<PAGE> 1
[PHOTO APPEARS HERE]
AIM GLOBAL
GROWTH FUND
[AIM LOGO APPEARS HERE] ANNUAL REPORT OCTOBER 31, 1996
<PAGE> 2
[PHOTO APPEARS HERE]
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Growth Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed without a sales
charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The performance of the Fund's Class B shares will differ from that of
Class A shares due to differences in sales charge structure and Fund
expenses.
o During the year ended October 31, 1996, the Fund paid distributions on both
Class A and Class B shares of $0.213 per share.
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 The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any particular security.
o Past performance cannot guarantee comparable future results.
o International investing presents certain risks not associated with investing
solely in the U.S. These include risks relating to fluctuations in the value
of the U.S. dollar relative to the value of other currencies, the custody
arrangements made for the Fund's foreign holdings, differences in
accounting, political risks, and the lesser degree of public information
required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor. The unmanaged Lipper Global Fund Index represents an average of the
performance of the 30 largest global mutual funds tracked by Lipper.
o The Morgan Stanley Capital International World Index is a group of unmanaged
global securities tracked by Morgan Stanley Capital International.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
MUTUAL FUNDS, ANNUTITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE
FDIC OR ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OR, OR GUARANTEED BY, ANY BANK OR ANY AFFILIATE;
AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS
OF PRINCIPAL AMOUNT INVESTED.
--------------------------------
AIM GLOBAL GROWTH FUND
For shareholders who seek
long-term growth of capital.
The Fund invests in a portfolio
of global equity securities with
strong earnings momentum.
--------------------------------
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
The Chairman's Letter
Dear Shareholder:
As you may have heard in the financial news, A I M Management
[PHOTO OF Group Inc. recently announced a significant event in our
Charles T. company's history--an agreement to merge with INVESCO PLC,
Bauer, one of the world's largest independent investment management
Chairman of groups.
the Board of AIM has long been known for its strategic planning and
THE FUND, forward thinking. In seeking this merger, AIM had specific
APPEARS HERE] goals in choosing a partner: to better AIM's position to
succeed in an increasingly competitive financial services
environment, both in the U.S. and globally; to ensure the
continuation of AIM's independent culture, investment
philosophy, and dedication to our shareholders; and to offer
the broadest range of products and services to our
shareholders.
A "MERGER OF EQUALS" THAT PRESERVES INDEPENDENCE
When the merger is completed, AIM and INVESCO will be combined under a new
holding company to be named AMVESCO, to reflect the strongly complementary
strengths of our two companies which together create a "merger of equals."
AMVESCO will have combined assets under management in excess of $150 billion.
Most importantly, the agreement enables AIM to preserve its independent
culture--which has been so essential to our company's success. The locations,
management, structure, and brand names of AIM and INVESCO will not change.
With INVESCO, AIM achieves a strategic combination with a partner that
offers complementary rather than overlapping strengths. AIM has delivered
impressive performance over the years as a domestic retail fund manager.
INVESCO brings to AIM its primary strengths as an institutional money manager,
and as a successful international investment manager with significant
operations in North America, Europe, and the Pacific region.
NO CHANGES IN YOUR AIM FUND OR ITS MANAGEMENT
While AIM certainly will be enriched through these added strengths, it will
retain those qualities that have produced two decades of successful
performance. The reputation of AIM funds has been built by its seasoned team of
portfolio managers who adhere to AIM's disciplined and successful investment
management process. AIM's central goal is to keep the current investment team
in place and our time-tested investment philosophy intact. Also, the names of
AIM funds will not change.
Moreover, because the merger will not result in any changes in the way AIM
does business, this transaction will be seamless--without any disruption of
service to you.
YOUR VOTE IS IMPORTANT
The merger is expected to be completed on or about February 28. As a result
of the merger, it is necessary for shareholders of AIM funds to approve a new
investment advisory agreement. Recently, we mailed an announcement for the
shareholder meeting planned on February 7, along with a proxy card that
describes proposals that relate to the management and policies of your Fund. We
encourage you to review and return your proxy as soon as possible. Your Fund's
Board of Directors carefully considered and unanimously approved the proposals
and recommends that you vote in favor of each one. Your vote is important to
us. If you haven't yet mailed your proxy card, please send it today.
The AIM/INVESCO merger marks a new and promising era for AIM, and we believe
it will yield exciting opportunities for AIM shareholders. We appreciate the
trust you have placed in us.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
---------------------------
With INVESCO, AIM
achieves a strategic
combination with a
partner that offers comple-
mentary rather than
overlapping strengths.
---------------------------
<PAGE> 4
The Manager's Overview
GLOBAL STOCK INVESTORS ARE TREATED TO A STRONG 1996
- --------------------------------------------------------------------------------
A roundtable discussion with the Fund management team for AIM Global Growth
Fund for the fiscal year ended October 31, 1996.
Q. U.S. STOCKS HAD ANOTHER STRONG YEAR, AND WORLD EQUITY MARKETS HAVE
STRENGTHENED. HOW DID AIM GLOBAL GROWTH FUND PERFORM DURING THE REPORTING
PERIOD?
A. It has been a good year for global stocks. As strong as the performance of
U.S. stocks has been during the reporting period, 13 world equity markets
ranked higher. Morgan Stanley Capital International (MSCI) World Index of
global stocks gained 16.30% for the year ended October 31, 1996.
AIM Global Growth Fund had a better year--total return as of October 31,
1996, was 17.26% for Class A shares and 16.60% for Class B shares. That
performance also bested the 14.87% average total return for similar funds
over the same period, according to the Lipper Global Fund Index.
Q. WHAT IGNITED THE PERFORMANCE OF WORLD EQUITY MARKETS?
A. In foreign markets, signs of improving economic performance, lower interest
rates, and a strong U.S. dollar encouraged investors to propel stocks to
enthusiastic levels during 1996, especially in Europe.
On October 15, stock markets in the United Kingdom, Denmark, Germany,
Hungary, the Netherlands, Norway, Spain, Sweden, and Switzerland set new
highs. Many of these countries were among the Fund's largest weightings.
Clearly, the drive to comply with European Monetary Unit standards has
been a significant influence behind the economic revival. Earlier in the
year, the club of countries likely to adopt a single currency in January
1999 seemed to include a select few. Now, many countries are cutting
interest rates and attacking budget deficits in a scramble to qualify for
EMU standards, and financial markets have roared their approval.
Q. WHAT WERE THE FORCES DRIVING THE ADVANCE IN DOMESTIC STOCKS?
A. Stocks in the U.S. delivered another record-breaking performance thanks to
continued healthy growth in the economy without rising inflation.
The charging advance was interrupted briefly in July when it seemed
interest rates might rise and company earnings might falter. Higher interest
rates increase borrowing and operating costs, and that can have a stronger
impact on corporate profits, particularly for smaller companies. In 1995,
small companies had posted stunning profits that seemed hard to meet a year
later.
Uncertainty creates volatile markets, and investors gravitated to stocks
in larger companies with more predictable earnings. As a result,
large-company stocks generally have outperformed smaller company stocks in
the U.S. in 1996. However, it has become apparent recently that small-company
stocks have grown more appealing as earnings reports show surprisingly
strong growth.
Q. HOW ABOUT THE PACIFIC RIM?
A. Stock markets in Asia were thriving. Hong Kong, Malaysia, Indonesia--all
countries in which the Fund invests--were among the top-performing
countries in the Pacific basin, based on U.S. dollars. Improved investor
confidence has triggered a surge of funds into the region. In China,
companies on Hong Kong's Hang Seng stock market index raised HK$22 billion
($2.8 billion) in the first eight months of 1996.
================================================================================
AIM GLOBAL GROWTH FUND HAS STRONG YEAR
- --------------------------------------------------------------------------------
10/31/95-10/31/96
AIM FUND CLASS A 17.26%
AIM FUND CLASS B 16.60%
MSCI WORLD INDEX 16.30%
LIPPER INDEX 14.87%
================================================================================
================================================================================
LIPPER RANKINGS, CLASS A SHARES
- --------------------------------------------------------------------------------
As of 10/31/96
AIM GLOBAL
PERIOD FUND FUNDS TOP %
1 YEAR 34 153 23%
================================================================================
The Fund's Class B shares ranked 48 of 153 funds, or 32% for the year ended
10/31/96.
Fund percentage rankings are vs. all global funds tracked by Lipper, excluding
all sales charges, and including fees and expenses.
--------------------------------------
Signs of improving economic
performance, lower interest rates, and
a strong U.S. dollar encouraged
investors to propel stocks to
enthusiastic levels in 1996.
--------------------------------------
See important Fund & index disclosures inside front cover.
2
<PAGE> 5
PORTFOLIO COMPOSITION
As of October 31, 1996
================================================================================
TOP 10 FOREIGN EQUITY HOLDINGS TOP 10 DOMESTIC EQUITY HOLDINGS
================================================================================
1. Cheung Kong Holdings Ltd. 1. Compaq Computer Corp.
2. Hang Seng Bank Ltd. 2. Intel Corp.
3. HSBC Holdings PLC 3. ADC Telecommunications, Inc.
4. Nutricia Verenigde Bedrijven N.V. 4. Federal Home Loan Mortgage Corp.
5. Honda Motor Co. 5. Equifax, Inc.
6. Adidas A.G. 6. Dell Computer Corp.
7. PT Hanjaya Mandala Sampoerna 7. Home Depot, Inc.
8. Carrefour Supermarche 8. Ascend Communications, Inc.
9. QNI Ltd. 9. Sterling Commerce, Inc.
10. Hoechst A.G. 10. Harley-Davidson, Inc.
Please keep in mind that the Fund's portfolio is subject to change and
there is no assurance the Fund will continue to hold any particular security.
================================================================================
================================================================================
A GLOBAL VIEW
TOP 10 WORLD MARKETS
================================================================================
AVERAGE ANNUALIZED RETURN IN U.S. DOLLARS
10/31/95-10/31/96
1. Taiwan 38.32%
2. Argentina 33.21
3. Brazil 33.03
4. Spain 32.11
5. Venezuela 30.93
6. Canada 29.94
7. Sweden 28.92
8. Portugal 28.06
9. Hong Kong 28.04
10. Ireland 27.05
Source: Morgan Stanley Capital International
================================================================================
Japan's stock market continued to languish as that economy struggled to
emerge from recession. The Bank of Japan has lowered interest rates to near
zero in an effort to stimulate growth, and recent economic data has
suggested some gathering strength.
Japanese exporters were strong beneficiaries of the continued strength in
the U.S. dollar. However, consumer spending--the engine of domestic economic
growth--continues to lag.
