<PAGE> 1
AIM INTERNATIONAL
EQUITY FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT APRIL 30, 1997
<PAGE> 2
-------------------------------------
AIM INTERNATIONAL EQUITY FUND
For shareholders who seek
long-term growth of capital.
The Fund invests in
a diversified portfolio
of international equity securities
of companies with strong
earnings momentum.
-------------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM International Equity 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 5.50% 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 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 International Fund Index represents an
average of the performance of the 30 largest international mutual funds.
o The Europe, Australia, and Far East Index (EAFE) is a group of unmanaged
foreign 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, ANNUITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE
FDIC OR ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK OR ANY AFFILIATE;
AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
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
Photo of Chairman
Dear Fellow Shareholder:
We have seen a great deal of change in the markets during
[PHOTO OF the past few months, change that has been unsettling even
Charles T. for experienced market watchers.
Bauer, In many instances the change has occurred suddenly as
Chairman of the markets have fluctuated widely during the past six
the Board of months. The popular Dow Jones Industrial Average of 30
THE FUND large companies ranged from just over 7000 to just below
APPEARS HERE] 6400 before strengthening once again and regaining its lost
ground. Both the Russell 2000 Index, judged to be the
benchmark for small-cap stocks, and the Dow recently have
set records.
The point we want to emphasize is that such volatility
seems to be the norm rather than the exception in the
current market. Although most attention has been on the
large stocks in the S&P 500 index, the broad-based index
generally considered "the market," small- and mid-cap companies have been even
more volatile. Indexes for smaller companies were down as much as 20% before
their recent rebound. Similarly, bonds fluctuated widely as concerns mounted
over the possibility of rising interest rates.
What does all of this mean? In past reports, we suggested that the 20%-30%
returns of 1995 and 1996 were unlikely to continue uninterrupted, and we have
seen that to be true so far in 1997. However, we are still experiencing the
longest bull market in history, now in its seventh year. For hundreds of
thousands of investors, this bull market is the only investment climate they
have ever known. If you have been invested in stocks only since 1990, your
experience has truly been extraordinary: the S&P 500 had an annual return of
30% in 1991, 38% in 1995, and 23% in 1996. And not one down year.
Of course, returns such as those we've enjoyed in this bull market are well
above the averages for stocks. That has led mutual fund managers, financial
consultants, and market experts to voice concern that some investors may not be
prepared for more modest returns that are in line with historical averages.
And, although we've seen nothing but advances in the S&P 500 since 1990, it is
important to remember that the market has averaged a down year one out of every
three years since 1928.
KEEP REALISTIC EXPECTATIONS
What many investors may not realize is that periodic declines are inevitable.
In every market, there is always some segment, and some investment strategies,
that occasionally fall out of favor. Declines similar to what we have seen in
the small-cap and mid-cap sectors during the past six months often are more
severe than warranted; that is, they take good stocks down with the bad. Of
course, that lets us pick stocks just as prices for many attractive companies
are near their lowest for the year.
Not that we expect severe declines ahead. But it is important to maintain
realistic expectations about investment performance. Indeed, indications are
that stock performance may be returning to historic norms closer to 10% return
per year than 20%.
It's also a good idea to reassess your financial goals periodically with
your financial consultant. Managing your investments in changing markets can be
challenging. But your financial consultant knows a few time-tested investment
strategies that can help. Diversification can help you cushion the effects of
volatility.
--------------------------------
In every market,
there is always some segment,
and some investment strategies,
that occasionally fall
out of favor.
--------------------------------
Continued on next page
<PAGE> 4
The Chairman's Letter
----------------------------------
It's also
a good idea
to reassess your financial goals
periodically with
your financial consultant.
----------------------------------
On the following pages, your Fund's portfolio management team offers a
complete discussion of recent market conditions and how the Fund was affected.
They also discuss the Fund's portfolio strategy: why they believe the portfolio
is well-positioned for growth, and why they are confident that the reasons for
investing in the Fund are as compelling as ever. These discussions will help
you better understand the relative performance of your Fund.
