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AIM HIGH YIELD FUND II
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated November 29,1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Investment
Securities Funds (the trust), on behalf of AIM High Yield Fund II (the fund),
voted to request shareholders to approve the following items that will affect
the fund:
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective and making it
non-fundamental. The investment objective of the fund would be changed
by deleting references to the types of securities that the fund will
purchase to achieve its objective. If the investment objective of the
fund becomes non-fundamental, it can be changed in the future by the
Board of Trustees of the trust without further approval by
shareholders. Pursuant to this proposal, the fund's investment
objective would read: "The fund's investment objective is to achieve a
high level of current income."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
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AIM LIMITED MATURITY TREASURY FUND
CLASS A SHARES
Supplement dated February 4, 2000
to the Prospectus dated November 29, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Investment
Securities Funds (the trust), on behalf of AIM Limited Maturity Treasury Fund
(the fund), voted to request shareholders to approve the following items that
will affect the fund:
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective so that it is
non-fundamental. If the investment objective of the fund becomes
non-fundamental, it can be changed in the future by the Board of
Trustees of the trust without further approval by shareholders.
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote. Proposals that are approved are expected to become effective on or
about May 26, 2000.
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RETAIL CLASSES OF
AIM HIGH YIELD FUND II
AIM LIMITED MATURITY TREASURY FUND
(SERIES PORTFOLIOS OF AIM INVESTMENT SECURITIES FUNDS)
Supplement dated February 4, 2000
to the Statement of Additional Information dated November 29, 1999,
as supplemented January 24, 2000
At a meeting held on February 3, 2000, the Board of Trustees of AIM Investment
Securities Funds (the "Trust"), on behalf of its series portfolios (the
"Funds"), voted to request shareholder approval to amend the Funds' fundamental
investment restrictions. The Board of Trustees has called a meeting of the
Funds' shareholders to be held on or about May 3, 2000 to vote on these and
other proposals. Only shareholders of record as of February 18, 2000 will be
entitled to vote at the meeting. Proposals that are approved are expected to
become effective on or about May 26, 2000.
If shareholders approve the proposal to amend the Funds' fundamental investment
restrictions, each of the AIM High Yield Fund II and AIM Limited Maturity
Treasury Fund will operate under the following fundamental investment
restrictions, which may be changed only by a vote of a majority of such fund's
outstanding shares:
(a) the Fund is a "diversified company" as defined in the 1940 Act.
The Fund will not purchase the securities of any issuer if, as a result,
the Fund would fail to be a diversified company within the meaning of the
1940 Act, and the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time or are
interpreted from time to time by the SEC staff (collectively, the 1940
Act laws and interpretations) or except to the extent that the Fund may
be permitted to do so by exemptive order or similar relief (collectively,
with the 1940 Act laws and interpretations, the 1940 Act laws,
interpretations and exemptions"). In complying with this restriction,
however, the Fund may purchase securities of other investment companies
to the extent permitted by the 1940 Act laws, interpretations and
exemptions.
(b) the Fund may not borrow money or issue senior securities, except
as permitted by the 1940 Act laws, interpretations and exemptions.
(c) the Fund may not underwrite the securities of other issuers.
This restriction does not prevent the Fund from engaging in transactions
involving the acquisition, disposition or resale of its portfolio
securities, regardless of whether the Fund may be considered to be an
underwriter under the Securities Act of 1933.
(d) the Fund will not make investments that will result in the
concentration (as that term may be defined or interpreted by the 1940 Act
laws, interpretations and exemptions) of its investments in the
securities of issuers primarily engaged in the same industry. This
restriction does not limit the Fund's investments in (i) obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, or (ii) tax-exempt obligations issued by governments
or political subdivisions of governments. In complying with this
restriction, the Fund will not consider a bank-issued guaranty or
financial guaranty insurance as a separate security.
(e) the Fund may not purchase real estate or sell real estate unless
acquired as a result of ownership of securities or other instruments.
This restriction does not prevent the Fund from investing in issuers that
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein.
(f) the Fund may not purchase physical commodities or sell physical
commodities unless acquired as a result of ownership of securities or
other instruments. This restriction does not prevent the Fund from
engaging in transactions involving futures contracts and options thereon
or investing in securities that are secured by physical commodities.
