<PAGE> 1
[AIM LOGO APPEARS HERE]
[COLLAGE APPEARS HERE]
AIM LIMITED MATURITY TREASURY SHARES
SEMI-ANNUAL REPORT
JANUARY 31, 1996
<PAGE> 2
AIM LIMITED MATURITY TREASURY SHARES
For shareholders who seek high monthly income free from state taxes while
maintaining relative stability of principal by investing only in U.S. Treasury
Notes with maturities of three years or less.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o Unless otherwise indicated, Fund results were computed at net asset value
without deducting a sales charge.
o When sales charges are included in performance figures, those figures
reflect the maximum 1.00% sales charge. Total return reflects reinvestment
of all distributions.
o During the reporting period, the Fund paid distributions of $0.29 per
share.
o The SEC 30-day yield is calculated on the basis of a 30-day period
according to the SEC formula. The formula is based upon the portfolio's
potential earnings from dividends, interest and yield-to-maturity or
yield-to-call of its holdings, net of all expenses and expressed on an
annualized basis.
o The annualized distribution rate reflects the Fund's most recent monthly
dividend distribution multiplied by 12 and divided by the most recent
month-end maximum offering price.
o Standard & Poor's Corporation is a well-known credit rating agency that
monitors the credit quality of bonds and other financial instruments,
including mutual funds. Funds are rated from highest quality (AAA) to
lowest credit quality (CCC).
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o Past performance cannot guarantee comparable future results.
o The Fund's portfolio is subject to change, and there is no assurance the
Fund will continue to hold these same securities.
o Government securities, such as U.S. Treasury bills and bonds, offer a high
degree of safety and are guaranteed as to the timely payment of principal
and interest. Fund shares are not insured and their value and yield will
vary with market conditions.
o The Consumer Price Index is a measure of change in consumer prices as
determined by the U.S. Bureau of Labor Statistics.
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 1/31/96
<TABLE>
<CAPTION>
With Sales Charge
<S> <C>
Inception (12/15/87) 6.79%
5 Years 5.88
1 Year 7.72
6 Months 2.84
</TABLE>
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
A Message From
The Chairman
Dear Fellow Shareholder:
[PHOTO Continuing to practice its disciplined investment strategy in
Charles T. a favorable financial environment, AIM Limited Maturity
Bauer Treasury Shares produced a total return of 3.86%, including
Chairman of reinvested distributions, during the six-month reporting
the Board of period ended January 31, 1996. Retail Class net assets under
the Fund management grew from $274.5 million to $325 million.
APPEARS HERE] The Fund continued to provide competitive monthly income
and low share-price volatility.
In terms of income, as of January 31, 1996, the 30-day SEC yield for the
Retail Class was 4.69%; its 30-day distribution rate was 5.37% at maximum
offering price. This compares favorably with the 4.92% yield on two-year
Treasury notes as of the same date.
Volatility was limited. Net asset value of a Fund share at the end of the
reporting period was $10.12, up $0.09 from $10.03 as of July 31, 1995. Net
asset value per share fluctuated between a low of $9.99 and a high of $10.12
during the six months covered by this report.
Your Fund continues to earn Standard & Poor's highest possible
credit-quality rating of AAAf, based on an annual analysis of the portfolio's
credit quality, composition, and management, and a weekly portfolio review.
A more complete discussion of your Fund's investment strategy is included in
the Management's Discussion & Analysis that begins on the following page.
Excellent performance by your Fund was among the factors contributing to
AIM's recent robust growth. During the six months covered by this report, the
company's total assets under management rose from approximately $35 billion to
more than $45 billion.
It is our pleasure to send you this report on AIM Limited Maturity Treasury
Shares. As always, we are ready to respond to your questions or comments about
this report. Please call Client Services at 800-959-4246 during normal business
hours. For automated account and Fund information 24 hours a day, please call
the AIM Investor Line toll free at 800-246-5463.
Thank you for your continued participation in The AIM Family of Funds(R).
