expenses that
would affect your investment's return.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/00, including sales charges
================================================================================
CLASS A SHARES
Inception (5/31/94) 17.57%
5 Years 22.07
1 Year 23.87*
*30.06% excluding sales charges
CLASS B SHARES
Inception (5/31/94) 17.88%
5 Years 22.49
1 Year 24.40*
*29.40% excluding CDSC
CLASS C SHARES
Inception (3/1/99) 27.42%
1 Year 28.40*
*29.40% 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 different sales-charge structure and class
expenses. For fund performance calculations and a description of the index cited
on this page, please see the inside front cover.
AIM GLOBAL FINANCIAL SERVICES FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-85.53%
BANKS (MAJOR REGIONAL)-13.22%
Bank of New York Co., Inc. (The) 157,000 $ 9,037,312
---------------------------------------------------------------
FleetBoston Financial Corp. 130,000 4,940,000
---------------------------------------------------------------
Mellon Financial Corp. 47,000 2,267,750
---------------------------------------------------------------
PNC Financial Services Group 39,000 2,608,125
---------------------------------------------------------------
State Street Corp. 27,000 3,367,980
---------------------------------------------------------------
Wells Fargo Co. 116,000 5,372,250
===============================================================
27,593,417
===============================================================
BANKS (MONEY CENTER)-3.78%
Bank of America Corp. 23,000 1,105,437
---------------------------------------------------------------
Chase Manhattan Corp. (The) 149,000 6,779,500
===============================================================
7,884,937
===============================================================
BANKS (REGIONAL)-1.96%
Firstar Corp. 121,000 2,382,187
---------------------------------------------------------------
Silicon Valley Bancshares(a) 37,000 1,711,250
===============================================================
4,093,437
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-1.50%
Henry (Jack) & Associates 30,000 1,650,000
---------------------------------------------------------------
Intuit Inc.(a) 24,000 1,474,500
===============================================================
3,124,500
===============================================================
CONSUMER FINANCE-5.86%
Capital One Financial Corp. 78,000 4,923,750
---------------------------------------------------------------
MBNA Corp. 96,000 3,606,000
---------------------------------------------------------------
Providian Financial Corp. 35,600 3,702,400
===============================================================
12,232,150
===============================================================
ELECTRICAL EQUIPMENT-1.55%
General Electric Co. 59,000 3,233,937
===============================================================
FINANCIAL (DIVERSIFIED)-14.96%
American Express Co. 90,000 5,400,000
---------------------------------------------------------------
Associates First Capital
Corp.-Class A 25,000 928,125
---------------------------------------------------------------
Citigroup Inc. 160,666 8,455,048
---------------------------------------------------------------
Fannie Mae 33,500 2,579,500
---------------------------------------------------------------
Freddie Mac 44,000 2,640,000
---------------------------------------------------------------
J.P. Morgan & Co., Inc. 28,000 4,634,000
---------------------------------------------------------------
PMI Group, Inc. (The) 31,500 2,327,062
---------------------------------------------------------------
SEI Investments Co. 47,000 4,265,250
===============================================================
31,228,985
===============================================================
INSURANCE (LIFE/HEALTH)-2.49%
AFLAC, Inc. 59,000 4,310,687
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INSURANCE (LIFE/HEALTH)-(CONTINUED)
Nationwide Financial Services,
Inc.-Class A 18,000 $ 875,250
===============================================================
5,185,937
===============================================================
INSURANCE (MULTI-LINE)-2.99%
American International Group,
Inc. 63,750 6,247,500
===============================================================