Q. How did the Fund take advantage of the global investment climate?
A. The Fund's portfolio had a strong presence in the U.S--more than 32% of the
portfolio as of October 31, 1996. The primary concentrations were in stocks
of technology, retail, and health-care sectors. Among the larger holdings
were Compaq Computer Corp., Intel Corp., Home Depot Inc., and Toys R Us, Inc.
The Fund's portfolio also included many of the top-performing European
markets like the United Kingdom, Spain, Sweden, the Netherlands, and France.
The Fund held significant positions in long-term favorites like retailers
Carrefour Supermarche in France and Dixons Group in Britain. Germany's
Adidas AG was new to the Fund.
Q. HOW WAS THE FUND INVESTED OUTSIDE EUROPE AND THE U.S.?
A. Hong Kong stocks again claimed many of the Fund's top 10 equity positions,
including the Fund's largest single holding, real estate company Cheung Kong
Holdings Ltd, followed by positions in major banks HSBC Holdings and Hang
Seng Bank Ltd.
In Japan, the Fund reduced its investment exposure to 11% and continued
to emphasize those companies that benefited from the strong U.S. dollar and
exhibited growing earnings. For example, auto-makers Honda Motor Co. and
Toyota Motor Corp. profited by the comparative advantage in currency
exchange with the U.S. and by cutting production costs on their cars by
one-third.
Q. HOW WAS THE FUND POSITIONED AT THE END OF THE FISCAL YEAR?
A. The Fund held a large number of stocks--352 as of October 31, 1996, spread
over 26 countries and 68 industry categories. The largest position weighting
in the Fund was 0.91%. More than 32% of the Fund's holdings was invested in
Europe, followed by 32% in the U.S., 11% in Japan, and 6% in Hong Kong. The
Fund's net assets at the end of the reporting period stood at $236 million.
Q. WHAT IS YOUR OUTLOOK FOR THE MARKET INTO 1997?
A. Conditions appear favorable for stocks in general well into 1997. Recent
reports show that economic growth in the U.S. slowed to a 2.0% annual rate
in the third quarter from 4.7% in the second quarter.
That is good news for world markets--the U.S. economy is growing at a
reasonable rate without rising inflation, which keeps the U.S. dollar strong
and reduces the likelihood that worldwide interest rates may increase over
the near term.
Most signs are positive for continued improvement in Europe.
Privatization and consolidation efforts have begun to bear fruit in
corporate profitability, and governments are making serious progress with
budget deficits.
Recent reports suggest that the United Kingdom's labor market has become
the envy of European growth enthusiasts. The 7.2% unemployment rate for
October was a nudge lower than the 7.4% of September and well below the 8.1%
of October 1995.
Analysts are also eyeing strong economic progress in Hong Kong and
Malaysia. Even Japan's recovery has begun to show signs of life.
See important Fund & index disclosures inside front cover.
<PAGE> 6
Long-Term Performance
AIM GLOBAL GROWTH FUND VS. BENCHMARK INDEX
The chart below compares your Fund to a benchmark index. It is intended to give
you a general idea of how your Fund performed compared to the stock market over
the period 9/15/94 to 10/31/96. It is important to understand the difference
between your Fund and an index. Your Fund's total return is shown with a sales
charge and includes fund expenses and management fees. An index measures the
performance of a hypothetical portfolio, in this case the Morgan Stanley
Capital International World Index. Unlike your Fund, an index is not managed;
therefore, there are no sales charges, expenses, or fees. You cannot invest in
an index. But if you could buy all the securities that make up a particular
index, you would incur expenses that would affect the return on your
investment.
================================================================================
AVERAGE ANNUAL TOTAL RETURN
As of 10/31/96. Including sales charges
CLASS A SHARES
Inception (9/15/94) 16.21%
1 Year 11.69*
*17.26% excluding sales charge.
CLASS B SHARES
Inception (9/15/94) 17.12%
1 Year 11.60*
*16.60% excluding sales charge.
================================================================================
GROWTH OF A $10,000 INVESTMENT
Past performance is no guarantee of comparable future results.
- --------------------------------------------------------------------------------
AIM GLOBAL GROWTH AIM GLOBAL GROWTH MSCI WORLD
FUND, CLASS A FUND, CLASS B INDEX
- --------------------------------------------------------------------------------
(In thousands)
9/15/94 $9,524 $10,000 $10,000
11/30/94 9,333 9,790 9,585
2/28/95 9,404 9,850 9,677
5/31/95 10,366 10,840 10,593
8/31/95 11,471 11,990 10,878
11/30/95 11,967 12,490 11,407
2/28/96 12,572 13,105 12,033
5/31/96 13,493 14,051 12,538
8/31/96 13,192 13,715 12,303
10/31/96 13,764 13,995 12,878
(Data are for the month-ends shown)
================================================================================
Your Fund's total return includes sales charges, expenses, and management fees.
For Fund performance calculations and descriptions of indexes cited on this
page, please refer to the inside front cover.
4
<PAGE> 7
For Consideration
INVESTMENT STRATEGIES FOR 1997 TO KEEP YOU IN THE MARKET COME RAIN OR COME SHINE
DIVERSIFICATION: WEATHER-PROOFING
YOUR PORTFOLIO
As another investment year comes to a close, it's a good time to return to the
basics of investing: risk and reward. Focus on what you are trying to
accomplish--your reward--and ask yourself how much risk you are willing to
take.
You've probably often heard that the higher the risk, the higher the reward,
but that maxim doesn't always hold true. There are different types of risks,
and different types of investments may help buffer those risks.
DIVERSIFICATION AS A STRATEGY
With a diversified investment strategy, return depends on the
overall performance of the portfolio, rather than of one particular investment.
The gains of one sector may offset the losses of another.
Let's look at a core diversification strategy. Investments are classified
into several categories: cash or cash equivalents, income and growth. These
categories are made up of different securities and each meets basic needs:
o MONEY MARKET SECURITIES: ready cash for emergencies or other immediate needs;
o BONDS: current income to cover ongoing expenses;
o STOCKS: funds for the future.
All of these investment categories belong in a balanced, diversified
portfolio. The blend depends on your age, time horizon, objectives and
tolerance for risk. Money market securities are the most conservative, bonds
range from conservative to aggressive, and stocks generally are the most
aggressive investment. Each category reacts differently to the economy and
other factors affecting the financial markets.
Mutual funds fit well within a diversification strategy. A mutual fund
usually has one or two objectives, such as growth or income or both. It spreads
its professionally managed assets among a variety of investments. When you
invest in more than one fund, you decrease your level of exposure to investment
risks.
HOW SAFE IS SAFE? STOCKS HEDGE INFLATION
One such risk is inflation: a rise in cost without a rise in value received, a
decrease in the value of money over time. Inflation means that your investment
may lose purchasing power as the cost of living rises.
Overly risk-averse investors who prefer to keep their money in "safe"
investments
==========================================================
INFLATION'S SHRINKING EFFECT
- ----------------------------------------------------------
At 4% inflation, $1,000 would shrink to:
5 YEARS $822
10 YEARS $676
15 YEARS $555
20 YEARS $456
25 YEARS $375
==========================================================
==========================================================
STOCKS HISTORICALLY BEAT OTHER INVESTMENTS
- ----------------------------------------------------------
Average Annual Total Returns, Year End: 1925-1996*
*1996 is through 9/30/96
LARGE-COMPANY STOCKS 10.7%
LONG-TERM GOVERNMENT BONDS 5.1%
U.S. TREASURY BILLS 3.8%
INFLATION 3.1%
==========================================================
Source: Ibbotson Associates, Inc. The Standard & Poor's Composite Index of 500
Stocks (S&P 500) is a group of unmanaged securities widely regarded by
investors to be representative of large-company stocks in general; results
shown assume the reinvestment of dividends. Inflation is determined by the
Consumer Price Index, a measure of change in consumer prices, as determined by
the U.S. Bureau of Labor Statistics.
Government securities, such as U.S. Treasury bills and long-term government
bonds, offer a high degree of safety and are guaranteed as to the timely
payment of principal and interest if held to maturity. U.S. Treasury bills are
short-term securities with maturities of one year or less. Long-term government
bonds used in this illustration have a maturity of approximately 20 years. Fund
shares are not insured and their value and yield will vary with market
conditions.
---------------------
CONSIDER THE THREE Ds:
DIVERSIFICATION
DOLLAR-COST AVERAGING
DISCIPLINE
---------------------
(continued on page 6)
<PAGE> 8
(continued from page 5)
such as savings accounts may not have enough growth in their portfolio to
offset inflation. The charts on the previous page show inflation's shrinking
effect and how stocks historically have outperformed all other asset
categories.
BONDS AND MONEY MARKET SECURITIES OFFER BALLAST
Despite their long-term performance, stocks are subject to dramatic swings.
Investing in bonds and conservative money market securities may help offset
stocks' volatility. High-quality bonds usually are considered lower-risk
investments compared to stocks. They pay higher income than short-term
investments such as certificates of deposit, money market funds or savings
accounts. Bank certificates of deposit, which are insured by the FDIC for up to
$100,000, are short-term investments that pay fixed principal and interest, but
are subject to fluctuating rollover rates and early withdrawal penalties. Fund
shares are not insured and their value and yield will vary with market
conditions.
The "money market" is the marketplace for all debt securities of less than
one-year maturity. These securities are considered excellent short-term parking
places for cash that you may need quickly. Money market securities are among
the most conservative investments and, consequently, their level of return is
much lower than that of stocks or bonds.
Your financial consultant can help you create a diversification strategy to
meet your risk tolerance and long-term objectives.
AIM offers a free brochure on asset allocation which also can help you
evaluate your investments. To order, please call 800-347-4246.
DOLLAR-COST AVERAGING
The motto says buy low and sell high, but it's easy for an investor to buy high
and sell low instead. When markets are rising, the temptation to get in on the
action can be irresistible. When markets are dropping, people naturally want to
cut their losses and get out while the getting is good.
Is there a way to enjoy the advantages of having investments without
second-guessing your own decisions?
DOLLAR-COST AVERAGING EMPLOYS DISCIPLINE, NOT EMOTION
With dollar-cost averaging, you invest a set amount of money at regular
intervals regardless of market swings or pundits' forecasts. You decide how much
and how often to invest. And you decide when to change the amount or the
schedule if doing so suits you.
This technique has emotional advantages:
o You will be less tempted to make investment decisions
on the basis of short-term phenomena and your feelings of the moment.
o Whichever way the market is moving, you will be part of it. Your fortunes as
an investor won't depend entirely on your making a right call about future
trends.
Dollar-cost averaging also has financial advantages:
o You automatically purchase more shares of a mutual fund when its cost per
share is low and fewer shares when its cost per share is high. As the
illustration below shows, dollar-cost averaging may lower your average cost
per share.
Of course, you don't have to dollar-cost average all the money you invest.
The technique is especially appropriate to investments where your goals are
long-term, since over time market volatility tends to even itself out.