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
GROWTH IN NET ASSETS
<TABLE>
<S> <C>
7/31/95 $274.5 MILLION
1/31/96 $325 MILLION
</TABLE>
<PAGE> 4
Management's Discussion
& Analysis
FUND CONTINUES TO EMPLOY DISCIPLINED STRATEGY
The six-month period covered by this report was marked by a continued boom in
fixed-income markets, changing economic performance, and anticipation of
interest rate cuts. The Federal Reserve Board had lowered the benchmark
short-term Federal Funds rate early in July 1995 because of lackluster economic
performance during the second quarter of 1995. Though many anticipated further
easing, the rate remained at 5.75% for several months, partly because the
economy had apparently regained its stride and partly because the Federal
Reserve Board refrained from monetary action while negotiations over balancing
the federal budget were under way.
However, signs of economic weakness began to outweigh signs of strength late
in 1995. For example, during November, activity in the manufacturing sector
contracted for the fourth consecutive month. At its December meeting the
Federal Reserve Board lowered the Federal Funds rate to 5.50%.
By the close of the reporting period, economic prospects were uncertain.
Disappointing holiday sales, further contraction in manufacturing activity, and
a drop in capacity utilization were among the data that led the Federal Reserve
Board to lower the Federal Funds rate again, to 5.25%, at the end of January
1996.
YOUR INVESTMENT PORTFOLIO
AIM Limited Maturity Treasury Shares does not alter its investment portfolio in
response to changes in the economic environment. Rather, its investment
portfolio is designed to take advantage of the natural slope of the yield
curve.
The Fund purchases two-year Treasury notes, holds them until they have one
year to maturity, then sells them and reinvests the proceeds in more two-year
Treasury notes. This accomplishes three things:
o The Fund remains focused on the one- to two-year sector of the yield curve.
A lengthy study by A I M Capital Management, Inc. found the most favorable
risk/return trade-off generally occurs in this maturity range, where the slope
of the yield curve is usually steepest.
o The portfolio adheres to a "laddered maturity structure." Approximately 8%
of the portfolio is turned over each month as that proportion of holdings
reaches the point of being one year from maturity. This laddering creates a
built-in cushion against volatility, especially when interest rates are
declining, because two-year Treasuries are coupon-bearing instruments that
tend to appreciate in value when rates fall.
o The Fund generally maintains a duration of 1.4 years. Duration is a widely
used measure of bond and bond fund volatility expressed in years. Generally
speaking, a fund with a duration of 1.4 years, like AIM Limited Maturity
Treasury Shares, should gain (or lose) 1.4% in value should interest rates
decline (or rise) by 1%.
OUTLOOK FOR THE FUTURE
At the close of the reporting period, the prognosis for the near term was for
slow to at best moderate economic growth with low inflation. Unemployment rose
in January 1996, the average work week declined, and bellwether auto sales
fell. Year-end data showed the Consumer Price Index rose only 2.5% during
1995, the smallest increase since 1986.
Such economic conditions could exert downward pressure on interest rates, and
many believe further rate cuts will be forthcoming, saying a Federal Funds rate
of 4.5% would be realistic if inflation remains in the 2.5% range. However, as
of this writing, Federal Reserve Board Chairman Alan Greenspan, in testimony
before Congress, described the economy as "basically on track for sustained
growth," thereby leaving open the possibility that rates could remain
unchanged.
Because of its portfolio's laddered maturity structure and relatively short
duration, described above, AIM Limited Maturity Treasury Shares is well
positioned for possible interest rate changes.
STABILITY OF NET ASSET VALUE
January 31, 1988-1996
Line chart
1/88 $ 9.99
1/89 9.74
1/90 9.76
1/91 9.92
1/92 10.15
1/93 10.20
1/94 10.15
1/95 9.86
1/96 10.12
Since the inception of the Fund in 1987, the rolling 12-month net asset value
of a Fund share has never deviated more than 1.71%.