AIM/INVESCO MERGER FINALIZED
We are pleased to announce that the merger of A I M Management Group Inc. and
INVESCO plc was concluded on February 28, 1997. AIM is now part of one of the
world's largest independent investment management groups with approximately
$170 billion in assets under management. The combined company, AMVESCAP plc,
has the financial strength necessary to meet your needs in an increasingly
competitive financial services environment, both in the United States and
worldwide. And, we will not change the portfolio management, investment style,
or name of any of the AIM funds you own. We have begun a new and promising era
for AIM, one we believe will yield exciting opportunities.
We appreciate the trust you have placed in us and we look forward to our
continued close association. If you have any questions or comments about this
report, we invite you to call Client Services at 800-959-4246 during normal
business hours. For automated account information 24 hours a day, call the AIM
Investor Line at 800-246-5463. We also invite you to visit AIM's Internet Web
site at www.aimfunds.com.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
2
<PAGE> 5
RESTRUCTURING IN EUROPE DRIVES
POSITIVE RETURNS
A roundtable discussion with the Fund management team for AIM International
Equity Fund about the six-month reporting period ended April 30, 1997.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND DO DURING THE SIX-MONTH REPORTING PERIOD?
A. The Fund posted another period of solid performance. Total return was 6.01%
for Class A shares and 5.65% for Class B shares for the six months ended
April 30, 1997. Comparatively, the Morgan Stanley Capital International
(MSCI) Europe, Australia and Far East Index (EAFE) of foreign stocks gained
just 1.57% during the reporting period. The Fund's net assets grew $421
million to $1.90 billion at the end of the reporting period.
The Fund's performance has continued to strengthen since the reporting
period ended (4/30/97-6/2/97)--its Class A shares have gained 6.63% in
total return and its Class B shares have gained 6.50%.
================================================================================
FUND REPORTS STRONG PERIOD
- --------------------------------------------------------------------------------
10/31/96-4/30/97
AIM FUND CLASS A SHARES 6.01%
AIM FUND CLASS B SHARES 5.65%
MSCI EAFE INDEX 1.57%
================================================================================
Q. WHAT WERE SOME OF THE MAJOR INFLUENCES ON THE FUND'S PORTFOLIO OVER THE
PAST SIX MONTHS?
A. The ongoing economic restructuring in Europe continues to fuel healthy
business growth in that region, and the Fund has been in an excellent
position to take advantage of that growth.
The drive to comply with European Monetary Unit standards is gaining
momentum, and the European markets continue to surge with that momentum.
Just as in the United States, the environment of subdued inflation and low
interest rates has provided a very fertile soil for European companies, and
therefore European markets, to flourish.
More than 60% of the Fund's portfolio was invested in Europe with 17%
of the Fund in the United Kingdom. Among the Fund's largest holdings in the
U.K. were Guinness plc, British Petroleum Co. plc, and the Ladbroke Group
plc.
For the first time, European companies are focusing on shareholder
value; that is, generating positive returns for shareholders. That attitude
is reflected in the stronger earnings we have seen from many European
countries.
Q. WITH SO MUCH OF THE PORTFOLIO NOW IN EUROPE, HOW IS THE REST OF THE
PORTFOLIO DISTRIBUTED?
A. Hong Kong stocks once again represented several of the Fund's top 10 equity
holdings, including the portfolio's largest single holding, transportation
company Cosco Pacific Ltd. The Fund also maintained significant positions
in such major banks as HSBC Holdings plc and Hang Seng Bank Ltd. In all,
Hong Kong companies made up 8% of the portfolio, the fourth-largest country
weighting.
We lowered our weighting in Japan to 14%, the second-largest country
weighting represented in the Fund. The Japanese economy is showing some
improvement, but at a slower pace than we would like. The troubles in the
Japanese financial markets have been well documented, and we have adjusted
our weighting there accordingly. However, we select stocks based on
individual companies' earnings. There are some positive stories in Japan
with familiar names like Honda Motor Co. and Fuji Photo Film Co., both
among the portfolio's top 10 equity holdings, which benefited as the strong
U.S. dollar made Japanese exports more competitive.
Latin America has been an interesting story in the past six months,
with five of the 10 top-performing world markets in that region during the
reporting period. Brazil, where we have seen a dramatic economic
restructuring, led all markets in the six months ended April 30, 1997 with
a 38.45% return, followed closely by Colombia's 31.23% return.