Dollar-cost averaging involves investing continuously regardless of
fluctuating securities prices, so you need to be confident that you can keep
making purchases for an extended period.
No investment technique can assure a profit in a declining market. What
dollar-cost averaging will do is apply discipline to your investing behavior,
discipline that can be especially important when market watchers issue
conflicting forecasts.
============================================================
DOLLAR-COST AVERAGING: $200 INVESTMENT PER MONTH*
- ------------------------------------------------------------
MONTH NET ASSET VALUE # OF SHARES PURCHASED
January $24.00 8.333
February $20.00 10.000
March $14.00 14.286
April $18.00 11.111
May $22.00 9.090
June $24.00 8.333
Average Net Asset Value: $20.33
Total Shares Bought: 61.153
Average Purchase Price per Share: $19.62
*Results are hypothetical.
============================================================
6
<PAGE> 9
SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-31.96%
ADVERTISING/BROADCASTING-0.22%
Interpublic Group of Companies, Inc. 11,000 $ 533,500
- ----------------------------------------------------------------
AEROSPACE/DEFENSE-0.36%
Boeing Co. (The) 4,000 381,500
- ----------------------------------------------------------------
Gulfstream Aerospace Corp.(a) 20,000 472,500
- ----------------------------------------------------------------
854,000
- ----------------------------------------------------------------
AIRLINES-0.08%
Sabre Group Holdings Inc.(a) 6,100 186,050
- ----------------------------------------------------------------
AUTOMOBILE (MANUFACTURERS)-0.10%
Chrysler Corp. 7,200 242,100
- ----------------------------------------------------------------
BANKING-0.26%
Citicorp 6,300 623,700
- ----------------------------------------------------------------
BEVERAGES (SOFT DRINKS)-0.25%
PepsiCo Inc. 20,000 592,500
- ----------------------------------------------------------------
BIOTECHNOLOGY-0.44%
AMGEN, Inc.(a) 7,000 429,187
- ----------------------------------------------------------------
Guidant Corp. 13,500 622,688
- ----------------------------------------------------------------
1,051,875
- ----------------------------------------------------------------
BUILDING MATERIALS-0.10%
Georgia-Pacific Corp. 3,000 225,000
- ----------------------------------------------------------------
BUSINESS SERVICES-0.96%
CUC International, Inc.(a) 18,000 441,000
- ----------------------------------------------------------------
Diebold, Inc. 8,700 500,250
- ----------------------------------------------------------------
Equifax, Inc. 32,200 957,950
- ----------------------------------------------------------------
Healthcare COMPARE Corp.(a) 6,000 264,000
- ----------------------------------------------------------------
Interim Services Inc.(a) 1,000 40,000
- ----------------------------------------------------------------
Olsten Corp. 3,000 60,000
- ----------------------------------------------------------------
2,263,200
- ----------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.33%
Morton International, Inc. 20,000 787,500
- ----------------------------------------------------------------
COMPUTER MINI/PCS-1.79%
COMPAQ Computer Corp.(a) 24,000 1,671,000
- ----------------------------------------------------------------
Dell Computer Corp.(a) 11,500 935,812
- ----------------------------------------------------------------
Gateway 2000, Inc.(a) 17,000 800,062
- ----------------------------------------------------------------
Sun Microsystems, Inc.(a) 13,700 835,700
- ----------------------------------------------------------------
4,242,574
- ----------------------------------------------------------------
COMPUTER NETWORKING-1.04%
Ascend Communications, Inc.(a) 14,000 915,250
- ----------------------------------------------------------------
Cabletron Systems, Inc.(a) 8,000 499,000
- ----------------------------------------------------------------
Cisco Systems, Inc.(a) 4,000 247,500
- ----------------------------------------------------------------
3Com Corp.(a) 12,000 811,500
- ----------------------------------------------------------------
2,473,250
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTER PERIPHERALS-0.18%
Storage Technology Corp.(a) 9,800 $ 417,725
- ----------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-3.51%
BMC Software, Inc.(a) 6,700 556,100
- ----------------------------------------------------------------
Cadence Design Systems, Inc.(a) 11,300 412,450
- ----------------------------------------------------------------
Ceridian Corp.(a) 12,000 595,500
- ----------------------------------------------------------------
Computer Associates International, Inc. 14,000 827,750
- ----------------------------------------------------------------
Computer Sciences Corp.(a) 5,200 386,100
- ----------------------------------------------------------------
Compuware Corp.(a) 15,900 838,725
- ----------------------------------------------------------------
Electronic Data Systems Corp. 15,400 693,000
- ----------------------------------------------------------------
Electronics for Imaging, Inc.(a) 700 50,400
- ----------------------------------------------------------------
First Data Corp. 5,000 398,750
- ----------------------------------------------------------------
Fiserv, Inc.(a) 11,500 441,312
- ----------------------------------------------------------------
Mechanical Dynamics, Inc.(a) 27,100 389,562
- ----------------------------------------------------------------
Microsoft Corp.(a) 3,000 411,750
- ----------------------------------------------------------------
Oracle Systems Corp.(a) 6,000 253,875
- ----------------------------------------------------------------
Parametric Technology Co.(a) 9,300 454,538
- ----------------------------------------------------------------
Sterling Commerce, Inc.(a) 32,500 914,062
- ----------------------------------------------------------------
Synopsys, Inc.(a) 5,700 256,500
- ----------------------------------------------------------------
Wallace Computer Services, Inc. 15,000 440,625
- ----------------------------------------------------------------
8,320,999
- ----------------------------------------------------------------
CONGLOMERATES-1.19%
AlliedSignal Inc. 13,000 851,500
- ----------------------------------------------------------------
Loews Corp. 5,400 446,175
- ----------------------------------------------------------------
Textron Inc. 4,200 372,750
- ----------------------------------------------------------------
Tyco International Ltd. 16,400 813,850
- ----------------------------------------------------------------
U.S. Industries, Inc.(a) 12,700 342,900
- ----------------------------------------------------------------
2,827,175
- ----------------------------------------------------------------
CONTAINERS-0.15%
Sealed Air Corp.(a) 9,000 349,875
- ----------------------------------------------------------------
COSMETICS & TOILETRIES-0.46%
Avon Products, Inc. 11,000 596,750
- ----------------------------------------------------------------
Gillette Co. (The) 6,600 493,350
- ----------------------------------------------------------------
1,090,100
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-0.50%
Amphenol Corp.(a) 700 13,912
- ----------------------------------------------------------------
Checkpoint Systems, Inc.(a) 24,000 537,000
- ----------------------------------------------------------------
Photon Dynamics, Inc.(a) 9,400 61,688
- ----------------------------------------------------------------
Thermo Instrument Systems, Inc.(a) 5,200 157,300
- ----------------------------------------------------------------
Waters Corp.(a) 13,500 418,500
- ----------------------------------------------------------------
1,188,400
- ----------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.19%
Bear Stearns Companies, Inc. 90 2,126
- ----------------------------------------------------------------
Franklin Resources, Inc. 5,000 352,500
- ----------------------------------------------------------------
PaineWebber Group Inc. 4,500 105,750
- ----------------------------------------------------------------
460,376
- ----------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCE (CONSUMER CREDIT)-1.54%
Beneficial Corp. 3,100 $ 181,350
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp. 9,700 979,700
- ----------------------------------------------------------------
Federal National Mortgage Association 13,500 528,188
- ----------------------------------------------------------------
Finova Group, Inc. 6,000 370,500
- ----------------------------------------------------------------
Green Tree Financial Corp. 7,000 277,375
- ----------------------------------------------------------------
Student Loan Marketing Association 9,300 769,575
- ----------------------------------------------------------------
SunAmerica, Inc. 7,200 270,000
- ----------------------------------------------------------------
T. Rowe Price Associates 7,700 262,762
- ----------------------------------------------------------------
3,639,450
- ----------------------------------------------------------------
FOOD/PROCESSING-0.40%
ConAgra, Inc. 6,900 344,138
- ----------------------------------------------------------------
Dean Foods Co. 20,500 594,500
- ----------------------------------------------------------------
938,638
- ----------------------------------------------------------------
GAMING-0.17%
International Game Technology 19,500 411,937
- ----------------------------------------------------------------
HOTELS/MOTELS-0.36%
Hilton Hotels Corp. 16,000 486,000
- ----------------------------------------------------------------
Host Marriott Corp.(a) 23,000 353,625
- ----------------------------------------------------------------
839,625
- ----------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.43%
Conseco Inc. 12,000 642,000
- ----------------------------------------------------------------
Equitable Companies, Inc. 16,500 387,750
- ----------------------------------------------------------------
1,029,750
- ----------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-1.31%
American International Group, Inc. 3,900 423,638
- ----------------------------------------------------------------
CIGNA Corp. 3,000 391,500
- ----------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 8,100 206,550
- ----------------------------------------------------------------
ITT Hartford Group, Inc. 7,000 441,000
- ----------------------------------------------------------------
MGIC Investment Corp. 6,300 432,338
- ----------------------------------------------------------------
Old Republic International Corp. 9,100 225,225
- ----------------------------------------------------------------
TIG Holdings, Inc. 4,200 121,275
- ----------------------------------------------------------------
Travelers Group, Inc. 15,800 857,150
- ----------------------------------------------------------------
3,098,676
- ----------------------------------------------------------------
LEISURE & RECREATION-0.40%
Coleman Company, Inc. (The)(a) 3,800 50,350
- ----------------------------------------------------------------
Harley-Davidson, Inc. 20,000 902,500
- ----------------------------------------------------------------
952,850
- ----------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.05%
Thermo Electron Corp. (a) 3,000 109,500
- ----------------------------------------------------------------
MEDICAL (DRUGS)-1.87%
Abbott Laboratories 6,000 303,750
- ----------------------------------------------------------------
American Home Products Corp. 6,500 398,125
- ----------------------------------------------------------------
AmeriSource Health Corp.(a) 2,000 84,750
- ----------------------------------------------------------------
Bristol-Myers Squibb Co. 4,000 423,000
- ----------------------------------------------------------------
Cardinal Health, Inc. 4,500 353,250
- ----------------------------------------------------------------
ICN Pharmaceuticals, Inc. 11,400 216,600
- ----------------------------------------------------------------
Johnson & Johnson 1,000 49,250
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEDICAL (DRUGS)-(CONTINUED)
Merck & Co., Inc. 8,000 $ 593,000
- ----------------------------------------------------------------
Pfizer, Inc. 2,500 206,875
- ----------------------------------------------------------------
Pharmacia & UpJohn, Inc. 11,000 396,000
- ----------------------------------------------------------------
Rhone-Poulenc Rorer, Inc. 10,300 691,387
- ----------------------------------------------------------------
Schering-Plough Corp. 7,400 473,600