<PAGE> 5
Financials
SCHEDULE OF INVESTMENTS
January 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET
MATURITY (000s) VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES
U.S. TREASURY NOTES-97.83%
6.875% 02/28/97 $ 37,705 $ 38,466,641
- ----------------------------------------------------------------------------------------------
6.625% 03/31/97 37,455 38,168,518
- ----------------------------------------------------------------------------------------------
6.50% 04/30/97 37,780 38,493,664
- ----------------------------------------------------------------------------------------------
6.125% 05/31/97 37,640 38,212,504
- ----------------------------------------------------------------------------------------------
5.625% 06/30/97 38,240 38,612,075
- ----------------------------------------------------------------------------------------------
5.875% 07/31/97 38,475 39,006,340
- ----------------------------------------------------------------------------------------------
6.00% 08/31/97 38,575 39,191,043
- ----------------------------------------------------------------------------------------------
5.75% 09/30/97 37,925 38,420,680
- ----------------------------------------------------------------------------------------------
5.625% 10/31/97 37,475 37,905,213
- ----------------------------------------------------------------------------------------------
5.375% 11/30/97 38,300 38,592,229
- ----------------------------------------------------------------------------------------------
5.25% 12/31/97 37,800 38,028,690
- ----------------------------------------------------------------------------------------------
5.00% 01/31/98 37,500 37,561,875
- ----------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 460,659,472
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 97.83% 460,659,472
- ----------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES -- 2.17% 10,233,192
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.00% $470,892,664
==============================================================================================
</TABLE>
See Notes to Financial Statements.
3
<PAGE> 6
Financials
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $455,148,847) $460,659,472
- ----------------------------------------------------------------------------------------
Cash 20,433
- ----------------------------------------------------------------------------------------
Receivables for:
Fund shares sold 6,897,680
- ----------------------------------------------------------------------------------------
Interest 5,925,179
- ----------------------------------------------------------------------------------------
Investment in deferred compensation plan 2,758
- ----------------------------------------------------------------------------------------
Other assets 162,061
- ----------------------------------------------------------------------------------------
Total assets 473,667,583
- ----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 1,554,589
- ----------------------------------------------------------------------------------------
Dividends 1,033,830
- ----------------------------------------------------------------------------------------
Deferred compensation 2,758
- ----------------------------------------------------------------------------------------
Accrued advisory fees 80,090
- ----------------------------------------------------------------------------------------
Accrued distribution fees 40,336
- ----------------------------------------------------------------------------------------
Accrued transfer agent fees 32,702
- ----------------------------------------------------------------------------------------
Accrued operating expenses 30,614
- ----------------------------------------------------------------------------------------
Total liabilities 2,774,919
- ----------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $470,892,664
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
INSTITUTIONAL AIM
SHARES SHARES FUND
<S> <C> <C> <C>
NET ASSETS: $145,917,162 $324,975,502 $470,892,664
===========================================================================================
Shares outstanding, $0.01 par value per
share 14,417,348 32,109,210 46,526,558
===========================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $10.12
===========================================================================================
OFFERING PRICE PER SHARE:
(Net asset value of $10.12 divided by 99.00%) $10.22
===========================================================================================
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 7
Financials
STATEMENT OF OPERATIONS
For the six months ended January 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
INSTITUTIONAL AIM
SHARES SHARES FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 4,332,914 $ 9,454,973 $ 13,787,887
- ---------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 137,704 301,086 438,790
- ---------------------------------------------------------------------------------------------------
Administrative service fees 9,025 19,852 28,877
- ---------------------------------------------------------------------------------------------------
Custodian fees 12,512 11,790 24,302
- ---------------------------------------------------------------------------------------------------
Transfer agent fees 4,926 118,379 123,305
- ---------------------------------------------------------------------------------------------------
Trustees' fees and expenses 1,493 3,387 4,880
- ---------------------------------------------------------------------------------------------------
Distribution fees -- 225,814 225,814
- ---------------------------------------------------------------------------------------------------
Other 29,693 122,399 152,092
- ---------------------------------------------------------------------------------------------------