INSURANCE (PROPERTY-CASUALTY)-2.14%
Radian Group Inc. 63,000 4,465,125
===============================================================
INSURANCE BROKERS-5.96%
Aon Corp. 123,000 5,096,813
---------------------------------------------------------------
Marsh & McLennan Cos., Inc. 56,200 7,348,150
===============================================================
12,444,963
===============================================================
INVESTMENT BANKING/BROKERAGE-15.14%
Goldman Sachs Group, Inc. (The) 43,000 4,291,938
---------------------------------------------------------------
Legg Mason, Inc. 72,000 3,739,500
---------------------------------------------------------------
Lehman Brothers Holdings, Inc. 105,200 6,785,400
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 54,000 3,780,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 69,200 5,557,623
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 75,300 2,644,913
---------------------------------------------------------------
TD Waterhouse Group, Inc.(a) 147,000 2,434,688
---------------------------------------------------------------
Waddell & Reed Financial,
Inc.-Class A 74,000 2,358,750
===============================================================
31,592,812
===============================================================
INVESTMENT MANAGEMENT-7.64%
Affiliated Managers Group,
Inc.(a) 21,000 1,262,625
---------------------------------------------------------------
Alliance Capital Management
Holding L.P. 45,000 2,160,000
---------------------------------------------------------------
Investors Financial Services
Corp. 111,000 7,957,313
---------------------------------------------------------------
Stilwell Financial, Inc. 101,700 4,557,431
===============================================================
15,937,369
===============================================================
SAVINGS & LOAN COMPANIES-1.69%
Golden West Financial Corp. 63,000 3,531,938
===============================================================
SERVICES (DATA PROCESSING)-4.65%
Concord EFS, Inc.(a) 134,000 5,535,875
---------------------------------------------------------------
First Data Corp. 83,000 4,160,375
===============================================================
9,696,250
===============================================================
Total Domestic Common Stocks
(Cost $131,621,239) 178,493,257
===============================================================
FOREIGN STOCKS-8.32%
BERMUDA-1.15%
ACE Ltd.
(Insurance-Property-Casualty) 61,000 2,394,250
===============================================================
CANADA-0.81%
AGF Management Ltd.-Class B
(Investment Management) 101,000 1,679,696
===============================================================
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS-(CONTINUED)
FRANCE-1.56%
Assurances Generales de France
(Insurance-Multi-Line) 28,700 $ 1,570,975
---------------------------------------------------------------
BNP Paribas (Banks-Major
Regional) 7,500 646,671
---------------------------------------------------------------
Societe Generale-Class A
(Banks-Major Regional) 18,200 1,033,299
===============================================================
3,250,945
===============================================================
GERMANY-0.30%
Tecis Holding A.G.
(Computers-Software & Services) 8,600 621,823
===============================================================
HONG KONG-1.19%
Dah Sing Financial Group
(Banks-Regional) 580,800 2,494,781
===============================================================
JAPAN-0.76%
Nikko Securities Co., Ltd. (The)
(Investment Banking/Brokerage) 94,000 811,511
---------------------------------------------------------------
Nomura Securities Co., Ltd.
(Investment Banking/Brokerage) 37,000 784,998
===============================================================
1,596,509
===============================================================
MEXICO-0.72%
Grupo Financiero Banamex Accival,
S.A. de C.V. (Banacci)
(Financial-Diversified)(a) 966,000 1,501,230
===============================================================
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-0.36%
Aegon N.V.
(Insurance-Life/Health) 18,526 $ 747,987
===============================================================
SINGAPORE-0.82%
DBS Group Holdings Ltd.