- ----------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 7,400 246,975
- ----------------------------------------------------------------
4,436,562
- ----------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-1.19%
Columbia/HCA Healthcare Corp. 13,650 487,988
- ----------------------------------------------------------------
HEALTHSOUTH Corp.(a) 22,000 825,000
- ----------------------------------------------------------------
Living Centers of America, Inc.(a) 5,000 116,875
- ----------------------------------------------------------------
MedPartners, Inc.(a) 23,310 492,424
- ----------------------------------------------------------------
Quorum Health Group, Inc.(a) 20,100 542,700
- ----------------------------------------------------------------
Tenet Healthcare Corp.(a) 16,900 352,788
- ----------------------------------------------------------------
2,817,775
- ----------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-1.08%
Baxter International Inc. 4,100 170,662
- ----------------------------------------------------------------
Becton, Dickinson & Co. 9,200 400,200
- ----------------------------------------------------------------
Innovasive Devices, Inc.(a) 24,200 223,850
- ----------------------------------------------------------------
Medtronic, Inc. 5,000 321,875
- ----------------------------------------------------------------
Stryker Corp. 22,000 654,500
- ----------------------------------------------------------------
Sybron International Corp.(a) 14,000 407,750
- ----------------------------------------------------------------
U.S. Surgical Corp. 8,500 355,938
- ----------------------------------------------------------------
2,534,775
- ----------------------------------------------------------------
NATURAL GAS PIPELINE-0.48%
Columbia Gas System, Inc. 14,000 850,500
- ----------------------------------------------------------------
Williams Companies, Inc. (The) 5,500 287,375
- ----------------------------------------------------------------
1,137,875
- ----------------------------------------------------------------
OFFICE AUTOMATION-0.02%
Xerox Corp. 1,200 55,650
- ----------------------------------------------------------------
OFFICE PRODUCTS-0.09%
Reynolds & Reynolds Co.-Class A 8,000 211,000
- ----------------------------------------------------------------
OIL & GAS (DRILLING)-0.30%
Reading & Bates Corp.(a) 17,000 488,750
- ----------------------------------------------------------------
Transocean Offshore Inc. 3,500 221,375
- ----------------------------------------------------------------
710,125
- ----------------------------------------------------------------
OIL & GAS (SERVICES)-0.40%
Louisiana Land & Exploration Co. 3,400 193,375
- ----------------------------------------------------------------
NorAm Energy Corp. 47,600 731,850
- ----------------------------------------------------------------
925,225
- ----------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-1.47%
Baker Hughes, Inc. 23,000 819,375
- ----------------------------------------------------------------
Coastal Corp. 8,400 361,200
- ----------------------------------------------------------------
Cooper Cameron Corp.(a) 2,500 159,688
- ----------------------------------------------------------------
Dresser Industries, Inc. 10,000 328,750
- ----------------------------------------------------------------
Halliburton Co. 7,000 396,375
- ----------------------------------------------------------------
Rowan Companies., Inc.(a) 25,000 559,375
- ----------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL EQUIPMENT & SUPPLIES-(CONTINUED)
Schlumberger Ltd. 4,300 $ 426,238
- ----------------------------------------------------------------
Tidewater, Inc. 10,000 437,500
- ----------------------------------------------------------------
3,488,501
- ----------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.20%
Kimberly-Clark Corp. 5,000 466,250
- ----------------------------------------------------------------
PUBLISHING-0.23%
New York Times Co. 11,000 397,375
- ----------------------------------------------------------------
Times Mirror Co. (The) 3,200 148,000
- ----------------------------------------------------------------
545,375
- ----------------------------------------------------------------
RETAIL (FOOD & DRUGS)-0.50%
American Stores Co. 13,000 537,875
- ----------------------------------------------------------------
Kroger Co. (The)(a) 9,800 437,325
- ----------------------------------------------------------------
Safeway, Inc.(a) 4,600 197,225
- ----------------------------------------------------------------
1,172,425
- ----------------------------------------------------------------
RETAIL (STORES)-2.72%
Consolidated Stores Corp.(a) 4,500 173,812
- ----------------------------------------------------------------
Dayton-Hudson Corp. 12,000 415,500
- ----------------------------------------------------------------
Federated Department Stores, Inc.(a) 15,000 495,000
- ----------------------------------------------------------------
Gap, Inc. (The) 12,000 348,000
- ----------------------------------------------------------------
Home Depot, Inc. 16,800 919,800
- ----------------------------------------------------------------
Lowe's Companies, Inc. 20,800 839,800
- ----------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 22,500 787,500
- ----------------------------------------------------------------
Price/Costco Inc.(a) 5,200 103,350
- ----------------------------------------------------------------
Saks Holdings, Inc.(a) 12,400 434,000
- ----------------------------------------------------------------
Staples, Inc.(a) 25,575 476,335
- ----------------------------------------------------------------
Sysco Corp. 12,500 425,000
- ----------------------------------------------------------------
Toys "R" Us, Inc.(a) 26,000 880,750
- ----------------------------------------------------------------
Viking Office Products Inc.(a) 5,000 145,625
- ----------------------------------------------------------------
6,444,472
- ----------------------------------------------------------------
SEMICONDUCTORS-0.99%
Altera Corp.(a) 10,000 620,000
- ----------------------------------------------------------------
Intel Corp. 12,000 1,318,500
- ----------------------------------------------------------------
Texas Instruments, Inc. 8,500 409,062
- ----------------------------------------------------------------
2,347,562
- ----------------------------------------------------------------
SHOES & RELATED APPAREL-0.38%
Nike Inc. -Class B 14,400 847,800
- ----------------------------------------------------------------
Nine West Group, Inc.(a) 1,200 59,850
- ----------------------------------------------------------------
907,650
- ----------------------------------------------------------------
TELECOMMUNICATIONS-1.76%
ADC Telecommunications, Inc.(a) 15,100 1,032,462
- ----------------------------------------------------------------
Andrew Corp.(a) 12,000 585,000
- ----------------------------------------------------------------
Frontier Corp. 8,200 237,800
- ----------------------------------------------------------------
Lucent Technologies Inc. 14,000 658,000
- ----------------------------------------------------------------
MFS Communications Co., Inc.(a) 11,300 566,413
- ----------------------------------------------------------------
Tellabs, Inc.(a) 3,000 255,375
- ----------------------------------------------------------------
360 Communications Co.(a) 1,500 33,938
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELECOMMUNICATIONS-(CONTINUED)
Western Wireless Corp.-Class A(a) 13,000 $ 214,500
- ----------------------------------------------------------------
WorldCom, Inc.(a) 23,600 575,250
- ----------------------------------------------------------------
4,158,738
- ----------------------------------------------------------------
TELEPHONE-0.22%
Cincinnati Bell, Inc. 10,500 518,437
- ----------------------------------------------------------------
TEXTILES-0.36%
Fruit of the Loom, Inc.-Class A(a) 13,300 483,787
- ----------------------------------------------------------------
Liz Claiborne, Inc. 8,500 359,125
- ----------------------------------------------------------------
842,912
- ----------------------------------------------------------------
TOBACCO-0.93%
Philip Morris Companies, Inc. 7,000 648,375
- ----------------------------------------------------------------
RJR Nabisco Holdings Corp. 28,800 831,600
- ----------------------------------------------------------------
Universal Corp. 6,800 185,300
- ----------------------------------------------------------------
UST, Inc. 19,000 548,625
- ----------------------------------------------------------------
2,213,900
- ----------------------------------------------------------------
Total Domestic Common Stocks 75,685,534
- ----------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-64.12%
ARGENTINA-1.10%
Banco de Galicia y Buenos Aires S.A.
de C.V. (Banking) 28,409 514,913
- ----------------------------------------------------------------
Perez Companc S.A.-Class B
(Oil & Gas-Services) 93,000 590,609
- ----------------------------------------------------------------
YPF Socidad Anonima-ADR
(Oil & Gas-Services) 65,600 1,492,400
- ----------------------------------------------------------------
2,597,922
- ----------------------------------------------------------------
AUSTRALIA-2.38%
National Mutual Holdings Ltd.(a)
(Insurance-Multi-Line Property) 600,000 856,056
- ----------------------------------------------------------------
News Corp. Ltd. (The)-ADR
(Publishing) 48,000 852,000
- ----------------------------------------------------------------
QBE Insurance Group Ltd.
(Insurance-Multi-Line Property) 181,125 959,032
- ----------------------------------------------------------------
QNI Ltd.
(Metals-Miscellaneous) 761,700 1,533,543
- ----------------------------------------------------------------
Western Mining Corp. Holdings Ltd.
(Metals-Miscellaneous) 228,200 1,434,390
- ----------------------------------------------------------------
5,635,021
- ----------------------------------------------------------------
AUSTRIA-0.63%
OMV AG
(Oil & Gas-Services) 9,400 920,193
- ----------------------------------------------------------------
VA Technologie AG
(Engineering & Construction) 4,100 573,373
- ----------------------------------------------------------------
1,493,566
- ----------------------------------------------------------------
BELGIUM-1.52%
Barco Industries(a)
(Electronic Components/Miscellaneous) 5,700 937,512
- ----------------------------------------------------------------
Colruyt S.A.
(Retail-Food & Drug) 1,100 474,351
- ----------------------------------------------------------------
Delhaize-Le Lion S.A.
(Retail-Food & Drug) 18,500 1,035,027
- ----------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
BELGIUM-(CONTINUED)
UCB S.A.
(Medical-Drugs) 520 $ 1,146,201
- ----------------------------------------------------------------
3,593,091
- ----------------------------------------------------------------
BRAZIL-0.61%
Telecommuicacoes Brasileiras
S.A.-Telebras-ADR
(Telecommunications) 19,400 1,445,300
- ----------------------------------------------------------------
CANADA-2.57%
Canadian National Railway Co.
(Railroads) 21,000 577,500
- ----------------------------------------------------------------
Canadian Natural Resources Ltd.(a)
(Oil & Gas-Exploration &
Production) 48,000 1,192,658
- ----------------------------------------------------------------
Canadian Pacific Ltd.
(Transportation-Miscellaneous) 43,000 1,085,750
- ----------------------------------------------------------------
Newbridge Networks Corp.(a)
(Computer Networking) 26,000 822,250
- ----------------------------------------------------------------
Northern Telecom Ltd.
(Telecommunications) 7,500 488,437
- ----------------------------------------------------------------
Suncor, Inc.
(Oil & Gas-Exploration & Production) 28,000 1,081,182
- ----------------------------------------------------------------
TELUS Corp.
(Telecommunications) 54,000 848,157
- ----------------------------------------------------------------
6,095,934
- ----------------------------------------------------------------
CHILE-0.30%
Compania de Telecomunicaciones de
Chile S.A.-ADR (Telephone) 7,200 710,100
- ----------------------------------------------------------------
DENMARK-0.29%
Danisco A/S
(Food/Processing) 5,100 292,191
- ----------------------------------------------------------------
Novo-Nordisk A/S-Class B
(Medical-Drugs) 2,450 408,031
- ----------------------------------------------------------------
700,222
- ----------------------------------------------------------------
FRANCE-6.23%
AXA S.A.