Total expenses 195,353 802,707 998,060
- ---------------------------------------------------------------------------------------------------
Net investment income $ 4,137,561 $ 8,652,266 12,789,827
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain on sales of investment securities 2,658,303
- ---------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 1,498,997
- ---------------------------------------------------------------------------------------------------
Net gain on investment securities 4,157,300
- ---------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 16,947,127
===================================================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended January 31, 1996 and
the year ended July 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
1996 1995
<S> <C> <C>
OPERATIONS:
Net investment income $ 12,789,827 $ 22,353,697
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities 2,658,303 (7,239,070)
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 1,498,997 9,384,912
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 16,947,127 24,499,539
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Institutional Shares (4,137,561) (7,065,914)
- --------------------------------------------------------------------------------------------
AIM Shares (8,652,266) (15,287,783)
- --------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Institutional Shares 15,082,702 (6,229,532)
- --------------------------------------------------------------------------------------------
AIM Shares 47,642,288 (56,819,839)
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 66,882,290 (60,903,529)
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 404,010,374 464,913,903
- --------------------------------------------------------------------------------------------
End of period $470,892,664 $404,010,374
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $472,749,896 $410,024,906
- --------------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (7,367,857) (10,026,160)
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 5,510,625 4,011,628
- --------------------------------------------------------------------------------------------
$470,892,664 $404,010,374
============================================================================================
</TABLE>
See Notes to Financial Statements.
5
<PAGE> 8
Financials
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Investment Securities Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Trust is organized as a Delaware business
trust consisting of one portfolio, the Limited Maturity Treasury Portfolio (the
"Fund"). The investment objective of the Fund is to seek liquidity with minimum
fluctuation in principal value and, consistent with this investment objective,
the highest total return achievable. The Fund currently offers two different
classes of shares: the AIM Limited Maturity Treasury Shares (the "AIM Shares")
and the Institutional Shares. Matters affecting each class are voted on
exclusively by such shareholders.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of these financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
A. Security Valuations--Debt obligations that are issued or guaranteed by the
U.S. Treasury 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 the pricing service
are valued at the mean between last bid and asked prices based upon quotes
furnished by independent sources. Securities for which market quotations are
not readily available 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. Securities with a remaining maturity of
60 days or less are valued at amortized cost which approximates market value.
B. Securities Transactions and Investment Income--Securities transactions are
accounted for on a trade date basis. Interest income, adjusted for
amortization of discounts on investments, is earned from settlement date and
is recorded on the accrual basis. It is the policy of the Fund not to
amortize bond premiums for financial reporting purposes. Interest income is
allocated to each class daily, based upon each class' pro-rata share of the
total shares of the Fund outstanding. Realized gains and losses from
securities transactions are recorded on the identified cost basis.
C. Dividends and Distributions to Shareholders--It is the policy of the Fund to
declare daily dividends from net investment income. Such dividends are paid
monthly. Net realized short-term capital gains, if any, are distributed
quarterly. Net realized long-term capital gains, if any, are distributed
annually.
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. The Fund has a capital loss carryforward (which may
be carried forward to offset future taxable capital gains, if any) of
$5,819,679, which expires, if not previously utilized, in the year 2003.
E. Expenses--Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to more than
one class, e.g., advisory fees, are allocated between them.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM") with respect to the Fund. Under the terms of the master
investment advisory agreement, the Fund pays AIM an advisory fee at the annual
rate of 0.20% of the first $500 million of the Fund's average daily net assets
plus 0.175% of the Fund's average daily net assets in excess of $500 million.
This agreement requires AIM to reduce its fee or, if necessary,
6
<PAGE> 9
Financials
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES-(continued)
make payments to the extent required to satisfy any expense limitations imposed
by the securities laws or regulations thereunder of any state in which the Fund
shares are qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to reimburse AIM for certain administrative costs incurred in
providing accounting services to the Fund. During the six months ended January
31, 1996, the Fund reimbursed AIM $28,877 for such services.
