<PAGE>
S
/ /
AIM EASTERN
EUROPE FUND
FORMERLY G.T. GLOBAL
EASTERN EUROPE FUND
/ /
SEMIANNUAL REPORT
APRIL 30, 1998
INVEST WITH
DISCIPLINE-SM-
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Message from the
Chairmen............. 1
Report from the Fund
Managers and Key
Portfolio Holdings... 2
Financial
Statements........... F1
Views of the Fund's management
described in this report are as
of the date written. Portfolio
holdings and allocations are as
of April 30, 1998, unless
otherwise noted. These views,
portfolio holdings and
allocations may have changed
subsequently.
</TABLE>
<PAGE>
[Photo]
SHARE REPURCHASE SUMMARY FOR AIM EASTERN EUROPE FUND
As an interval fund, the Fund is required to make annual offers to repurchase a
percentage of its outstanding shares, with redemption proceeds to be paid to
participating shareholders in cash. The percentage of outstanding shares that
the Fund will offer to repurchase in each annual offer will be established by
the Board of Trustees shortly before the commencement of the offer, but it will
not be less than 5% or more than 25% of the Fund's outstanding shares.
AIM EASTERN EUROPE FUND MESSAGE FROM THE CHAIRMEN
Dear Fellow Shareholder,
We are pleased to send you this semiannual report on your Fund. In the time
since you received your last report, there have been a few changes. Your Fund is
now a part of The AIM Family-Registered Trademark- of Funds and has adopted the
AIM name. Thanks to a vote of approval by GT Global shareholders, A I M
Advisors, Inc. became the new investment advisor to the GT Global Funds,
effective June 1, 1998.
We believe that you'll enjoy many advantages as a member of The AIM Family of
Funds-Registered Trademark-. Most of all, you'll be part of an expanded fund
family that is one of the largest and most respected in the industry.
Though the Funds are wearing a new name, your investments will continue to seek
their stated objectives and receive expert, professional management. In the
report that follows you'll find commentary from managers you know, with the
depth of coverage you've come to expect.
Thank you for your past support of the GT Global Funds. AIM is looking forward
to continuing a satisfying relationship with you and helping you reach your
financial goals.
Sincerely,
/s/ William J. Guilfoyle, /s/ Charles T. Bauer,
William J. Guilfoyle, Charles T. Bauer,
Chairman of the Board and President, Chairman,
GT Global Funds The AIM Family of Funds-Registered
Trademark-
1
- - -
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
BRYAN COLLINGS
Q HOW HAS THE FUND PERFORMED?
A During the six-month period to April 30, 1998, the AIM Eastern Europe Fund
appreciated by 2.33%, based on net asset value. The share price of the Fund, as
traded on the New York Stock Exchange, fell by 3.05%. The Fund has no prescribed
performance benchmark as there are few comprehensive indices available, and
those that are available have not yet achieved universal acceptance. Meanwhile,
we think it is useful to review the performance of major regional markets over
the period.
Most eastern European markets experienced significant volatility during October
1997, largely as a result of events in Asia, and negative sentiment continued
during November. Russia was the worst-performing market, ending the six-month
period to April 30 down 26.83% (in dollar terms based on the International
Finance Company Investable (IFCI) Country Index). Given Russia's dominant market
size, the poor results reduced the weighted performance of the region.
The defensive characteristics of the region, however, compared to other emerging
markets, were evident in the returns of other eastern European markets: Czech
Republic (-0.31%), Hungary (22.79%), and Poland (26.49%) (in dollar terms based
on their respective IFCI Country Index). In addition, stock selection within the
Fund provided superior returns in certain countries compared to those presented
above: Czech Republic (24.26%), Hungary (16.34%), Poland (45.53%) and Russia
(-9.64%). Even still, the Fund's considerable weighting in Russia was a drag on
the Fund's overall performance.
<TABLE>
<CAPTION>
IMPROVING FUNDAMENTALS
REAL GDP GROWTH
[Graph]
1998f 1992
<S> <C> <C>
Poland 6.0% 2.6%
Hungary 6.5% -3.1%
Russia 2.5% -14.5%
Czech Rep. 1.0% -6.4%
</TABLE>
Source: INVESCO (NY), Inc., May 1998.
Q WHAT COMPANIES PERFORMED WELL FOR THE FUND?
A The following companies contributed meaningfully to performance during the
period, given their respective weightings in the Fund: Matav, Elektrim, Vimpel
Communications and Richter Gedeon.
Matav is a Hungarian integrated telecommunications company with operating
interests in leased lines and data communication, Internet service provision and
PABX, and controlling interests in two cellular phone companies. Concession
agreements have guaranteed the company a regional monopoly in voice telephony
until 2001. Matav is also expanding into the cable TV market.
Elektrim has become Poland's leading manufacturing conglomerate, focusing on
three distinct electrical business areas: power generation equipment and
engineering; cables and electrical machinery; and telecommunications.
Vimpel Communications is the largest cellular operator in Russia, providing
services in the Moscow area. They have recently been granted another DCS 1800
license for Moscow (network now largely constructed) and have additional
licenses in five other regions--Samara, Tver, Vladimir, Ryazan and Kaluga.