(Insurance-Life & Health) 18,500 1,155,413
- ----------------------------------------------------------------
Carrefour Supermarche
(Retail-Food & Drug) 2,800 1,553,760
- ----------------------------------------------------------------
Cetelem
(Finance-Consumer Credit) 2,100 448,137
- ----------------------------------------------------------------
Compagnie Generale Des Eaux
(Water Supply) 9,700 1,159,257
- ----------------------------------------------------------------
Elf Aquitaine S.A.
(Oil & Gas-Services) 13,500 1,079,472
- ----------------------------------------------------------------
Essilor International-Compagnie
Generale d'Optique
(Medical Instruments/Products) 1,100 289,389
- ----------------------------------------------------------------
Michelin-Class B
(Automobile/Trucks Parts & Tires) 10,200 491,795
- ----------------------------------------------------------------
Pathe S.A.(a)
(Advertising/Broadcasting) 3,850 1,038,465
- ----------------------------------------------------------------
Pinault-Printemps-Redoute, S.A.
(Retail-Stores) 2,900 1,093,633
- ----------------------------------------------------------------
Rexel S.A.
(Electronic Components/Miscellaneous) 2,600 770,465
- ----------------------------------------------------------------
Rhone-Poulenc-Class A
(Chemicals) 21,000 622,298
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-(CONTINUED)
Roussel Uclaf
(Medical-Drugs) 2,100 $ 555,756
- ----------------------------------------------------------------
Societe BIC S.A.
(Office Products) 8,050 1,207,697
- ----------------------------------------------------------------
Societe Technip
(Engineering & Construction) 6,600 576,927
- ----------------------------------------------------------------
Sodexho S.A.
(Business Services) 1,100 531,658
- ----------------------------------------------------------------
Total S.A.-Class B
(Oil & Gas-Exploration & Production) 13,100 1,024,683
- ----------------------------------------------------------------
Valeo S.A.
(Automobile/Trucks Parts & Tires) 19,400 1,164,190
- ----------------------------------------------------------------
14,762,995
- ----------------------------------------------------------------
GERMANY-3.90%
Adidas A.G.
(Shoes & Related Apparel) 18,800 1,611,358
- ----------------------------------------------------------------
Altana A.G.
(Chemicals) 1,850 1,478,143
- ----------------------------------------------------------------
Commerzbank A.G.
(Banking) 44,000 984,945
- ----------------------------------------------------------------
Continental A.G.
(Automobile/Trucks Parts & Tires) 29,600 517,961
- ----------------------------------------------------------------
Dresdner Bank A.G.
(Banking) 36,000 962,758
- ----------------------------------------------------------------
Hoechst A.G.
(Chemicals) 40,300 1,515,508
- ----------------------------------------------------------------
SGL Carbon A.G.
(Metals-Miscellaneous) 6,000 675,515
- ----------------------------------------------------------------
SKW Trostberg A.G.
(Chemicals) 17,850 520,979
- ----------------------------------------------------------------
Veba A.G.
(Electric Power) 18,000 960,024
- ----------------------------------------------------------------
9,227,191
- ----------------------------------------------------------------
HONG KONG-5.82%
Asia Satellite Telecommunications
Holdings Ltd.-ADR
(Telecommunications)(a) 24,500 655,375
- ----------------------------------------------------------------
Cheung Kong Holdings Ltd.
(Real Estate) 267,000 2,140,917
- ----------------------------------------------------------------
Citic Pacific Ltd.
(Banking) 135,000 656,476
- ----------------------------------------------------------------
Cosco Pacific Ltd.
(Transportation-Miscellaneous) 1,560,000 1,492,977
- ----------------------------------------------------------------
First Pacific Co.
(Conglomerates) 901,000 1,240,999
- ----------------------------------------------------------------
Hang Seng Bank Ltd.
(Banking) 166,500 1,975,683
- ----------------------------------------------------------------
Hong Kong & China Gas Company Ltd.
(Electric Power) 579,000 1,018,391
- ----------------------------------------------------------------
Hong Kong & China Gas Company
Ltd.-Warrants(a)
Expiring 1997 (Electric Power) 36,000 13,269
- ----------------------------------------------------------------
HSBC Holdings PLC
(Banking) 93,400 1,902,499
- ----------------------------------------------------------------
New World Infrastructure Ltd.(a)
(Building Materials) 422,000 1,050,607
- ----------------------------------------------------------------
Sun Hung Kai Properties Ltd.
(Real Estate) 105,600 1,201,831
- ----------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HONG KONG-(CONTINUED)
Varitronix International Ltd.
(Electronic Components/Miscellaneous) 240,000 $ 437,650
- ----------------------------------------------------------------
13,786,674
- ----------------------------------------------------------------
INDONESIA-1.19%
PT Bank Internasional Indonesia
(Banking) 439,000 706,757
- ----------------------------------------------------------------
PT Hanjaya Mandala Sampoerna
(Tobacco) 172,000 1,598,678
- ----------------------------------------------------------------
PT Indosat
(Telecommunications) 84,500 255,753
- ----------------------------------------------------------------
PT Indosat-ADR
(Telecommunications) 9,050 272,631
- ----------------------------------------------------------------
2,833,819
- ----------------------------------------------------------------
IRELAND-0.11%
Elan Corp. PLC-ADR(a)
(Medical-Drugs) 9,200 255,300
- ----------------------------------------------------------------
ISRAEL-0.58%
ECI Telecommunications Ltd.
(Computer Networking) 14,000 280,000
- ----------------------------------------------------------------
Teva Pharmaceutical Industries Ltd.-ADR
(Medical-Drugs) 26,500 1,109,687
- ----------------------------------------------------------------
1,389,687
- ----------------------------------------------------------------
ITALY-2.54%
Edison S.p.A.
(Electric Power) 187,000 1,114,111
- ----------------------------------------------------------------
Ente Nazionale Idrocarburi S.p.A
(Oil & Gas-Exploration & Production) 290,000 1,387,106
- ----------------------------------------------------------------
Fila Holding S.p.A.-ADR
(Retail-Stores) 5,400 388,800
- ----------------------------------------------------------------
Istituto Mobiliare Italiano S.p.A.
(Banking) 48,700 385,748
- ----------------------------------------------------------------
Parmalat Finanziaria S.p.A
(Food/Processing) 620,000 886,473
- ----------------------------------------------------------------
Telecom Italia Mobile S.p.A.
(Telecommunications) 460,000 948,504
- ----------------------------------------------------------------
Telecom Italia S.p.A.
(Telecommunications) 410,000 916,757
- ----------------------------------------------------------------
6,027,499
- ----------------------------------------------------------------
JAPAN-10.54%
Alpine Electronics Inc.
(Electronic Components/Miscellaneous) 57,000 901,146
- ----------------------------------------------------------------
Amada Co., Ltd.
(Building Materials-Tools) 89,000 766,062
- ----------------------------------------------------------------
Bridgestone Corp.
(Automobile/Trucks Parts & Tires) 82,000 1,382,811
- ----------------------------------------------------------------
Canon, Inc.
(Office Automation) 79,000 1,512,626
- ----------------------------------------------------------------
Daiichi Corp.
(Electronic Components/Miscellaneous) 28,300 668,631
- ----------------------------------------------------------------
DDI Corp.
(Telecommunications) 180 1,351,719
- ----------------------------------------------------------------
Honda Motor Co.
(Automobile-Manufacturers) 73,000 1,743,973
- ----------------------------------------------------------------
Ibiden Co. Ltd.
(Building Materials) 87,000 809,978
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
Jusco Co.
(Retail-Stores) 45,000 $ 1,335,910
- ----------------------------------------------------------------
Komatsu Ltd.
(Machinery-Heavy) 139,000 1,137,833
- ----------------------------------------------------------------
Matsushita Electric Industrial Co. Ltd.
(Electronic Components-Miscellaneous) 61,000 975,100
- ----------------------------------------------------------------
Nippon Television Network
(Advertising/Broadcasting) 2,050 594,177
- ----------------------------------------------------------------
Nomura Securities Co., Ltd.
(Finance-Asset Management) 68,000 1,122,832
- ----------------------------------------------------------------
NSK Ltd.
(Metals-Miscellaneous) 92,000 609,266
- ----------------------------------------------------------------
NTT Data Communications Systems Co.
(Computer Software/Services) 470 1,391,155
- ----------------------------------------------------------------
Okuma Corp.(a)
(Machine Tools) 78,000 746,739
- ----------------------------------------------------------------
Ricoh Co., Ltd.
(Office Automation) 124,000 1,230,688
- ----------------------------------------------------------------
Shizuoka Bank
(Banking) 40,000 456,721
- ----------------------------------------------------------------
SMC
(Machinery-Miscellaneous) 6,800 440,771
- ----------------------------------------------------------------
Sony Corp.
(Electronic Components/Miscellaneous) 19,900 1,193,773
- ----------------------------------------------------------------
Sumitomo Heavy Industries, Ltd.(a)
(Machinery-Heavy) 250,000 880,506
- ----------------------------------------------------------------
TDK Corp.
(Electronic Components/Miscellaneous) 22,000 1,290,765
- ----------------------------------------------------------------
Toyota Motor Corp.
(Automobile-Manufacturers) 39,000 921,435
- ----------------------------------------------------------------
Yamaha Corp.
(Electronic Components/Miscellaneous) 48,000 729,349
- ----------------------------------------------------------------
Yamatake-Honeywell
(Airlines) 45,000 754,908
- ----------------------------------------------------------------
24,948,874
- ----------------------------------------------------------------
MALAYSIA-1.17%
Commerce Asset Holdings Berhad
(Finance-Asset Management) 93,000 607,362
- ----------------------------------------------------------------
Edaran Otomobil Nasional Berhad
(Automobile-Manufacturers) 70,000 653,869
- ----------------------------------------------------------------
Malayan Banking Berhad
(Banking) 109,000 1,078,567
- ----------------------------------------------------------------
YTL Corp. Berhad
(Engineering & Construction) 82,000 441,401
- ----------------------------------------------------------------
2,781,199
- ----------------------------------------------------------------
MEXICO-1.26%
Grupo Industrial Maseca, S.A. de
C.V.-Class B
(Food/Processing) 1,181,000 1,437,036
- ----------------------------------------------------------------
Grupo Televisa S.A.-GDR(a)
(Advertising/Broadcasting) 22,000 577,500
- ----------------------------------------------------------------
Panamerican Beverages, Inc.