We have become more positive on Latin America and have increased our
exposure there because many individual companies in that part of the world
are showing increased earnings. Closer to home, the market in Mexico was up
17.13% during the reporting period, ninth-best in the world.
Q. IN WHICH INDUSTRIES WAS THE FUND WEIGHTED?
A. The telecommunications sector continues to boom all over the globe, and
that industry is currently the Fund's largest sector at just over 11%.
There is such a
--------------------------------------
. . . the environment of subdued
inflation and low interest rates
has provided a very fertile soil for
European companies . . .
--------------------------------------
See important Fund & index disclosures
inside front cover.
3
<PAGE> 6
The Manager's Overview
PORTFOLIO COMPOSITION
As of 4/30/97, based on total net assets
<TABLE>
<CAPTION>
==================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 COUNTRIES
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Cosco Pacific Ltd. 1.10% 1. United Kingdom 16.95%
2. Telecomunicacoes Brasileiras S.A.-Telebras 1.07 2. Japan 14.67
3. Fuji Photo Film Co. 1.07 3. France 11.43
4. Honda Motor Co. Ltd. 1.00 4. Hong Kong 7.75
5. Canon, Inc. 1.00 5. Germany 5.16
6. Portugal Telecom 0.99 6. The Netherlands 5.01
7. Philips Electronics 0.98 7. Italy 3.68
8. Novartis AG 0.95 8. Australia 3.54
9. Alcatel Alsthom 0.94 9. Spain 3.15
10.Guinness plc 0.93 10.Switzerland 3.09
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.
==================================================================================================
</TABLE>
tremendous amount of change occurring in telecommunications right now because
of increasing technology: wireless communications, modems, the Internet, just
to name a few. There are new companies all over the world coming into the
marketplace and taking advantage of this exploding industry. Telebras, a
Brazilian company, and Nokia, a Finnish company, are two telecommunications
companies among the portfolio's holdings.
Banking is another solid component of the Fund. This economic period of solid
growth with low interest rates has been favorable to banks all over the world.
With 6% of the Fund in the banking industry, we have enjoyed their prosperity.
Q. THE U.S. DOLLAR HAS BEEN VERY STRONG AGAINST OTHER CURRENCIES DURING THE
PAST SIX MONTHS. HOW DOES THAT AFFECT THE PORTFOLIO?
A. The strength of the dollar presents an interesting scenario. It does hurt
foreign investments in the short term, because when foreign currency values
decline against the U.S. dollar, our non-dollar-denominated foreign assets
in the Fund are valued lower. The good news, though, is that over the long
term a strong dollar helps makes exporting countries more
competitive--their goods become less expensive than U.S. goods. That helps
generate higher profits, and higher stock prices for the Fund's foreign
investments.
In the end, we believe the currency exchange differentials have little
affect on the Fund's long-term performance.
Q. HAS THE STRONG U.S. DOLLAR AFFECTED THE FUND'S OVERALL RETURN?
A. The strength or weakness of the dollar always affects the portfolio's
return. As we mentioned, because the Fund's daily net asset value is
computed in U.S. dollars, the Fund's return was lower because many of the
foreign currencies were weaker. For instance, the German market is up 23%
this year, but up only 10% in U.S. dollars due to the strong dollar. The
same is true in France, where the market is up 14% this year, but up only
2% in U.S. dollars. So although the Fund has appreciated in its worth, some
of that appreciation is lost in the currency exchange.
Q. HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
A. The Fund held 202 stocks as of April 30, 1997, spread over 30 countries and
57 industries. The largest position weighting in the Fund was 1.10%. More
than 60% of the Fund's holdings were in Europe, followed by 14% in Japan,
8% in Hong Kong, and 3% in both Australia and Canada.
Q. WHAT IS YOUR SHORT-TERM OUTLOOK FOR THE FUND?
A. Conditions seem positive for foreign stocks in general, and particularly in
Europe. Investors have waited years for real economic change in Europe, and
are taking advantage of the continued economic restructuring there. The
most recent Morgan Stanley data indicates that European stocks are a great
value--two times book value for European indexes versus a little over three
times book value for the U.S. Outlooks in Asia and Latin America also are
promising, and Japan's economy has begun to show signs of recovery.