Richter Gedeon is one of Hungary's highest-quality generic pharmaceutical
companies. The company has been very successful in changing its portfolio of
products and has established brand names in eastern Europe and the CIS
(Commonwealth of Independent States). We believe the company's distribution
capability should provide a basis for sustainable market share growth despite
increasing competition in the region.
CONTINUED p3
2
- - -
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
Q HOW DO EASTERN EUROPEAN MARKETS COMPARE TO OTHER EMERGING MARKETS? WHAT
FACTORS COULD DRIVE VOLATILITY IN THESE MARKETS?
A A few aspects are important in this regard. First, the future of Wall
Street is important in the prospective performance of emerging markets
overall.Continued concerns about the Japanese economy and the associated sale
of their U.S. investments is adding to the existing cautious tone. Any
significant correction in the U.S. could result in further emerging markets
volatility and exacerbate a very challenging investor environment. Latin
American and Asian markets, in particular, have very high correlations to the
U.S. market. Eastern Europe, on the other hand, has a lower sensitivity to
the U.S., largely because of its dependence on economic growth in western
Europe.
Second, the Asian crisis is likely to affect eastern European markets
considerably less, relative to other emerging markets, due to the lower level
ofexports destined for Asia. Broadly speaking, the bulk of eastern European
exports are destined to areas within Europe, and only about 5% go to Asia.
Russia, however, is somewhat more vulnerable, not only because of its export
exposure (about 15%), but also because of the subsequent fall in commodity
prices. Most importantly, the region is generally exhibiting positive or
improving economic and political fundamentals-trends we believe are likely to
be reflected in sustained economic growth.
Q THE FUND'S LARGEST ASSET ALLOCATION IS IN RUSSIA. HAVE THE FUNDAMENTALS
CHANGED SUFFICIENTLY TO JUSTIFY THIS EXPOSURE?
A The Fund's October annual report highlighted the extent to which the
Russian market followed the direction of the Asian markets during the third
quarter of last year. This correlation was largely a result of the negative
impact of lower commodity prices on the very commodity-dependent Russian
economy.
In addition, tight money growth and fiscal problems, among other issues, led
to a strong reversal of funds from Russian markets. Although the Asian crisis
may deteriorate further, we believe it is the status of Russian domestic
issues that may provide a favorable change in market sentiment. We consider
the political landscape very important since it has the potential to
determine the success of economic reform.
We view the recent Russian cabinet shuffle and appointment of Sergei
Kiriyenko as prime minister as a positive development and think it will
accelerate the much-needed reform process. To us, it does not signal a change
in the direction of reforms but, rather, emphasizes a technocratic government
with an increased ability to implement reforms. Nevertheless, we believe
investors are likely to wait for government progress on tax reform and fiscal
discipline before committing substantial funds to the market. Thus, we
maintain that further market volatility is likely to continue in the short
term, despite what we see as an improving outlook.
Q FISCAL REFORM IN RUSSIA IS IMPERATIVE FROM AN ECONOMIC PERSPECTIVE, BUT IS
THERE SUFFICIENT POLITICAL WILL?
A President Yeltsin recently outlined fiscal goals for the new government,
including a 1999 budget deficit limit of 3.7% of GDP, compared to the 1998
target of 4.7%. We believe the key to achieving this target, and others, will
be the government's ability to collect taxes against a backdrop of lower oil
prices, the associated reduction in tax revenues and huge tax arrears.
Furthermore, the powerful oil and gas lobby has already convinced the
government to cut the transport fees on oil exports via Transneft (the
state-owned pipeline operator), thereby exacerbating the situation. The
government has also considered cutting excise duties on oil, which would
further reduce tax receipts. Higher yields on government stock would
additionally contribute to the problem through higher interest costs.
We maintain that a cut in expenditure from budgeted levels is necessary if
fiscal goals are to be achieved. Our initial view is positive. The new
government comprises mainly professionals who have little or no affiliation
to financial and industrial groups and appears to be substantially more
implementation- oriented than the previous government. Although the new
government appears more unified, we feel their relations with members of the
Duma (Parliament), regions and financial-industrial groups will be a key
determinant of Russia's fiscal success.
CONTINUED p4
3
- - -
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
Q WHAT IS YOUR VIEW ON THE ENVIRONMENT IN HUNGARY?
A The commitment of the Hungarian authorities to financial stability and
economic austerity has resulted in a significant rerating of the domestic
stock market. Its status as a relatively safe haven subsequent to the global
equity market turbulence in October 1997 has resulted in substantial capital
inflows and has driven the market to record levels. Although this was
assisted by the listing of MATAV, and the high representation of blue-chip
companies in the Hungarian market, we believe the predictable and favorable
economic environment primarily attracted investment capital.
Our outlook for Hungary continues to be positive. We believe we are likely to
see further export-led growth, a recovery in domestic demand and lower
inflation in the short term. Other areas of the economy are also
demonstrating positive signs resulting from the commitment to economic
austerity. Meanwhile, the decline in the market during April could be
attributed, in part, to nervousness prior to the May election.
Q ARE YOU STILL CAUTIOUS ON THE CZECH MARKET?