The Fund, pursuant to a transfer agent 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 AIM shares. During the six months ended January 31,
1996, AFS was paid $75,075 for such services. During the six months ended
January 31, 1996, the Fund paid A I M Institutional Fund Services, Inc. ("AIFS")
$4,820 pursuant to a transfer agency and shareholder services agreement with
respect to the Institutional Shares.
The Trust has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the AIM
Shares and a master distribution agreement with Fund Management Company ("FMC")
to serve as the distributor for the Institutional Shares. The Trust has adopted
a Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with respect to
the AIM Shares. The Fund pays AIM Distributors compensation at an annual rate of
0.15% of the average net assets attributable to the AIM Shares. The Plan is
designed to compensate AIM Distributors for certain promotional and other sales
related costs and provides periodic payments to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own AIM Shares of the Fund. Any amounts not paid as a
service fee under such Plan would constitute an asset-based sales charge. The
Plan also imposes a cap on the total amount of sales charges, including
asset-based sales charges, that may be paid by the Fund. During the six months
ended January 31, 1996, the AIM Shares paid AIM Distributors $225,814 as
compensation under the Plan.
AIM Distributors received commissions of $95,700 during the six months ended
January 31, 1996 from sales of AIM Shares. Such commissions are not an expense
of the Fund. They are deducted from, and are not included in, proceeds from
sales of AIM shares. Certain officers and trustees of the Trust are officers and
directors of AIM, AIM Distributors, FMC, AFS and AIFS.
During the six months ended January 31, 1996, the Fund paid legal fees of
$2,764 for services rendered by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
as counsel to the Board of Trustees. A member of that firm is a trustee of the
Trust.
NOTE 3-BANK BORROWINGS
The Fund has a $6,700,000 committed line of credit with a financial institution
syndicate with Chemical Bank of New York as the administrative agent. Interest
on borrowings under the line of credit is payable on maturity or prepayment
date. During the six months ended January 31, 1996, the Fund did not borrow
under the line of credit agreement. The Fund is charged a commitment fee,
payable quarterly, at the rate of 1/10 of 1% per annum on the unused balance of
the Fund's committed line.
NOTE 4-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended January 31, 1996 was
$304,570,432 and $246,324,185, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of January 31, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $ 5,504,569
- -----------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities --
- -----------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 5,504,569
===================================================================================
</TABLE>
Cost of investments for tax purposes is $455,154,903.
NOTE 5-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
7
<PAGE> 10
Financials
NOTE 6-SHARE INFORMATION
Changes in the AIM Shares outstanding during the six months ended January 31,
1996 and the year ended July 31, 1995 were as follows:
<TABLE>
<CAPTION>
JANUARY 31, 1996 JULY 31, 1995
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold 11,561,434 $ 116,255,565 15,641,151 $ 155,346,148
- -------------------------------------------------------------------------------------- ----------------------------
Issued as reinvestment of dividends 688,592 6,929,176 1,083,758 10,758,338
- -------------------------------------------------------------------------------------- ----------------------------
Reacquired (7,510,142) (75,542,453) (22,488,544) (222,924,325)
- -------------------------------------------------------------------------------------- ----------------------------
4,739,884 $ 47,642,288 (5,763,635) $ (56,819,839)
====================================================================================== ============================
</TABLE>
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of AIM Shares
outstanding during the six months ended January 31, 1996, each of the years in
the two-year period ended July 31, 1995, each of the years in the five-year
period ended August 31, 1993 and the period December 15, 1987 (date operations
commenced) through August 31, 1988.