(Banks-Money Center) 146,040 1,721,248
===============================================================
SWITZERLAND-0.22%
Julius Baer Holding A.G.-Class B
(Banks-Major Regional) 95 470,428
===============================================================
UNITED KINGDOM-0.43%
Royal Bank of Scotland Group PLC
(Banks-Major Regional) 39,600 889,145
===============================================================
Total Foreign Stocks (Cost
$14,601,545) 17,368,042
===============================================================
MONEY MARKET FUNDS-7.60%
STIC Liquid Assets Portfolio(b) 7,926,160 7,926,160
---------------------------------------------------------------
STIC Prime Portfolio(b) 7,926,160 7,926,160
===============================================================
Total Money Market Funds (Cost
$15,852,320) 15,852,320
===============================================================
TOTAL INVESTMENTS-101.45% (Cost $162,075,104) 211,713,619
---------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS-(1.45%) (3,033,418)
---------------------------------------------------------------
NET ASSETS-100.00% $ 208,680,201
_______________________________________________________________
===============================================================
</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.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$162,075,104) $211,713,619
------------------------------------------------------------
Receivables for:
Investments sold 1,392,553
------------------------------------------------------------
Fund shares sold 2,114,208
------------------------------------------------------------
Dividends 254,728
------------------------------------------------------------
Collateral for securities loaned 82,365
------------------------------------------------------------
Other assets 24,315
============================================================
Total assets $215,581,788
============================================================
LIABILITIES:
Payables for:
Investments purchased 6,009,453
------------------------------------------------------------
Fund shares reacquired 247,962
------------------------------------------------------------
Collateral upon return of securities loaned 82,365
------------------------------------------------------------
Accrued advisory fees 222,630
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 144,076
------------------------------------------------------------
Accrued trustees' fees 916
------------------------------------------------------------
Accrued transfer agent fees 42,714
------------------------------------------------------------
Accrued operating expenses 147,236
============================================================
Total liabilities 6,901,587
============================================================
Net assets applicable to shares outstanding $208,680,201
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 95,393,307
____________________________________________________________
============================================================
Class B $ 92,342,864
____________________________________________________________
============================================================
Class C $ 20,944,030
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 3,838,859
____________________________________________________________
============================================================
Class B 3,825,860
____________________________________________________________
============================================================
Class C 867,729
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 24.85
------------------------------------------------------------
Offering price per share:
(Net asset value of $24.85 divided by
95.25%) $ 26.09
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 24.14
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 24.14
____________________________________________________________
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$22,386) $ 1,332,092
------------------------------------------------------------
Dividends from affiliated money market funds 690,406
------------------------------------------------------------
Interest 1,441
------------------------------------------------------------
Security lending income 13,796
============================================================
Total investment income 2,037,735
============================================================
EXPENSES:
Advisory fees 1,192,263
------------------------------------------------------------
Administrative services fees 50,000
------------------------------------------------------------
Custodian fees 27,220
------------------------------------------------------------
Distribution fees -- Class A 270,409
------------------------------------------------------------
Distribution fees -- Class B 601,612
------------------------------------------------------------
Distribution fees -- Class C 76,274
------------------------------------------------------------
Transfer agent fees 301,421
------------------------------------------------------------
Trustees' fees 9,675
------------------------------------------------------------
Other 251,024
============================================================
Total expenses 2,779,898
============================================================
Less: Expense reimbursement (2,650)
------------------------------------------------------------
Expenses paid indirectly (1,819)
============================================================
Net expenses 2,775,429
============================================================
Net investment income (loss) (737,694)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES AND
OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 3,538,391
------------------------------------------------------------
Foreign currencies (41,849)
------------------------------------------------------------
Option contracts written 31,268
============================================================
3,527,810
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 31,447,967
------------------------------------------------------------
Foreign currencies (9,885)
============================================================