A We have sold off our holdings in the Czech Republic. Political
uncertainty has been, and will probably continue to be, the key determinant
of market direction. Both the Czech currency and stock market have exhibited
nervousness in the run-up to June elections. During this period of
uncertainty, a number of major stocks have been unfavorably affected since
some product prices are still controlled by the government. Economically,
growth is being driven by exports, and domestic demand is depressed.
Moreover, while lower interest rates should provide a positive stimulus, they
are unlikely to have short-term implications for company earnings that do not
warrant higher valuations at this stage.
We also expect further currency pressure due to political uncertainty, lower
interest rates, a rising budget deficit and expected capital outflows.
Furthermore, we believe problems in the banking sector emanating from
possible underprovisioning for bad debts may affect market sentiment given
the substantial representation of banks in the index. Poor liquidity, in our
opinion, will also continue to stifle market momentum. Overall, we do not
expect relative outperformance from the Czech market, although we believe
much of the pessimism has already been discounted.
Q WHAT ARE YOUR EXPECTATIONS FOR POLAND?
A We have been cautious on Poland for some time. Industrial earnings
continue to be disappointing in relation to stock valuations. Interest rates
remain high and although significant scope for a reduction exists, we believe
it is unlikely to occur until weaker credit growth is evident. The strength
of the currency, resulting from high real interest rates, has dampened export
earnings, which has been reflected in industrial earnings.
Nevertheless, against a backdrop of solid future economic growth, declining
inflation and an acceptable budget deficit, the market could experience an
upturn. We will continue to invest in very selective opportunities until we
see evidence of a decline in interest rates, an uptick in earnings growth and
a stable current account deficit.
<TABLE>
<CAPTION>
PROGRESS ON PRICES
ANNUAL INFLATION RATE (CONSUMER PRICE INDEX)
[Graph]
1998f 1992
<S> <C> <C>
Hungary 13.0% 21.8%
Poland 15.0% 44.0%
Russia* 8.0% 2526.0%
Czech Rep. 13.5% 12.4%
</TABLE>
Source: INVESCO (NY), Inc., May 1998.
* Break in bar reflects change in scale.
4
- - -
<PAGE>
<TABLE>
<CAPTION>
GEOGRAPHIC ALLOCATION OF NET ASSETS %
APRIL 30, 1998
<S> <C>
Russia 49.6
Hungary 32.0
Poland 8.7
Ireland 2.0
Romania 2.0
Ukraine 1.3
Short Term & Other 4.4
</TABLE>
A complete listing of holdings and allocations may be found in the Financial
Statements section of this report.
<TABLE>
<CAPTION>
AIM EASTERN EUROPE FUND
% of
KEY PORTFOLIO HOLDINGS(3) Country Net Assets
<S> <C> <C>
MAGYAR TAVKOZLESI RT. (MATAV) The Hungarian telecommunications company is majority owned Hungary 14.3
by Germany's Deutsche Telekom AG and AmeriTech Corp. of the United States.
UNIFIED ENERGY SYSTEMS A state monopoly in the power utility sector, the company fully owns 35 Russia 12.4
of the largest power stations and all high voltage network-thus controlling over 85% of the
domestic energy supply. Export markets include Kazakhstan, Finland and Mongolia.
LUKOIL HOLDINGS Russia's largest private oil and gas company, LUKoil holds 18% of the Russian Russia 9.7
oil and gas extracting market and 11% of its refining market. The company's oil reserves are
estimated to be the second largest in the world.
MOL MAGYAR OLAJ-ES GAZIPARI RT. The company produces crude oil, petroleum products, bitumens, Hungary 6.5
lubricants and natural gas. MOL owns and operates three refineries, oil and gas pipelines,
service stations and natural gas storage facilities.
RICHTER GEDEON RT. Manufactures pharmaceutical products which it exports to the CIS, the Baltic Hungary 5.4
States, Poland, the U.S. and Japan.
MOSENERGO Produces and distributes electric and thermal energy. The company owns sufficient Russia 4.4
capacity to accommodate a pickup in demand over the next two years.
ROSTELECOM Provides long-distance and international telecommunications services. The company Russia 4.3
offers direct dial telephone service in Russia and international telecommunication services.
Rostelecom controls approximately a 95% market share in outgoing international phone calls.
VIMPEL COMMUNICATIONS Vimpel provides cellular telecommunications services in Russia Russia 4.1
including the city of Moscow and the Moscow Region. The group operates a digital advanced
mobile phone system 800 MHz cellular network in the Moscow license area, which it markets
under the Bee Line trademark.
BANK SLASKI S.A. This is a commercial bank catering to companies and individuals. The bank Poland 2.4
offers current and term accounts, grants credits and allows foreign lines of credit.
BANK ROZWOJU EKSPORTU S.A. The bank offers financial services to exporters, domestic Poland 2.3
companies and state agencies. It also conducts operations in Poland and on the
international currency market.
</TABLE>
Source: Bloomberg, April 1998.