<TABLE>
<CAPTION>
JULY 31, AUGUST 31,
JANUARY 31, ------------------------ --------------------------------------
1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.03 $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.29 0.54 0.35 0.42 0.58 0.72
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net gains (losses) on securities (both
realized
and unrealized) 0.09 0.07 (0.20) 0.05 0.29 0.22
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.38 0.61 0.15 0.47 0.87 0.94
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.29) (0.54) (0.35) (0.42) (0.58) (0.72)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Distributions from net realized capital gains -- -- (0.08) (0.02) (0.09) --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.29) (0.54) (0.43) (0.44) (0.67) (0.72)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.12 $ 10.03 $ 9.96 $ 10.24 $ 10.21 $ 10.01
========================================================== ========== ========== ========== ========== ==========
Total return(a) 3.86% 6.36% 1.52% 4.65% 8.93% 9.95%
========================================================== ========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $324,976 $ 274,480 $ 329,942 $ 348,937 $ 260,454 $ 131,880
========================================================== ========== ========== ========== ========== ==========
Ratio of expenses to average net assets 0.53%(b) 0.51% 0.47%(c) 0.46% 0.48% 0.54%
========================================================== ========== ========== ========== ========== ==========
Ratio of net investment income to average net
assets 5.75%(b) 5.44% 3.75%(c) 4.07% 5.60% 7.25%
========================================================== ========== ========== ========== ========== ==========
Portfolio turnover rate 56.15% 120.01% 120.40% 122.99% 119.62% 214.74%
========================================================== ========== ========== ========== ========== ==========
Borrowings for the period:
Amount of debt outstanding at end of period
(000s omitted) -- -- -- -- -- --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Average amount of debt outstanding during the
period
(000s omitted)(f) -- -- -- -- -- --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Average number of shares outstanding during
the period
(000s omitted)(f) 29,724 28,337 34,101 30,416 18,378 10,559
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Average amount of debt per share during the
period -- -- -- -- -- --
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
1990 1989 1988
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.78 $ 9.80 $ 9.92
- ----------------------------------------------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.77 0.84 0.52
- ----------------------------------------------- ---------- ---------- ----------
Net gains (losses) on securities (both
realized
and unrealized) 0.01 (0.02) (0.12)
- ----------------------------------------------- ---------- ---------- ----------
Total from investment operations 0.78 0.82 0.40
- ----------------------------------------------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.77) (0.84) (0.52)
- ----------------------------------------------- ---------- ---------- ----------
Distributions from net realized capital gains -- -- --
- ----------------------------------------------- ---------- ---------- ----------
Total distributions (0.77) (0.84) (0.52)
- ----------------------------------------------- ---------- ---------- ----------
Net asset value, end of period $ 9.79 $ 9.78 $ 9.80
=============================================== ========== ========== ==========
Total return(a) 8.32% 8.71% 4.11%
=============================================== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 79,871 $ 70,781 $ 62,342
=============================================== ========== ========== ==========
Ratio of expenses to average net assets 0.50%(d) 0.45%(e) 0.35%(c)(e)
=============================================== ========== ========== ==========
Ratio of net investment income to average net
assets 7.90%(d) 8.59%(e) 7.02%(c)(e)
=============================================== ========== ========== ==========
Portfolio turnover rate 192.46% 219.53% 140.83%
=============================================== ========== ========== ==========
Borrowings for the period:
Amount of debt outstanding at end of period
(000s omitted) -- $ 9,943 $ 19,232
- ----------------------------------------------- ---------- ---------- ----------
Average amount of debt outstanding during the
period
(000s omitted)(f) $ 5,101 $ 14,301 $ 4,110
- ----------------------------------------------- ---------- ---------- ----------
Average number of shares outstanding during
the period
(000s omitted)(f) 7,389 7,295 2,429
- ----------------------------------------------- ---------- ---------- ----------
Average amount of debt per share during the
period $ 0.69 $ 1.96 $ 1.69
- ----------------------------------------------- ---------- ---------- ----------
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
return is not annualized.
(b) Ratios are annualized and based on average net assets of $298,631,023.
(c) Annualized.
(d) After waiver of advisory fees.
(e) After waiver of advisory fees and expense reimbursements.
(f) Averages computed on a daily basis.