31,438,082
============================================================
Net gain from investment securities, foreign
currencies and option contracts 34,965,892
============================================================
Net increase in net assets resulting from
operations $34,228,198
____________________________________________________________
============================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT 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) $ (737,694) $ (280,309)
------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 3,527,810 18,854,118
------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 31,438,082 8,883,185
==========================================================================================
Net increase in net assets resulting from operations 34,228,198 27,456,994
==========================================================================================
Distributions to shareholders from net investment income:
Class A (343,444) (27,914)
------------------------------------------------------------------------------------------
Class B (299,755) --
------------------------------------------------------------------------------------------
Class C (16,237) --
------------------------------------------------------------------------------------------
Advisor Class* (29,048) (62,446)
------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (5,350,283) (50,561)
------------------------------------------------------------------------------------------
Class B (8,341,879) (88,384)
------------------------------------------------------------------------------------------
Class C (287,630) --
------------------------------------------------------------------------------------------
Advisor Class* (226,554) (16,133)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 54,920,598 (6,952,812)
------------------------------------------------------------------------------------------
Class B 34,809,580 (14,361,940)
------------------------------------------------------------------------------------------
Class C 18,134,821 578,307
------------------------------------------------------------------------------------------
Advisor Class* (431,451) (11,056,810)
==========================================================================================
Net increase (decrease) in net assets 126,766,916 (4,581,699)
==========================================================================================
NET ASSETS:
Beginning of year 81,913,285 86,494,984
==========================================================================================
End of year $208,680,201 $ 81,913,285
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $156,893,899 $ 46,550,387
------------------------------------------------------------------------------------------
Undistributed net investment income (loss) 17,702 736,025
------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 2,141,329 16,437,684
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 49,627,271 18,189,189
==========================================================================================
$208,680,201 $ 81,913,285
__________________________________________________________________________________________
==========================================================================================
</TABLE>
* Advisor Class shares were converted to Class A shares effective as of the
close of business on February 11, 2000.
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Financial Services 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. At a meeting
held on May 23 and 24, 2000, the Board of Trustees approved a restructuring of
the Fund to eliminate the master-feeder structure. The Fund, which had invested
substantially all of its investable assets in the Global Financial Services
Portfolio (the "Portfolio"), a Delaware business trust, would now invest
directly in the securities in which the Portfolio had invested. The
restructuring of the Fund was approved by Shareholders of the Fund at a meeting
held on September 1, 2000 and was completed on September 8, 2000.
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
$707,855, undistributed net realized gains decreased by $3,617,819 and paid
in capital increased by $2,909,964 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, net operating
loss and other 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.
9
<PAGE> 12
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 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. During the year
ended October 31, 2000, AIM reimbursed expenses of $2,650.
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 $50,000 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 $17,089 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
10
<PAGE> 13
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 $270,409, $601,612
and $76,274, respectively, as compensation under the Plans.
AIM Distributors received commissions of $133,801 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 October 31, 2000,
AIM Distributors received $10,205 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 $1,717 and reductions in custodian
fees of $102 under expense offset arrangements which resulted in a reduction of
the Fund's total expenses of $1,819.
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 no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans 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 failed to return the securities.
At October 31, 2000, securities with an aggregate value of $80,750 were on
loan to brokers. The loans were secured by cash collateral of $82,365 received
by the Fund. For the year ended October 31, 2000, the Fund received fees of
$13,796 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
$131,748,172 and $46,041,929, 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 $49,594,650
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (183,390)
=========================================================
Net unrealized appreciation of investment
securities $49,411,260
_________________________________________________________
=========================================================
Cost of investments for tax purposes is $162,302,359.