(3) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
5
- - -
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
PORTFOLIO OF INVESTMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS(A)
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (37.4%)
Unified Energy Systems .................................... RUS -- -- 12.4
ELECTRICAL & GAS UTILITIES
Common (b)(d) ........................................... -- 26,120,000 $ 8,593,480 --
Reg S GDR (b)(d)(f) ..................................... -- 88,500 2,986,875 --
LUKoil Holding - ADR (b) .................................. RUS 139,000 9,104,500 9.7
OIL
MOL Magyar Olaj - es Gazipari Rt. - Reg S GDR (b)(f) ...... HGRY 198,800 6,083,280 6.5
OIL
Mosenergo - ADR (b) ....................................... RUS 116,160 4,138,200 4.4
ELECTRICAL & GAS UTILITIES
Elektrim Spolka Akcyjna S.A. (b) .......................... POL 150,045 2,144,131 2.3
ENERGY SOURCES
Surgutneftegaz - ADR (b) .................................. RUS 255,000 1,912,500 2.1
OIL
------------
34,962,966
------------
Services (27.9%)
Magyar Tavkozlesi Rt. - ADR (b)(d) ........................ HGRY 452,700 13,354,650 14.3
TELEPHONE - INTEGRATED
Rostelecom (b)(d) ......................................... RUS 1,130,000 4,034,100 4.3
TELEPHONE - LONG DISTANCE
Vimpel Communications - ADR (b)(d) ........................ RUS 71,550 3,863,700 4.1
TELECOM - OTHER
Chelyabinsk Svyazinform (b)(d) ............................ RUS 15,000 1,057,500 1.2
TELECOM - OTHER
Nizhny Novgorod Sviazinform (b)(d) ........................ RUS 295,000 914,500 1.0
TELECOM - OTHER
Danubius Hotels and Spa Rt. (d) ........................... HGRY 37,000 904,300 1.0
HOTELS AND MOTELS
Russian Telecommunication Development Corp. ............... RUS -- -- 0.7
TELEPHONE NETWORKS
Non-voting (b)(c)(d)(e) ................................. -- 52,600 394,500 --
Voting (b)(c)(d)(e) ..................................... -- 38,400 288,000 --
Samara Svyazinform ........................................ RUS -- -- 0.7
TELEPHONE - REGIONAL/LOCAL
Preferred (b)(d)(e) ..................................... -- 8,900 329,300 --
Common (b)(d)(e) ........................................ -- 4,600 326,600 --
Kuban Electrosvyaz Preferred (b)(d) ....................... RUS 51,100 597,870 0.6
TELECOM - OTHER
Technoimpex (b)(c)(d)(e) .................................. HGRY 1,400 -- --
WHOLESALE & INTERNATIONAL TRADE
------------
26,065,020
------------
Health Care (6.8%)
Richter Gedeon Rt. ........................................ HGRY 46,960 5,031,746 5.4
PHARMACEUTICALS
EGIS Rt. .................................................. HGRY 24,822 1,294,529 1.4
PHARMACEUTICALS
------------
6,326,275
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F1
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
PORTFOLIO OF INVESTMENTS (cont'd)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS(A)
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (6.1%)
Bank Slaski S.A. (b) ...................................... POL 26,059 $ 2,234,287 2.4
BANKS - MONEY CENTER
Bank Rozwoju Eksportu S.A. (b) ............................ POL 77,600 2,229,228 2.3
BANKS - MONEY CENTER
Bank Handlowy W. Warszawie (b)(d) ......................... POL 70,000 1,299,352 1.4
BANKS - MONEY CENTER
Ergo Bank S.A. ............................................ GK 1 94 --
BANKS - MONEY CENTER
------------
5,762,961
------------
Investment Funds (5.3%)
Baltic Republics Fund Ltd. (b)(c)(d) ...................... IRE 9,000 1,908,000 2.0
COUNTRY FUND
Romania Fund Ltd. (b)(d) .................................. ROM 15,000 1,312,500 1.4
COUNTRY FUND
Ladenburg Thalmann Ukraine Fund Ltd. (b)(d) ............... UKR 15,000 1,267,500 1.3
COUNTRY FUND
Romanian Growth Fund PLC (b)(d) ........................... ROM 75,000 521,250 0.6
COUNTRY FUND
------------
5,009,250
------------
Materials/Basic Industry (2.9%)
Izhorskie Works (b)(d) .................................... RUS 20,000 980,000 1.0
METALS - STEEL
Pannonplast Rt. ........................................... HGRY 20,000 848,663 0.9
MISC. MATERIALS & COMMODITIES
Mezogazdasagi Gepgyarto Rt. (b)(c)(d) ..................... HGRY 25,000 651,906 0.7
CHEMICALS
Stomil Olsztyn S.A. (b)(d) ................................ POL 39,024 273,651 0.3
PLASTICS & RUBBER
------------
2,754,220
------------
Consumer Non-Durables (2.4%)
Russkie Samotsvety (b)(d) ................................. RUS 50,000 1,400,000 1.5
OTHER CONSUMER GOODS