8
<PAGE> 11
Trustees &
Officers
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
11 Greenway Plaza
Charles T. Bauer Charles T. Bauer Suite 1919
Chairman and Chief Executive Officer Chairman Houston, TX 77046
A I M Management Group Inc.
Robert H. Graham INVESTMENT ADVISOR
Bruce L. Crockett President A I M Advisors, Inc.
Director, President, and 11 Greenway Plaza
Chief Executive Officer John J. Arthur Suite 1919
COMSAT Corporation Senior Vice President and Treasurer Houston, TX 77046
Owen Daly II Gary T. Crum TRANSFER AGENT
Director Senior Vice President A I M Fund Services, Inc.
Cortland Trust Inc. P.O. Box 4739
Carol F. Relihan Houston, TX 77210-4739
Carl Frischling Vice President and Secretary
Partner CUSTODIAN
Kramer, Levin, Naftalis, Nessen, Melville B. Cox The Bank of New York
Kamin & Frankel Vice President 110 Washington Street, 8th Floor
New York, NY 10286
Robert H. Graham Karen Dunn Kelley
President and Chief Operating Officer Vice President COUNSEL TO THE FUND
A I M Management Group Inc. Ballard Spahr
Dana R. Sutton Andrews & Ingersoll
John F. Kroeger Vice President 1735 Market Street
Formerly, Consultant and Assistant Treasurer Philadelphia, PA 19103
Wendell & Stockel Associates, Inc.
P. Michelle Grace COUNSEL TO THE TRUSTEES
Lewis F. Pennock Assistant Secretary Kramer, Levin, Naftalis,
Attorney Nessen, Kamin & Frankel
David L. Kite 919 Third Avenue
Ian W. Robinson Assistant Secretary New York, NY 10022
Consultant; Former Executive
Vice President and Nancy L. Martin DISTRIBUTOR
Chief Financial Officer Assistant Secretary A I M Distributors, Inc.
Bell Atlantic Management 11 Greenway Plaza
Services, Inc. Ofelia M. Mayo Suite 1919
Assistant Secretary Houston, TX 77046
Louis S. Sklar
Executive Vice President Kathleen J. Pflueger
Hines Interests Assistant Secretary
Limited Partnership
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 12
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS(R)
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Constellation Fund
[PHOTO OF 11 GREENWAY AIM Global Aggressive Growth Fund
PLAZA APPEARS HERE]
GROWTH
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH
AIM Global Utilities Fund**
HIGH CURRENT INCOME
AIM High Yield Fund
CURRENT INCOME
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE
OF SAFETY
AIM Intermediate Government Fund***
HIGH DEGREE OF SAFETY AND
CURRENT INCOME
AIM Limited Maturity Treasury Shares
STABILITY, LIQUIDITY, AND
CURRENT INCOME
AIM Money Market Fund
STABILITY, LIQUIDITY, AND
CURRENT TAX-FREE INCOME
AIM Tax-Exempt Cash Fund
AIM Management Group has provided leadership in the mutual fund *AIM Aggressive Growth Fund was closed to new investors on
industry since 1976 and currently manages more than $45 billion in July 18, 1995. **On May 1, 1995, AIM Utilities Fund
assets for more than 2 million shareholders, including individual broadened its investment strategy to permit up to 80% of
investors, corporate clients, and financial institutions. The AIM its total assets to be invested in foreign securities, and
Family of Funds(R) is distributed nationwide, and AIM today ranks was renamed AIM Global Utilities Fund. ***On September 25,
among the nation's top 20 mutual fund companies in assets under 1995, AIM Government Securities Fund was renamed AIM
management, according to Lipper Analytical Services, Inc. Intermediate Government Fund. For more complete
information about any AIM Fund(s), including sales charges
and expenses, ask your financial consultant or securities
dealer for a free prospectus(es). Please read the
prospectus(es) carefully before you invest or send money.
</TABLE>
[AIM LOGO APPEARS HERE]
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 1919 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