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(g) the Fund may not make personal loans or loans of its assets to
persons who control or are under common control with the Fund, except to
the extent permitted by 1940 Act laws, interpretations and exemptions.
This restriction does not prevent the Fund from, among other things,
purchasing debt obligations, entering into repurchase agreements, loaning
its assets to broker-dealers or institutional investors, or investing in
loans, including assignments and participation interests.
(h) the Fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies and restrictions as the Fund.
The investment restrictions set forth above provide the Funds with the ability
to operate under new interpretations of the 1940 Act or pursuant to exemptive
relief from the SEC without receiving prior shareholder approval of the change.
Even though the Funds have this flexibility, the Board of Trustees has adopted
internal guidelines for each Fund relating to certain of these restrictions
which the adviser must follow in managing the Funds. Any changes to these
guidelines, which are set forth below, require the approval of the Board of
Trustees.
1. In complying with the fundamental restriction regarding issuer
diversification, the Fund will not, with respect to 75% of its total
assets, purchase securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities), if, as a result, (i) more than 5% of the
Fund's total assets would be invested in the securities of that
issuer, or (ii) the Fund would hold more than 10% of the outstanding
voting securities of that issuer. The Fund may (i) purchase
securities of other investment companies as permitted by Section
12(d)(1) of the 1940 Act and (ii) invest its assets in securities of
other money market funds and lend money to other investment
companies and their series portfolios that have AIM as an investment
adviser, subject to the terms and conditions of any exemptive orders
issued by the SEC.
2. In complying with the fundamental restriction regarding borrowing
money and issuing senior securities, the Fund may borrow money in an
amount not exceeding 33 1/3% of its total assets (including the
amount borrowed) less liabilities (other than borrowings). The Fund
may borrow from banks, broker/dealers or other investment companies
or their series portfolios that have AIM or an affiliate of AIM as
an investment advisor (an AIM Fund). The Fund may not borrow for
leveraging, but may borrow for temporary or emergency purposes, in
anticipation of or in response to adverse market conditions, or for
cash management purposes. The Fund may not purchase additional
securities when any borrowings from banks exceed 5% of the Fund's
total assets.
3. In complying with the fundamental restriction regarding industry
concentration, the Fund may invest up to 25% of its total assets in
the securities of issuers whose principal business activities are in
the same industry.
4. In complying with the fundamental restriction with regard to making
loans, the Fund may lend up to 33 1/3% of its total assets and may
lend money to another AIM Fund, on such terms and conditions as the
SEC may require in an exemptive order.
5. Notwithstanding the fundamental restriction on investing all of the
Fund's assets in an open-end fund, the Fund may not invest all of
its assets in the securities of a single open-end management
investment company with the same fundamental investment objectives,
policies and limitations as the Fund.
If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from changes in values of assets will not be
considered a violation of the restriction.
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Effective immediately, the following paragraph replaces in its entirety the
paragraph appearing under the heading, "INVESTMENT OBJECTIVES AND POLICIES -
INVESTMENT IN OTHER INVESTMENT COMPANIES" on page 12 of the Statement of
Additional Information:
"Each of the funds may invest in other investment companies to the
extent permitted by the 1940 Act, and rules and regulations thereunder,
and if applicable, exemptive orders granted by the SEC. The following
restrictions apply to investments in other investment companies other
than Affiliated Money Market Funds (defined below): (i) a fund may not
purchase more than 3% of the total outstanding voting stock of another
investment company; (ii) a fund may not invest more than 5% of its total
assets in securities issued by another investment company; and (iii) a
fund may not invest more than 10% of its total assets in securities
issued by other investment companies other than Affiliated Money Market
Funds. With respect to a fund's purchase of shares of another investment
company, including Affiliated Money Market Funds, the fund will
indirectly bear its proportionate share of the advisory fees and other
operating expenses of such investment company. The funds have obtained an
exemptive order from the SEC allowing them to invest in money market
funds that have AIM or an affiliate of AIM as an investment adviser (the
"Affiliated Money Market Funds"), provided that investments in Affiliated
Money Market Funds do not exceed 25% of the total assets of such fund.
With respect to a fund's purchase of shares of the Affiliated Money
Market Funds, the fund will indirectly pay the advisory fees and other
operating expenses of the Affiliated Money Market Funds."
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