Pick Szeged Rt. - Reg S GDR (b)(f) ........................ HGRY 38,500 481,250 0.5
FOOD
SUN Brewing Ltd. - GDR (b)(d) ............................. RUS 20,000 356,745 0.4
BEVERAGE - ALCOHOL
------------
2,237,995
------------
Consumer Durables (1.9%)
North American Business Industries (b)(d) ................. HGRY 50,000 1,186,469 1.3
AUTO PARTS
Nizhnekamskshina (b)(d) ................................... RUS 100,000 593,000 0.6
AUTO PARTS
------------
1,779,469
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
PORTFOLIO OF INVESTMENTS (cont'd)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS(A)
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Goods (1.4%)
Uralmash Zavody (b)(d)(e) ................................. RUS 150,000 $ 1,275,000 1.4
MACHINERY & ENGINEERING
------------
1,275,000
------------ -----
TOTAL EQUITY INVESTMENTS (cost $88,058,354) ................. 86,173,156 92.1
------------ -----
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS COUNTRY AMOUNT (NOTE 1) ASSETS(A)
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (3.5%)
Bank for Foreign Economic Affairs (Vnesheconombank)
Interest Notes, 6.72% due 12/15/15 (b)(g) ................ RUS $ 4,500,000 3,245,625 3.5
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $3,053,231) ............ 3,245,625 3.5
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS(A)
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated April 30, 1998, with State Street Bank & Trust
Company, due May 1, 1998, for an effective yield of 5.44%
collateralized by $5,600,000 U.S. Treasury Bills, 6.125%
due 8/31/98 (market value of collateral is $5,670,000
including accrued interest). (cost $5,555,000) .......... 5,555,000 5.9
------------ -----
TOTAL INVESTMENTS (cost $96,666,585) * ..................... 94,973,781 101.5
Other Assets and Liabilities ................................ (1,439,414) (1.5)
------------ -----
NET ASSETS .................................................. $ 93,534,367 100.0
------------ -----
------------ -----
</TABLE>
- --------------
(a) Percentages indicated are based on net assets of $93,534,367.
(b) U.S. currency denominated.
(c) At April 30, 1998, the Fund owned the following restricted
securities constituting 3.4% of net assets which may not be
publicly sold without registration under the Securities Act of 1933
(Note 1). Additional information on restricted securities is as
follows:
<TABLE>
<CAPTION>
ACQUISITION VALUE
DATES SHARES COST PER SHARE
----------- ------ ----------- ------------
<S> <C> <C> <C> <C>
Baltic Republics Fund Ltd............... 9/2/94 9,000 $ 900,000 $212.00
Mezogazdasagi Gepgyarto Rt.............. 2/26/97 25,000 270,250 26.08
Russian Telecommunication Development
Corp.:
Non-voting............................ 12/20/93 52,600 526,000 7.50
Voting................................ 12/20/93 38,400 384,000 7.50
Technoimpex............................. 11/22/90 1,400 2,989,406 0.00
</TABLE>
(d) Non-income producing security.
(e) Valued in good faith at fair value using procedures approved by the
Board of Trustees (see Note 1 of Notes to Financial Statements).
(f) Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
(g) The coupon rate shown on floating rate note represents the rate at
period end.
* For Federal income tax purposes, cost is $98,162,085 and
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 13,480,681
Unrealized depreciation: (16,668,985)
-------------
Net unrealized depreciation: $ (3,188,304)
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
PORTFOLIO OF INVESTMENTS (cont'd)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998 was concentrated in the
following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS(A)
---------------------------------------------------
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY FIXED INCOME OTHER TOTAL
- -------------------------------------- ------ ------------- ------------- ----------
<S> <C> <C> <C> <C>
Hungary (HGRY/HUF) ................... 32.0 32.0
Ireland (IRE/IEP) .................... 2.0 2.0
Poland (POL/PLN) ..................... 8.7 8.7
Romania (ROM/ROL) .................... 2.0 2.0
Russia (RUS/RUR) ..................... 46.1 3.5 49.6
Ukraine (UKR/UKR) .................... 1.3 1.3
United States (US/USD) ............... 0.0 4.4 4.4
------ ----- ----- ----------
Total ............................... 92.1 3.5 4.4 100.0
------ ----- ----- ----------
------ ----- ----- ----------
</TABLE>
- --------------
(a) Percentages indicated are based on Net Assets of $93,534,367.