(Beverages-Soft Drinks) 22,400 977,200
- ----------------------------------------------------------------
2,991,736
- ----------------------------------------------------------------
NETHERLANDS-3.32%
Akzo Nobel
(Conglomerates) 5,900 743,455
- ----------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-(CONTINUED)
Elsevier N.V.
(Publishing) 23,000 $ 382,271
- ----------------------------------------------------------------
Getronics N.V.
(Computer Software/Services) 41,000 1,007,662
- ----------------------------------------------------------------
Gucci Group N.V.-New York Shares-ADR
(Textiles) 12,000 828,000
- ----------------------------------------------------------------
Koninklijke Ahold N.V.
(Retail-Food & Drug) 10,200 595,155
- ----------------------------------------------------------------
Nutricia Verenigde Bedrijven N.V.
(Food/Processing) 13,000 1,823,540
- ----------------------------------------------------------------
Oce-Van Der Grinten N.V.
(Office Automation) 7,000 746,744
- ----------------------------------------------------------------
Royal Dutch Petroleum Co.
(Oil & Gas-Services) 6,600 1,089,951
- ----------------------------------------------------------------
Ver Ned Uitgevuer Bezit N.V.
(Publishing) 15,500 281,370
- ----------------------------------------------------------------
Wolters Kluwer N.V.
(Publishing) 2,850 366,349
- ----------------------------------------------------------------
7,864,497
- ----------------------------------------------------------------
NORWAY-0.09%
UNI Storebrand A.S.(a)
(Insurance-Multi-Line Property) 35,000 205,147
- ----------------------------------------------------------------
PHILIPPINES-0.92%
C & P Homes, Inc.
(Homebuilding) 954,000 435,616
- ----------------------------------------------------------------
Filinvest Land Inc.(a)
(Real Estate) 1,031,700 349,396
- ----------------------------------------------------------------
Metro Pacific Corp.
(Conglomerates) 2,309,000 562,314
- ----------------------------------------------------------------
Metropolitan Bank & Trust Co.
(Banking) 14,375 317,256
- ----------------------------------------------------------------
Southeast Asia Cement Holdings, Inc.(a)
(Building Materials) 5,300,000 504,186
- ----------------------------------------------------------------
2,168,768
- ----------------------------------------------------------------
PORTUGAL-0.19%
Portugal Telecom S.A.(a)
(Telecommunications) 17,000 442,078
- ----------------------------------------------------------------
SINGAPORE-1.61%
Cerebos Pacific Ltd.
(Food/Processing) 82,000 634,576
- ----------------------------------------------------------------
City Developments Ltd.
(Real Estate) 129,000 1,016,613
- ----------------------------------------------------------------
DBS Land Ltd.
(Real Estate) 416,000 1,311,353
- ----------------------------------------------------------------
Overseas Union Bank Ltd.
(Banking) 125,000 851,970
- ----------------------------------------------------------------
3,814,512
- ----------------------------------------------------------------
SOUTH AFRICA-0.76%
De Beers Centenary A.G.
(Gold & Silver Mining) 28,000 826,425
- ----------------------------------------------------------------
Sasol Ltd.
(Oil & Gas-Exploration &
Production) 80,100 977,246
- ----------------------------------------------------------------
1,803,671
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SPAIN-1.52%
Empresa Nacional de Electricidad, S.A.
(Electric Power) 23,100 $ 1,413,935
- ----------------------------------------------------------------
Iberdrola S.A.
(Electric Power) 77,000 817,704
- ----------------------------------------------------------------
Repsol S.A.
(Oil & Gas-Services) 8,300 270,931
- ----------------------------------------------------------------
Telefonica De Espana
(Telecommunications) 54,400 1,091,453
- ----------------------------------------------------------------
3,594,023
- ----------------------------------------------------------------
SWEDEN-1.78%
Astra AB-Class A
(Medical-Drugs) 7,550 346,746
- ----------------------------------------------------------------
Astra AB-B Shares
(Medical-Drugs) 2,500 114,056
- ----------------------------------------------------------------
Autoliv AB
(Automobile/Trucks Parts & Tires) 30,600 1,298,326
- ----------------------------------------------------------------
Hennes & Mauritz AB-B Shares
(Retail-Stores) 10,300 1,364,311
- ----------------------------------------------------------------
Securitas AB
(Security & Safety Services) 18,300 473,106
- ----------------------------------------------------------------
Telefonaktiebolaget L.M. Ericsson-ADR
(Telecommunications) 22,000 607,750
- ----------------------------------------------------------------
4,204,295
- ----------------------------------------------------------------
SWITZERLAND-0.88%
Ciba-Geigy A.G.
(Chemicals) 650 800,672
- ----------------------------------------------------------------
Sandoz A.G.
(Chemicals) 700 809,098
- ----------------------------------------------------------------
Swissair A.G.(a)
(Airlines) 600 467,563
- ----------------------------------------------------------------
2,077,333
- ----------------------------------------------------------------
THAILAND-0.56%
Bank of Ayudhya Ltd.
(Banking) 11,400 32,642
- ----------------------------------------------------------------
Krung Thai Bank PLC
(Banking) 230,000 622,475
- ----------------------------------------------------------------
Siam Commercial Bank PLC Co. Ltd.
(Banking) 21,900 199,286
- ----------------------------------------------------------------
Thai Farmers Bank PLC
(Banking) 40,900 312,826
- ----------------------------------------------------------------
Thai Farmers Bank PLC-Rights(a)
(Banking) 5,163 2,695
- ----------------------------------------------------------------
Total Access Communication PLC
(Telecommunications) 20,000 138,000
- ----------------------------------------------------------------
1,307,924
- ----------------------------------------------------------------
UNITED KINGDOM-9.75%
Airtours PLC
(Leisure & Recreation) 56,000 594,271
- ----------------------------------------------------------------
Argos PLC
(Retail-Stores) 22,680 284,792
- ----------------------------------------------------------------
B.A.T. Industries PLC
(Conglomerates) 182,000 1,267,839
- ----------------------------------------------------------------
Barclays PLC
(Finance-Consumer Credit) 72,000 1,129,102
- ----------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
Bass PLC
(Beverages-Alcoholic) 24,000 $ 307,813
- ----------------------------------------------------------------
British Aerospace PLC
(Aerospace/Defense) 32,000 606,771
- ----------------------------------------------------------------
British Petroleum Co. PLC
(Oil & Gas-Services) 31,000 333,512
- ----------------------------------------------------------------
Burton Group PLC
(Retail-Stores) 473,000 1,149,011
- ----------------------------------------------------------------
Caradon PLC
(Building & Materials) 136,000 534,570
- ----------------------------------------------------------------
Compass Group PLC
(Food Processing) 59,200 586,797
- ----------------------------------------------------------------
Danka Business Systems PLC-ADR
(Office Automation) 16,100 637,962
- ----------------------------------------------------------------
Dixons Group PLC
(Retail-Stores) 164,000 1,469,434
- ----------------------------------------------------------------
FKI PLC
(Conglomerates) 155,000 529,785
- ----------------------------------------------------------------
General Electric Co. PLC
(Electronic
Components/Miscellaneous) 160,000 988,281
- ----------------------------------------------------------------
GKN PLC
(Automobile/Trucks Parts & Tires) 39,000 733,154
- ----------------------------------------------------------------
Granada Group PLC
(Leisure & Recreation) 101,400 1,458,120
- ----------------------------------------------------------------
Kingfisher PLC
(Retail-Stores) 46,800 497,402
- ----------------------------------------------------------------
Marks & Spencer PLC
(Retail-Stores) 110,000 923,828
- ----------------------------------------------------------------
Medeva PLC
(Medical-Drugs) 67,200 288,750
- ----------------------------------------------------------------
MFI Furniture Group PLC
(Retail-Stores) 355,000 1,155,599
- ----------------------------------------------------------------
Next PLC
(Retail-Stores) 77,000 701,823
- ----------------------------------------------------------------
NFC PLC
(Transportation-Miscellaneous) 325,000 1,015,625
- ----------------------------------------------------------------
Peninsular and Oriental Steam
Navigation Co. (The)
(Transportation-Miscellaneous) 56,000 550,065
- ----------------------------------------------------------------
Provident Financial PLC
(Finance-Consumer Credit) 137,400 1,029,829
- ----------------------------------------------------------------
Rentokil Group PLC
(Business Services) 100,000 671,387
- ----------------------------------------------------------------
Siebe PLC
(Electronic
Components/Miscellaneous) 75,000 1,176,757
- ----------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
SmithKline Beecham PLC-ADR
(Medical-Drugs) 7,000 $ 438,375
- ----------------------------------------------------------------
Smiths Industries PLC
(Electronic/Defense) 30,000 400,390
- ----------------------------------------------------------------
Standard Chartered PLC
(Finance-Asset Management) 41,500 447,826
- ----------------------------------------------------------------
WPP Group PLC
(Advertising/Broadcasting) 316,000 1,172,655
- ----------------------------------------------------------------
23,081,525
- ----------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 151,839,903
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(b)
<S> <C> <C>
CONVERTIBLE BONDS-0.32%
Boston Chicken Inc.,
Conv. Liquid Yield Option Notes,
(Restaurants)(c) 8.00%, 06/01/15 $2,310,000 747,863
- ----------------------------------------------------------------
U.S. DOLLAR DENOMINATED FOREIGN BONDS
& NOTES-0.45%
BERMUDA-0.11%
MBL Intl. Finance Bermuda,
Conv. Yankee Bonds, (Banking)
3.00%, 11/30/02 230,000 257,025
- ----------------------------------------------------------------
JAPAN-0.34%
Sumitomo Bank,
Conv. American Depository Notes,
(Banking)
0.75%, 05/31/01 850,000 811,750
- ----------------------------------------------------------------
Total U.S. Dollar Denominated
Foreign Bonds & Notes 1,068,775
- ----------------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED FOREIGN
BONDS & NOTES
ITALY-0.47%
Pirelli S.p.A.,
Conv. Bonds, (Automobile/Trucks
Parts & Tires)
5.00%, 12/31/98 ITL 1,591,686,200 1,114,810
- ----------------------------------------------------------------
REPURCHASE AGREEMENTS-2.73%(d)
Daiwa Securities America Inc., 5.53%,
11/01/96(e) 490,720 490,720
- ----------------------------------------------------------------
Dresdner Securities, Inc.,
5.54%,11/01/96(f) 6,000,000 6,000,000
- ----------------------------------------------------------------
Total Repurchase Agreements 6,490,720
- ----------------------------------------------------------------
TOTAL INVESTMENTS-100.05% 236,947,605
- ----------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(0.05)% (128,433)
- ----------------------------------------------------------------
NET ASSETS-100.00% $236,819,172
================================================================
</TABLE>
Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
GDR - Global Depository Receipt
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Principal in U.S. Dollars unless otherwise indicated.