</TABLE>
NOTE 7-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 280 157,233
---------------------------------------------------------
Closed (280) (157,233)
=========================================================
End of year -- $ --
_________________________________________________________
=========================================================
</TABLE>
11
<PAGE> 14
NOTE 8-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 3,708,161 $ 84,155,054 833,262 $ 17,299,042
----------------------------------------------------------------------------------------------------------------------
Class B 2,343,916 50,065,435 676,623 13,852,370
----------------------------------------------------------------------------------------------------------------------
Class C* 910,841 19,615,087 32,543 712,656
----------------------------------------------------------------------------------------------------------------------
Advisor Class** 70,059 1,508,705 27,443 605,576
======================================================================================================================
Issued as reinvestment of dividends:
Class A 273,338 5,297,291 4,035 73,215
----------------------------------------------------------------------------------------------------------------------
Class B 424,196 8,021,011 4,616 82,070
----------------------------------------------------------------------------------------------------------------------
Class C* 11,109 210,474 -- --
----------------------------------------------------------------------------------------------------------------------
Advisor Class** 12,981 253,124 4,287 78,579
======================================================================================================================
Conversion of Advisor Class shares to Class A shares***:
Class A 105,329 2,017,059 -- --
----------------------------------------------------------------------------------------------------------------------
Advisor Class** (104,619) (2,017,059) -- --
======================================================================================================================
Reacquired:
Class A (1,582,015) (36,548,806) (1,170,739) (24,325,069)
----------------------------------------------------------------------------------------------------------------------
Class B (1,131,468) (23,276,866) (1,411,988) (28,296,380)
----------------------------------------------------------------------------------------------------------------------
Class C* (80,911) (1,690,740) (5,853) (134,349)
----------------------------------------------------------------------------------------------------------------------
Advisor Class** (8,213) (176,221) (537,683) (11,740,965)
======================================================================================================================
4,952,704 $107,433,548 (1,543,454) $(31,793,255)
______________________________________________________________________________________________________________________
======================================================================================================================
</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.
12
<PAGE> 15
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(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $23.23 $17.05 $17.22 $14.20 $11.92
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.02) 0.07 0.04 0.05
-----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.87 6.25 0.37 3.97 2.36
=================================================================================================================
Total from investment operations 5.80 6.23 0.44 4.01 2.41
=================================================================================================================
Less distributions:
Dividends from net investment income (0.25) (0.02) (0.01) -- (0.12)
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.93) (0.03) (0.60) (0.99) (0.01)
=================================================================================================================
Total distributions (4.18) (0.05) (0.61) (0.99) (0.13)
=================================================================================================================
Net asset value, end of period $24.85 $23.23 $17.05 $17.22 $14.20
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 30.06% 36.62% 2.53% 29.91% 20.21%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $95,393 $30,987 $28,433 $29,639 $7,302
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.00%(c) 1.99% 1.97% 2.29% 2.32%
-----------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.00%(c) 2.12% 1.99% 2.36% 3.39%
=================================================================================================================
Ratio of net investment income (loss) to average net assets (0.33)%(c) (0.08)% 0.37% 0.23% 0.41%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 41% 107% 111% 91% 103%
_________________________________________________________________________________________________________________
=================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $54,081,791.
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $22.67 $16.71 $16.97 $14.06 $11.83
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.12) (0.02) (0.04) (0.01)
-----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.72 6.11 0.37 3.94 2.34
=================================================================================================================
Total from investment operations 5.54 5.99 0.35 3.90 2.33
=================================================================================================================
Less distributions:
Dividends from net investment income (0.14) -- (0.01) -- (0.09)
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.93) (0.03) (0.60) (0.99) (0.01)
=================================================================================================================
Total distributions (4.07) (0.03) (0.61) (0.99) (0.10)
=================================================================================================================
Net asset value, end of period $24.14 $22.67 $16.71 $16.97 $14.06
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 29.40% 35.91% 2.08% 29.13% 19.81%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $92,343 $49,619 $48,785 $47,585 $9,886
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.50%(c) 2.49% 2.47% 2.79% 2.82%
-----------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.50%(c) 2.62% 2.49% 2.86% 3.89%
=================================================================================================================
Ratio of net investment income (loss) to average net assets (0.83)%(c) (0.58)% (0.13)% (0.27)% (0.09)%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 41% 107% 111% 91% 103%
_________________________________________________________________________________________________________________
=================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $60,161,247.