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
STATEMENT OF ASSETS
AND LIABILITIES
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $96,666,585) (Note 1)..... $94,973,781
U.S. currency............................................. $ 372
Foreign currencies (cost $172,341)........................ 172,126 172,498
--------
Receivable for securities sold...................................... 3,741,233
Interest receivable................................................. 125,137
Dividends and foreign withholding taxes receivable.................. 93,361
Prepaid expenses.................................................... 17,334
-----------
Total assets...................................................... 99,123,344
-----------
Liabilities:
Payable for fund shares repurchased (Note 5)........................ 4,922,879
Payable for securities purchased.................................... 365,000
Payable for investment management fees (Note 2)..................... 98,712
Payable for printing and postage expenses........................... 74,068
Payable for professional fees....................................... 60,841
Payable for custodian fees.......................................... 17,959
Payable for administration fees (Note 2)............................ 16,452
Payable for Trustees' fees and expenses (Note 2).................... 11,610
Other liabilities................................................... 21,456
-----------
Total liabilities................................................. 5,588,977
-----------
Net assets............................................................ $93,534,367
-----------
-----------
Net asset value per share ($93,534,367 DIVIDED BY 6,516,426 capital
shares outstanding).................................................. $ 14.35
-----------
-----------
Net assets consist of:
Paid-in capital (Note 4)............................................ $88,315,905
Accumulated net investment loss..................................... (550,226)
Accumulated net realized gain on investments and foreign currency
transactions (Note 1).............................................. 7,460,354
Net unrealized appreciation on translation of assets and liabilities
in foreign currencies.............................................. 1,138
Net unrealized depreciation of investments.......................... (1,692,804)
-----------
Total -- representing net assets applicable to capital shares
outstanding.......................................................... $93,534,367
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest and other.......................................................................... $ 272,885
Dividends (net of foreign withholding tax of $7,478)........................................ 24,805
----------
Total investment income................................................................... 297,690
----------
Expenses:
Investment management fees (Note 2)......................................................... 619,126
Administration fees (Note 2)................................................................ 99,059
Professional fees........................................................................... 33,699
Printing and postage expenses............................................................... 30,852
Custodian fees.............................................................................. 28,163
Trustees' fees and expenses (Note 2)........................................................ 17,441
Transfer agent fees......................................................................... 12,815
Other expenses.............................................................................. 31,526
----------
Total expenses before reimbursement....................................................... 872,681
----------
Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2)................... (24,765)
----------
Total net expenses........................................................................ 847,916
----------
Net investment loss........................................................................... (550,226)
----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
(Note 1)
Net realized gain on investments................................................ $9,141,810
Net realized loss on foreign currency transactions.............................. (166,451)
----------
Net realized gain during the period....................................................... 8,975,359
Net change in unrealized appreciation (depreciation) on translation ofassets and
liabilities in foreign currencies.............................................. 8,862
Net change in unrealized appreciation (depreciation) of investments............. (9,165,619)
----------
Net unrealized depreciation during the period............................................. (9,156,757)
----------
Net realized and unrealized loss on investments and foreign currencies........................ (181,398)
----------
Net decrease in net assets resulting from operations.......................................... $ (731,624)
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
---------------- ----------------
Increase (decrease) in net assets
Operations:
Net investment loss............................. $ (550,226) $ (32,221)
Net realized gain on investments and foreign
currency transactions.......................... 8,975,359 27,378,911
Net change in unrealized appreciation
(depreciation) on translation of assets and
liabilities in foreign currencies.............. 8,862 15,419
Net change in unrealized appreciation
(depreciation) of investments.................. (9,165,619) (2,020,222)
---------------- ----------------
Net increase (decrease) in net assets
resulting from operations...................... (731,624) 25,341,887
Distributions to shareholders: (Note 1)
From net investment income...................... -- (486,813)
From net realized gain on investments........... (28,533,697) (12,964,260)
---------------- ----------------
Total distributions........................... (28,533,697) (13,451,073)
Capital share transactions: (Note 4)
Cost of shares repurchased pursuant to annual
repurchase offer (Note 5)...................... (4,922,879) (6,372,020)
---------------- ----------------
Total increase (decrease) in net assets....... (34,188,200) 5,518,794
Net assets:
Beginning of period............................. 127,722,567 122,203,773
---------------- ----------------
End of period................................... $ 93,534,367* $127,722,567**
---------------- ----------------
---------------- ----------------
<FN>
- --------------
* Including accumulated net investment loss of $(550,226).
** Including undistributed net investment income of $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements and market price
data for the shares.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1998 ---------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 18.62 $ 16.92 $ 14.75 $ 15.37 $ 14.07 $ 10.37
----------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss).......... (0.08) 0.00 0.24 0.11 0.02 0.12
Net realized and unrealized gain
(loss) on investments................ (0.03) 3.57 2.11 (0.38) 1.52 3.58
----------- --------- --------- --------- --------- ---------
Net increase (decrease) from
investment operations.............. (0.11) 3.57 2.35 (0.27) 1.54 3.70
----------- --------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income................. 0.00 (0.07) (0.12) (0.02) (0.12) 0.00
Net realized gain on investments...... (4.16) (1.80) (0.06) (0.33) (0.12) 0.00
----------- --------- --------- --------- --------- ---------
Total distributions................. (4.16) (1.87) (0.18) (0.35) (0.24) 0.00
----------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 14.35 $ 18.62 $ 16.92 $ 14.75 $ 15.37 $ 14.07
----------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- ---------
Market value, end of period............. $ 11.94 $ 16.38 $ 13.75 $ 12.75 $ 13.00 $ 14.25
----------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- ---------
Total investment return (based on market
value)................................. (3.05)%(b) 35.81% 9.35% 0.73% (7.25)% 52.0%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $93,534 $127,723 $122,204 $236,698 $246,610 $225,231
Ratio of net investment income (loss) to
average net assets:
With expense reimbursement by
Chancellor LGT Asset Management, Inc.