(c) Zero coupon bond. The interest rate shown represents the rate of original
issue discount.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into 10/31/96 with a maturing value of
$750,115,208. Collateralized by $733,115,000 U.S. Treasury obligations, 0%
to 10.375% due 11/15/96 to 08/15/23.
(f) Joint repurchase agreement entered into 10/31/96 with a maturing value of
$200,030,778. Collateralized by $198,651,000 U.S. Treasury obligations,
4.75% to 9.25% due 11/30/97 to 06/30/99.
See Notes to Financial Statements.
13
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$213,861,105) $ 236,947,605
- ---------------------------------------------------------
Foreign currencies, at market value
(cost $4,942,871) 4,930,741
- ---------------------------------------------------------
Receivables for:
- ---------------------------------------------------------
Investments sold 1,868,600
- ---------------------------------------------------------
Capital stock sold 1,751,250
- ---------------------------------------------------------
Dividends and interest 313,510
- ---------------------------------------------------------
Investment for deferred compensation
plan 6,352
- ---------------------------------------------------------
Other assets 93,073
- ---------------------------------------------------------
Total assets 245,911,131
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 8,304,055
- ---------------------------------------------------------
Capital stock reacquired 286,359
- ---------------------------------------------------------
Deferred compensation 6,352
- ---------------------------------------------------------
Accrued advisory fees 166,733
- ---------------------------------------------------------
Accrued administrative services fees 6,070
- ---------------------------------------------------------
Accrued distribution fees 158,740
- ---------------------------------------------------------
Accrued transfer agent fees 61,830
- ---------------------------------------------------------
Accrued operating expenses 101,820
- ---------------------------------------------------------
Total liabilities 9,091,959
- ---------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $ 236,819,172
=========================================================
NET ASSETS:
Class A $ 114,971,030
=========================================================
Class B $ 121,848,142
=========================================================
CAPITAL STOCK, $.001 PAR VALUE PER
SHARE:
Class A:
Authorized 200,000,000
- ---------------------------------------------------------
Outstanding 8,098,028
=========================================================
Class B:
Authorized 200,000,000
- ---------------------------------------------------------
Outstanding 8,673,120
=========================================================
Class A:
Net asset value and redemption price
per share $ 14.20
=========================================================
Offering price per share:
(Net asset value divided by 95.25%) $ 14.91
=========================================================
Class B:
Net asset value and offering price per
share $ 14.05
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $205,662 foreign
withholding tax) $ 1,943,751
- --------------------------------------------------------
Interest 511,628
- --------------------------------------------------------
Total investment income 2,455,379
- --------------------------------------------------------
EXPENSES:
Advisory fees 1,163,814
- --------------------------------------------------------
Administrative services fees 78,151
- --------------------------------------------------------
Directors' fees 6,855
- --------------------------------------------------------
Distribution fees -- Class A 352,082
- --------------------------------------------------------
Distribution fees -- Class B 663,802
- --------------------------------------------------------
Custodian fees 229,188
- --------------------------------------------------------
Transfer agent fees -- Class A 178,789
- --------------------------------------------------------
Transfer agent fees -- Class B 217,959
- --------------------------------------------------------
Other 127,009
- --------------------------------------------------------
Total expenses 3,017,649
- --------------------------------------------------------
Less: Expenses assumed by advisor (11,719)
- --------------------------------------------------------
Expenses paid indirectly (2,151)
- --------------------------------------------------------
Net expenses 3,003,779
- --------------------------------------------------------
Net investment income (loss) (548,400)
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN
CURRENCIES AND FUTURES CONTRACTS:
Net realized gain (loss) on sales of:
Investment securities (348,630)
- --------------------------------------------------------
Foreign currencies 7,538
- --------------------------------------------------------
Futures contracts (262,996)
- --------------------------------------------------------
(604,088)
- --------------------------------------------------------
Net unrealized appreciation
(depreciation) of:
Investment securities 20,104,008
- --------------------------------------------------------
Foreign currencies (71,876)
- --------------------------------------------------------
20,032,132
- --------------------------------------------------------
Net gain on investment securities, foreign
currencies and futures contracts 19,428,044
- --------------------------------------------------------
Net increase in net assets resulting from
operations $18,879,644
========================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 1995 and 1996
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (548,400) $ (83,769)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities, foreign currencies and
futures contracts (604,088) 945,395
- -------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and foreign currencies 20,032,132 2,866,448
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 18,879,644 3,728,074
- -------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income -- Class A -- (2,116)
- -------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (516,173) --
- -------------------------------------------------------------------------------------------------------------------------
Class B (413,018) --
- -------------------------------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 81,693,730 18,511,217
- -------------------------------------------------------------------------------------------------------------------------
Class B 96,263,897 14,304,173
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 195,908,080 36,541,348
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 40,911,092 4,369,744
- -------------------------------------------------------------------------------------------------------------------------
End of period $236,819,172 $ 40,911,092
=========================================================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $214,452,461 $ 37,047,643
- -------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) 7,538 --
- -------------------------------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of investment securities, foreign
currencies and futures contracts (662,207) 874,201
- -------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and foreign currencies 23,021,380 2,989,248
- -------------------------------------------------------------------------------------------------------------------------
$236,819,172 $ 40,911,092
=========================================================================================================================
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
October 31, 1996
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Growth Fund (the "Fund") is an investment portfolio of AIM
International Funds, Inc. (the "Company"). The Company is a Maryland corporation
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company consisting of four separate
series portfolios: AIM Global Growth Fund, AIM Global Aggressive Growth Fund,
AIM Global Income Fund and AIM International Equity Fund. The Fund currently
offers two different classes of shares: Class A shares and Class B shares. Class
A shares are sold with a front-end sales charge. Class B shares are sold with a
contingent deferred sales charge. Matters affecting each portfolio or class are
voted on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is to provide long-term growth of capital. The
Fund seeks to achieve its objectives by investing in a portfolio of global
equity securities of selected companies which are considered by AIM to have
strong earnings momentum.
The following is a summary of 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 the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations--Except as provided in the next sentence, a security
listed or traded on an exchange is valued at the last sales price on the
exchange where the security is principally traded or, lacking any sales, at
the mean between the closing bid and asked prices on the day of valuation.
Exchange listed convertible bonds are valued at the mean between the closing
bid and asked prices obtained from a broker-dealer. If a mean is not
available, as is the case in some foreign markets, the closing bid will be
used absent a last sales price. Securities traded in the over-the-counter
market (but not including securities reported on the NASDAQ National Market
System) are
15
<PAGE> 18
valued at the mean between the closing bid and asked prices on valuation
date. Securities reported on the NASDAQ National Market System are valued at
the last sales price on the valuation date or absent a last sales price, at
the mean of the closing bid and asked prices. Securities for which market
quotations are either not readily available or are questionable are valued at
fair value as determined in good faith by or under the supervision of the
Company's officers in a manner specifically authorized by the Board of
Directors. Investments with maturities of 60 days or less are valued on the
basis of amortized cost which approximates market value. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the New York Stock Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the New York Stock Exchange.
Occasionally, events affecting the values of such securities and such
exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange which will not be reflected in the
computation of the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, then these securities will
be valued at their fair value as determined in good faith by or under the
supervision of the Board of Directors.
B. Foreign Currency Translations--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts--A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a forward currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
D. Securities Transactions, Investment Income and Distributions--Securities
transactions are accounted for on a trade date basis. Realized gains or
losses are computed on the basis of specific identification of the securities
sold. Interest income is recorded as earned from settlement date and is
recorded on an accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. On October 31, 1996,
undistributed net investment income was increased by $555,938, paid-in
capital reduced by $552,809 and undistributed net realized gains reduced by
$3,129 in order to comply with the requirements of the American Institute of
Certified Public Accountants Statement of Position 93-2. Net assets of the
Fund were unaffected by the reclassifications discussed above.
E. 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 of
$630,387 (which may be carried forward to offset future taxable capital
gains, if any) which expires, if not previously utilized, through the year
2004.
F. Stock Index Futures Contracts--The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the Fund's
basis in the contract. Risks include the possibility of an illiquid market
and that a change in the value of contracts may not correlate with changes in
the value of the securities being hedged.
G. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.85% of
the first $1 billion of the Fund's average daily net assets, plus 0.80% of the
Fund's average daily net assets in excess of $1 billion. During the year ended
October 31, 1996, AIM assumed expenses of the Fund in the amount of $11,719.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for administrative costs incurred in providing
accounting services to the Fund. During the year ended October 31, 1996, AIM was
reimbursed $78,151 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency
services to the Fund. During the year ended October 31, 1996, AFS was paid
$216,804 for such services.
The Fund received reductions in transfer agency fees of $1,895 from dividends
received on balances in cash management bank accounts. In addition, the Fund
incurred expenses of $256 for pricing services which are paid through directed
brokerage commissions. The effect of the above arrangements resulted in a
16
<PAGE> 19
reduction in the Fund's total expenses of $2,151 during the year ended October
31, 1996.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A shares and the Class B shares of the Fund. The Company has adopted
distribution Plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares (the "Class A Plan") and with respect to the Fund's Class
B shares (the "Class B Plan") (collectively the "Plans"). The Fund, pursuant to
the Class A Plan, pays AIM Distributors an annual rate of 0.50% of the average
daily net assets attributable to the Class A shares. The Class A Plan is
designed to compensate AIM Distributors for certain promotional and other sales
related costs. Of the total compensation payable, a service fee of 0.25% is paid
to selected dealers and financial institutions who furnish continuing personal
shareholder services to their customers who purchase and own Class A shares of
the Fund. The Fund, pursuant to the Class B Plan, pays AIM Distributors at an
annual rate of 1.00% of the average daily net assets attributable to the Class B
shares. Of this amount, the Fund pays a service fee of 0.25% of the average
daily net assets of the Class B shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own Class B shares of the Fund. Any amounts not paid
as a service fee under such Plans would constitute an asset-based sales charge.
The Plans also impose a cap on the total sales charges, including asset-based
sales charges, that may be paid by the respective classes. AIM Distributors may,
from time to time, assign, transfer or pledge to one or more designees, its
rights to all or a designated portion of (a) compensation received by AIM
Distributors from the Fund pursuant to the Class B Plan (but not AIM
Distributors' duties and obligations pursuant to the Class B Plan) and (b) any
contingent deferred sales charges received by AIM Distributors related to the
Class B shares. During the year ended October 31, 1996, the Class A shares and
the Class B shares paid AIM Distributors $352,082 and $663,802, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $388,799 from the sales of the Class
A shares of the Fund during the year ended October 31, 1996. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the year ended October 31,
1996, AIM Distributors received commissions of $14,106 in contingent deferred
sales charges imposed on redemptions of Fund shares. Certain officers and
directors of the Company are officers and directors of AIM, AFS and AIM
Distributors.