13
<PAGE> 16
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999(a)
----------- -------------
<S> <C> <C>
Net asset value, beginning of period $ 22.67 $19.58
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.08)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.72 3.17
==========================================================================================
Total from investment operations 5.54 3.09
==========================================================================================
Less distributions:
Dividends from net investment income (0.14) --
------------------------------------------------------------------------------------------
Distributions from net realized gains (3.93) --
==========================================================================================
Total distributions (4.07) --
==========================================================================================
Net asset value, end of period $ 24.14 $22.67
__________________________________________________________________________________________
==========================================================================================
Total return(b) 29.40% 15.78%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $20,944 $ 605
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.50%(c) 2.49%(d)
------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.50%(c) 2.62%(d)
==========================================================================================
Ratio of net investment income (loss) to average net assets (0.83)%(c) (0.58)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 41% 107%
__________________________________________________________________________________________
==========================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $7,627,355.
(d) Annualized.
14
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Financial Services 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 Financial Services 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
15
<PAGE> 18
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Global Financial Services Fund (the
"Fund"), an investment portfolio of AIM Investment Funds, a Delaware business
trust (the "Trust"), was held on September 1, 2000. The meeting was held for the
following purposes:
(1) To approve a new Investment Advisory Agreement for the Fund.
(2) To approve changing the fundamental investment restrictions of the Fund.
(3) To approve making the investment objective of the Fund non-fundamental.
(4) To ratify the selection of PricewaterhouseCoopers LLP as independent public
accountants of the Fund for the fiscal year ending in 2000.
The results of the voting on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ --------- ------- -----------
<S> <C> <C> <C> <C>
(1) Approval of a new Investment Advisory Agreement............. 3,247,549 69,186 116,010
(2)(a) Modification of Fundamental Restriction on Portfolio
Diversification............................................. 2,368,219 76,090 988,436*
(2)(b) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money.............................. 2,345,719 97,974 989,052*
(2)(c) Modification of Fundamental Restriction on Underwriting
Securities.................................................. 2,349,899 86,981 995,865*
(2)(d) Modification to or addition of Fundamental Restriction on
Industry Concentration...................................... 2,355,931 81,435 995,379*
(2)(e) Modification of Fundamental Restriction on Real Estate
Investments................................................. 2,346,406 95,645 990,694*
(2)(f) Modification of Fundamental Restriction on Purchasing or
Selling Commodities......................................... 2,336,309 101,030 995,406*
(2)(g) Modification of Fundamental Restriction on Making Loans..... 2,328,415 108,884 995,446*
(2)(h) Modification of Fundamental Policy on Investment in
Investment Companies........................................ 2,352,494 84,569 995,682*
(3) Approval of Making the Investment Objective of the Fund
Non-Fundamental............................................. 2,312,309 126,644 993,792*
(4) Ratification of the selection of PricewaterhouseCoopers LLP
as Independent Public Accountants of the Fund............... 3,277,044 38,272 117,429
</TABLE>
---------------
* Includes Broker Non-Votes.
---------------
Effective September 30, 2000, Charles T. Bauer retired from his positions as an
officer and trustee of the Trust and Robert H. Graham succeeded Mr. Bauer as
Chairman of the Board.
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, 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)
Melville B. Cox A I M Advisors, Inc.
Frank S. Bayley Vice President 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Gary T. Crum Houston, TX 77046
Vice President
Robert H. Graham TRANSFER AGENT
President and Chief Executive Officer, Carol F. Relihan
A I M Management Group Inc. Vice President and Secretary A I M Fund Services, Inc.
P.O. Box 4739
Ruth H. Quigley Mary J. Benson Houston, TX 77210-4739
Private Investor Assistant Vice President and
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, 5.67% is eligible for the dividends received deduction for
corporations. The Fund distributed long-term capital gains of $6,947,712 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--
<TABLE>
<S> <C> <C>
EQUITY FUNDS
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
AIM Small Cap Opportunities(1) AIM Latin American Growth eight 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
AIM Large Cap Growth AIM Global Growth PLC, one of the world's largest
AIM Weingarten independent financial services companies
AIM Mid Cap Equity MORE CONSERVATIVE with $414 billion in assets under
AIM Value II management as of 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--
A I M Distributors, Inc. GFS-AR-1