(Note 2)............................. (1.16)%(a) (0.02)% 1.09% 0.80% 0.15% 1.04%
Without expense reimbursement by
Chancellor LGT Asset Management,
Inc.................................. (1.21)%(a) N/A N/A N/A N/A N/A
Ratio of expenses to average net assets:
With expense reimbursement by
Chancellor LGT Asset Management, Inc.
(Note 2)............................. 1.79%(a) 1.88% 1.87% 1.79% 1.87% 1.88%
Without expense reimbursement by
Chancellor LGT Asset Management,
Inc.................................. 1.84%(a) N/A N/A N/A N/A N/A
Portfolio turnover rate................. 67%(a) 95% 69% 57% 65% 87%
Average commission rate paid on
portfolio transactions (c)............. $0.1480 $ 0.1374 $ 0.0420 N/A N/A N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized.
(c) For fiscal years beginning after September 1, 1995, the Fund is
required to disclose its average commission rate paid per share for
purchases and sales of investment securities.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
NOTES TO
FINANCIAL STATEMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 7 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 7)
G.T. Global Eastern Europe Fund ("Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a non-diversified, closed-end management investment
company. Effective June 1, 1998, the Fund was renamed AIM Eastern Europe Fund.
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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, are valued at the mean
between closing bid and asked prices. In cases where securities are traded on
more than one exchange, or traded both on an exchange and over the counter, the
securities are valued on the exchange or in the market determined by Chancellor
LGT Asset Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for such investments or, if such prices are not available, at
prices for investments of comparative maturity, quality and type; however, when
the Manager deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term investments are valued at
amortized cost, adjusted for foreign exchange translation and market
fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Fund's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at period
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss.
When the Forward Contract is closed, the Fund records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Fund's "Statement of Assets and Liabilities." The
Fund could be exposed to risk if a counterparty is unable to meet the terms of
the contract or if the value of the currency changes unfavorably. The Fund may
enter into Forward Contracts in connection with planned purchases or sales of
securities, or to hedge against adverse fluctuations in exchange rates between
currencies.
F9
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" 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. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers, unless a quotation from only one broker
is available, in which case only that broker's price will be used. If an option
expires on its stipulated expiration date or if the Fund enters into a closing
purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security and, for a put, requires the Fund to set aside cash, U.S. government
securities, or other liquid securities, in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividend income is recorded on the
ex-dividend date, or as soon as the Fund is informed of the dividend. Interest
income is recorded on the accrual basis. Where a high level of uncertainty
exists as to its collection, income is recorded net of all withholding tax with
any rebate recorded when received. The Fund may trade securities on other than
normal settlement terms. This may increase the risk if the counterparty fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
(H) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income and capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
(I) DISTRIBUTION TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(K) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt
F10
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
from registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the
Portfolio of Investments.
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(M) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
The Fund may trade securities on a when-issued or forward commitment basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Fund will
generally purchase these securities with the intention of acquiring such
securities, it may sell such securities before the settlement date. These
securities, if any, are identified on the accompanying Portfolio of Investments.
The Fund has set aside sufficient cash or liquid securities as collateral for
these purchase commitments.
2. RELATED PARTIES (SEE ALSO NOTE 7)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager. The Fund pays the Manager management fees, which
are calculated and paid monthly, at the annualized rate of 1.25% of the Fund's
average weekly adjusted net assets (which, for this purpose, means the average
weekly value of the total assets of the Fund, minus the sum of the accrued
liabilities of the Fund, other than borrowings used for investment purposes).
Princeton Administrators, L.P. ("Princeton") acts as administrator of the Fund.
The Fund pays administration fees to Princeton, calculated and paid monthly, at
the annualized rate of 0.20% of the Fund's average weekly adjusted net assets.
Prior to November 1, 1997, these fees had been calculated and paid at 0.25% of
the Fund's average weekly adjusted net assets. Chancellor LGT Asset Management
has voluntarily undertaken to reduce the fee to 0.15% of the Fund's average
weekly adjusted net assets through an annual reimbursement, to the fund, of
0.05% of the Fund's average weekly adjusted net assets.
The Fund pays each of its Trustees who is not an employee, officer or director
of the Manager or any of it's affiliated companies $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$30,914,190 and $62,577,498, respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the six months ended April 30, 1998.
4. CAPITAL SHARES
At April 30, 1998, there were an unlimited number of shares of beneficial
interest authorized, at $0.01 par value per share. 16,045,345 shares were issued
and 6,516,426 shares remained outstanding.
5. ANNUAL REPURCHASE OFFER
Pursuant to the Fund's policy of conducting annual repurchase offers, on March
27, 1998, the Fund offered to repurchase up to 5% of the issued and outstanding
shares of beneficial interest in the Fund. The repurchase offer expired on April
17, 1998 and the shares were repurchased at the Net Asset Value ("NAV") at the
close of regular trading on the New York Stock Exchange on May 1, 1998, less a
repurchase fee equal to 1.458% of the NAV per share.
The Fund's transfer agent, Boston Equiserve, indicated that 2,314,502 shares
were validly tendered and not withdrawn prior to the expiration of the Fund's
repurchase offer. The shares accepted for tender (342,971 shares representing
5%) received cash at a repurchase offer price of $14.19, which was equal to the
Fund's NAV of $14.40 as of May 1, 1998, less the repurchase fee. After the
repurchase offer, the Fund has approximately 6.5 million shares outstanding;
342,971 shares were returned to the Fund's Treasury. For the six months ended
April 30, 1998, the Fund recorded a liability of $4,922,879 related to this
annual repurchase offer.
6. LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of each Fund's total
assets. On April 30, 1998, the Fund had no loans outstanding.
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $2,789,474, with a weighted average interest rate of 6.38%.
Interest expense for the Fund for the six months ended April 30, 1998 was
$9,384, and is included in "Other expenses" on the Statement of Operations.
7. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser of the Fund and INVESCO (NY), Inc. became the sub-adviser of the Fund.
All of the changes became effective as of the close of business on May 29, 1998.
F11
<PAGE>
AIM EASTERN EUROPE FUND
(FORMERLY G.T. GLOBAL EASTERN EUROPE FUND)
NOTES
- --------------------------------------------------------------------------------
<PAGE>
AIM EASTERN EUROPE FUND
AIM/GT FUNDS
AIM Distributors offers a broad range of funds to complement many investors'
portfolios. For more information and a prospectus on any of the funds listed
below, please contact your Financial Adviser or call 1-800-824-1580. The
prospectus contains more complete information, including charges, expenses and
risks. Investors should read the prospectus carefully before investing.
EQUITY FUNDS
AIM NEW DIMENSION FUND
(FORMERLY GT GLOBAL NEW DIMENSION FUND)
Captures global growth opportunities by investing directly in the six global
theme funds
AIM WORLDWIDE GROWTH FUND
(FORMERLY GT GLOBAL WORLDWIDE GROWTH FUND)
Invests around the world, including the U.S.
AIM INTERNATIONAL GROWTH FUND
(FORMERLY GT GLOBAL INTERNATIONAL GROWTH FUND)
Offers portfolio diversity by investing outside the U.S.
AIM EMERGING MARKETS FUND
(FORMERLY GT GLOBAL EMERGING MARKETS FUND)
Provides access to the growth potential of developing economies
AIM DEVELOPING MARKETS FUND
(FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
Invests in debt and equity securities of developing market issuers
AIM NEW PACIFIC GROWTH FUND
(FORMERLY GT GLOBAL NEW PACIFIC GROWTH FUND)
Offers access to emerging and established markets of the Pacific Rim, excluding
Japan
AIM JAPAN GROWTH FUND
(FORMERLY GT GLOBAL JAPAN GROWTH FUND)
Provides U.S. investors with access to the Japanese market
AIM EUROPE GROWTH FUND
(FORMERLY GT GLOBAL EUROPE GROWTH FUND)
Focuses on investment opportunities in Europe
AIM LATIN AMERICAN GROWTH FUND
(FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
Invests in the emerging markets of Latin America
AIM SMALL CAP EQUITY FUND
(FORMERLY GT GLOBAL AMERICA SMALL CAP GROWTH FUND)
Invests in equity securities of small U.S. companies
AIM MID CAP GROWTH FUND
(FORMERLY GT GLOBAL MID CAP GROWTH FUND)
Concentrates on medium-sized companies in the U.S.
AIM AMERICA VALUE FUND
(FORMERLY GT GLOBAL AMERICA VALUE FUND)
Looks for equity securities of large cap U.S. companies believed to be
undervalued
GROWTH AND INCOME FUND
AIM GLOBAL GROWTH & INCOME FUND
(FORMERLY GT GLOBAL GROWTH & INCOME FUND)
Invests in blue-chip stocks and government securities from around the world
INCOME FUNDS
AIM GLOBAL GOVERNMENT INCOME FUND
(FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
Seeks to earn monthly income from global government securities
AIM STRATEGIC INCOME FUND
(FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
AIM GLOBAL HIGH INCOME FUND
(FORMERLY GT GLOBAL HIGH INCOME FUND)
Invests in debt securities of emerging markets
AIM FLOATING RATE FUND
(FORMERLY GT GLOBAL FLOATING RATE FUND)
Invests primarily in senior secured floating rate loans with the potential to
achieve a high level of current income
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
THEME FUNDS
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
(FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND)
Focuses on worldwide opportunities resulting from the demand for consumer
products and services
AIM GLOBAL FINANCIAL SERVICES FUND
(FORMERLY GT GLOBAL FINANCIAL SERVICES FUND)
Focuses on the worldwide opportunities stemming from the demand for financial
services and products
AIM GLOBAL HEALTH CARE FUND
(FORMERLY GT GLOBAL HEALTH CARE FUND)
Invests in growing health care industries worldwide
AIM GLOBAL INFRASTRUCTURE FUND
(FORMERLY GT GLOBAL INFRASTRUCTURE FUND)
Invests in companies that build, improve or maintain a country's infrastructure
AIM GLOBAL RESOURCES FUND
(FORMERLY GT GLOBAL NATURAL RESOURCES FUND)
Concentrates on companies that own, explore or develop natural resources
AIM GLOBAL TELECOMMUNICATIONS FUND
(FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
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[LOGO]
A I M Distributors, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
AIM Eastern Europe Fund
EER-SAR-1