During the year ended October 31, 1996, the Fund incurred legal fees of $3,146
for services rendered by the law firm of Kramer, Levin, Naftalis & Frankel as
counsel to the Company's directors. A member of that firm is a director of the
Company.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $325,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 19, 1996, the Fund was
limited to borrowing $300,000. During the year ended October 31, 1996, the Fund
did not borrow under the line of credit agreement. The funds which are party to
the line of credit are charged a commitment fee of 0.08% on the unused balance
of the committed line. The commitment fee is allocated among the funds based on
their respective average net assets for the period.
NOTE 5-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 1996 was
$279,290,655 and $103,514,524, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of October 31, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $27,999,861
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (4,954,987)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $23,044,874
=========================================================
</TABLE>
Cost of investments for tax purposes is $213,902,731.
17
<PAGE> 20
NOTE 6-CAPITAL STOCK
Changes in the Fund's capital stock outstanding during the years ended October
31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 7,117,057 $ 94,636,553 1,836,306 $20,814,602
- ------------------------------------------------------------------ ---------- ------------ --------- -----------
Class B 7,683,810 101,786,913 1,403,515 15,741,389
- ------------------------------------------------------------------ ---------- ------------ --------- -----------
Issued as reinvestment of distributions:
Class A 36,930 453,130 171 1,642
- ------------------------------------------------------------------ ---------- ------------ --------- -----------
Class B 31,124 379,711 -- --
- ------------------------------------------------------------------ ---------- ------------ --------- -----------
Reacquired:
Class A (983,830) (13,395,953) (210,976) (2,305,027)
- ------------------------------------------------------------------ ---------- ------------ --------- -----------
Class B (441,521) (5,902,727) (128,718) (1,437,216)
- ------------------------------------------------------------------ ---------- ------------ --------- -----------
13,443,570 $177,957,627 2,900,298 $32,815,390
================================================================== ========== ============ ========= ===========
</TABLE>
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a Class A share and a Class B share
outstanding during each of the years in the two-year period ended October 31,
1996 and the period September 15, 1994 (date operations commenced) through
October 31, 1994.
<TABLE>
<CAPTION>
1996 1995 1994
--------- -------- --------
<S> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 12.32 $ 10.23 $ 10.00
- ----------------------------------------------------------------------------- --------- -------- --------
Income from investment operations:
Net investment income (loss) (0.01) (0.02) -
- ----------------------------------------------------------------------------- --------- -------- --------
Net gains on securities (both realized and unrealized) 2.11 2.11 0.23
- ----------------------------------------------------------------------------- --------- -------- --------
Total from investment operations 2.10 2.09 0.23
- ----------------------------------------------------------------------------- --------- -------- --------
Less distributions:
Dividends from net investment income - (0.004) -
- ----------------------------------------------------------------------------- --------- -------- --------
Distributions from net realized capital gains (0.22) - -
- ----------------------------------------------------------------------------- --------- -------- --------
Total distributions (0.22) (0.004) -
- ----------------------------------------------------------------------------- --------- -------- --------
Net asset value, end of period $ 14.20 $ 12.32 $ 10.23
============================================================================= ========= ======== ========
Total return(a) 17.26% 20.48% 2.30%
============================================================================= ========= ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 114,971 $ 23,754 $ 3,093
============================================================================= ========= ======== ========
Ratio of expenses to average net assets(b) 1.93%(c)(d) 2.12% 1.95%(e)
============================================================================= ========= ======== ========
Ratio of net investment income (loss) to average net assets(f) (0.13)%(c) (0.28)% 0.10%(e)
============================================================================= ========= ======== ========
Portfolio turnover rate 82% 79% 6%
============================================================================= ========= ======== ========
Average brokerage commission rate(g) $ 0.0234 N/A N/A
============================================================================= ========= ======== ========
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(b) After fee waivers and expense reimbursements. Ratios of expenses to average
net assets before fee waivers and expense reimbursements are 1.94%, 2.98%
and 5.67% (annualized), respectively for 1996, 1995 and 1994.
(c) Ratios are based on average net assets of $70,416,375.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) After fee waivers and expense reimbursements. Ratios of net investment
income (loss) to average net assets before fee waivers and expense
reimbursements are (0.14)%, (1.14)% and (3.63)% (annualized), respectively
for 1996, 1995 and 1994.
(g) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
18
<PAGE> 21
<TABLE>
<CAPTION>
1996 1995 1994
--------- -------- --------
<S> <C> <C> <C>
CLASS B:
Net asset value, beginning of period $ 12.26 $ 10.22 $ 10.00
- ----------------------------------------------------------------------------- --------- -------- --------
Income from investment operations:
Net investment income (loss) (0.05) (0.04) -
- ----------------------------------------------------------------------------- --------- -------- --------
Net gains on securities (both realized and unrealized) 2.06 2.08 0.22
- ----------------------------------------------------------------------------- --------- -------- --------
Total from investment operations 2.01 2.04 0.22
- ----------------------------------------------------------------------------- --------- -------- --------
Less distributions:
Distributions from net realized capital gains (0.22) - -
- ----------------------------------------------------------------------------- --------- -------- --------
Total distributions (0.22) - -
- ----------------------------------------------------------------------------- --------- -------- --------
Net asset value, end of period $ 14.05 $ 12.26 $ 10.22
============================================================================= ========= ======== ========
Total return(a) 16.60% 19.96% 2.20%
============================================================================= ========= ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 121,848 $ 17,157 $ 1,277
============================================================================= ========= ======== ========
Ratio of expenses to average net assets(b) 2.48%(c)(d) 2.64% 2.51%(e)
============================================================================= ========= ======== ========
Ratio of net investment income (loss) to average net assets(f) (0.69)%(c) (0.79)% (0.47)%(e)
============================================================================= ========= ======== ========
Portfolio turnover rate 82% 79% 6%
============================================================================= ========= ======== ========
Average brokerage commission rate(g) $ 0.0234 N/A N/A
============================================================================= ========= ======== ========
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(b) After fee waivers and expense reimbursements. Ratios of expenses to average
net assets before fee waivers and expense reimbursements are 2.49%, 3.38%
and 6.20% (annualized), respectively for 1996, 1995 and 1994.
(c) Ratios are based on average net assets of $66,380,227.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) After fee waivers and expense reimbursements. Ratios of net investment
income (loss) to average net assets before fee waivers and expense
reimbursements are (0.69)%, (1.54)% and (4.16)% (annualized), respectively
for 1996, 1995 and 1994.
(g) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
NOTE 8-SUBSEQUENT EVENT
On November 4, 1996, A I M Management Group Inc. ("AIM Management") and INVESCO
PLC announced the execution of an agreement and plan of merger pursuant to which
AIM Management will be merged with and into a direct wholly-owned subsidiary of
INVESCO PLC. AIM Management is the parent company of the Fund's advisor. The
merger is conditional on, among other things, approval by the shareholders of
INVESCO PLC and AIM Management and the shareholders of the AIM funds and the
mutual funds managed by INVESCO PLC, and is expected to take place during the
first quarter of 1997.
19
<PAGE> 22
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM International Funds, Inc.:
We have audited the accompanying statement of assets and
liabilities of AIM Global Growth Fund (a portfolio of AIM
International Funds, Inc.), including the schedule of
investments, as of October 31, 1996, and the related
statement of operations for the year then ended, the
statement of changes in net assets for the two-year period
then ended and financial highlights for the two-year
period then ended and the period September 15, 1994 (date
operations commenced) through October 31, 1994. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of October 31, 1996, by correspondence
with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Global
Growth Fund as of October 31, 1996, the results of its
operations for the year then ended, and changes in its net
assets for the two-year period then ended and the
financial highlights for the two-year period then ended
and the period September 15, 1994 (date operations
commenced) through October 31, 1994, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
December 6, 1996
20
<PAGE> 23
Directors & Officers
<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Formerly Director, President, and
Chief Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 1919
Owen Daly II Carol F. Relihan Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. and Secretary TRANSFER AGENT
Carl Frischling Gary T. Crum A I M Fund Services, Inc.
Partner Senior Vice President P.O. Box 4739
Kramer, Levin, Naftalis & Frankel Houston, TX 77210-4739
Scott G. Lucas
Robert H. Graham Senior Vice President CUSTODIAN
President and Chief Operating Officer
A I M Management Group Inc. Dana R. Sutton State Street Bank & Trust
Vice President and Assistant Treasurer 225 Franklin Street
John F. Kroeger Boston, MA 02110
Formerly Consultant Robert G. Alley
Wendell & Stockel Associates, Inc. Vice President COUNSEL TO THE FUND
Lewis F. Pennock Melville B. Cox Ballard Spahr
Attorney Vice President Andrews & Ingersoll
1735 Market Street
Ian W. Robinson Jonathan C. Schoolar Philadelphia, PA 19103
Consultant; Formerly Executive Vice President
Vice President and COUNSEL TO THE DIRECTORS
Chief Financial Officer P. Michelle Grace
Bell Atlantic Management Assistant Secretary Kramer, Levin, Naftalis & Frankel
Services, Inc. 919 Third Avenue
David L. Kite New York, NY 10022
Louis S. Sklar Assistant Secretary
Executive Vice President DISTRIBUTOR
Hines Interests Nancy L. Martin
Limited Partnership Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Ofelia M. Mayo Suite 1919
Assistant Secretary Houston, TX 77046
Kathleen J. Pflueger AUDITORS
Assistant Secretary
KPMG Peat Marwick LLP
Samuel D. Sirko 700 Louisiana
Assistant Secretary NationsBank Bldg.
Houston, TX 77002
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
REQUIRED INCOME TAX INFORMATION
AIM Global Aggressive Growth Fund distributed long-term capital gains of $0.213
per share for Class A and Class B shares during its tax year ended October 31,
1996.
<PAGE> 24
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--REGISTERED TRADEMARK--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
[PHOTO OF GROWTH
11 Greenway Plaza AIM Blue Chip Fund
APPEARS HERE] 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
A I M Management Group Inc. has provided leadership in STABILITY, LIQUIDITY, AND CURRENT TAX-FREE INCOME
the mutual fund industry since 1976 and currently AIM Tax-Exempt Cash Fund
manages approximately $60 billion in assets for more
than 3.5 million shareholders, including individual
investors, corporate clients, and financial *AIM Aggressive Growth Fund was closed to new investors
institutions. The AIM Family of Funds--Registered on July 18, 1995. For more complete information about
Trademark-- is distributed nationwide, and AIM today any AIM Fund(s), including sales charges and expenses,
ranks among the nation's top 15 mutual fund companies ask your financial consultant or securities dealer for
in assets under management, according to Lipper a free prospectus(es). Please read the prospectus(es)
Analytical Services, Inc. carefully before you invest or send money.
[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
---------------
</TABLE>