The world markets in many ways take their lead from the U.S. economy.
Therefore, it is good news for foreign markets that the U.S. economy
continues to demonstrate growth at a reasonable rate and without rising
inflation.
FUND CELEBRATES FIFTH ANNIVERSARY WITH ****
On April 7, 1997, AIM International Equity Fund celebrated its fifth
anniversary by receiving a four-star rating for its overall performance from
Morningstar*. The Fund also received four stars for its five-year performance,
four stars for its three-year performance, and three stars for its one-year
performance.
================================================================================
MORNINGSTAR RANKINGS
As of 4/30/97
- --------------------------------------------------------------------------------
OVERALL ****
5 YEARS ****
3 YEARS ****
1 YEAR ***
================================================================================
*Morningstar proprietary ratings reflect risk-adjusted performance through
April 30, 1997. The ratings are subject to change every month. Ratings are
calculated from the funds' three-, five-, and 10-year returns (with fee
adjustments) in excess of 90-day Treasury bill returns, and a risk factor that
reflects performance below 90-day T-bills. The one-year rating is calculated
using the same method-ology, but is not a component of the overall rating. Ten
percent of the funds in a particular category receive five stars, 22.5% receive
four stars, 35% receive three stars, 22.5% receive two stars, and 10% receive
one star.
===============================================================================
See important Fund & index disclosures inside front cover.
4
<PAGE> 7
Long-Term Performance
AIM International Equity Fund vs. Benchmark Indexes
The chart below compares your Fund to benchmark indexes. It is intended to give
you a general idea of how your Fund performed compared to the stock market over
the period 4/7/92 to 4/30/97. It is important to understand the difference
between your Fund and an index. Your Fund's total return includes sales
charges, expenses, and management fees. An index measures the performance of
hypothetical portfolios, in this case the Europe, Australia, and Far East Index
and the Lipper International Fund Index. Unlike your Fund, these indexes are
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.
GROWTH OF A $10,000 INVESTMENT
4/7/92-4/30/97
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AIM INTERNATIONAL LIPPER INTERNATIONAL EUROPE, AUSTRALIA, AND
EQUITY FUND - CLASS A FUND INDEX FAR EAST INDEX
- --------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
4/7/92 $ 9,454 $10,000 $10,000
4/92 9,715 10,263 10,047
4/93 11,044 11,158 12,219
4/94 13,993 13,809 14,252
4/95 14,146 13,647 15,048
4/96 17,484 16,011 16,764
4/97 18,916 17,498 16,615
================================================================================
</TABLE>
Past performance cannot guarantee comparable future results.
================================================================================
AVERAGE ANNUAL TOTAL RETURN
As of 3/31/97. Including sales charges.
CLASS A SHARES
Inception (4/7/92) 13.70%
3 Years 9.80
1 Year 5.80*
*11.96% excluding sales charge.
CLASS B SHARES
Inception (9/15/94) 9.06%
1 Year 6.06*
*11.06% excluding sales charge.
================================================================================
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.
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-94.81%
ARGENTINA-1.57%
Banco de Galicia y Buenos Aires
S.A. de C.V.-ADR
(Banking)(a) 354,880 $ 8,633,565
- ----------------------------------------------------------------
Perez Companc S.A.-Class B
(Oil & Gas-Services) 878,000 7,121,292
- ----------------------------------------------------------------
YPF Sociedad Anonima-ADR
(Oil & Gas-Services) 508,200 14,039,025
- ----------------------------------------------------------------
29,793,882
- ----------------------------------------------------------------
AUSTRALIA-3.54%
Boral Ltd.
(Building Materials)(a) 2,500,000 7,369,570
- ----------------------------------------------------------------
Coca-Cola Amatil Ltd.
(Beverages) 454,905 5,200,384
- ----------------------------------------------------------------
National Australia Bank Ltd.
(Banking)(a) 579,000 7,924,394
- ----------------------------------------------------------------
National Australia Bank Ltd.-Conv.
Preferred (Banking)(b) 240,000 6,360,000
- ----------------------------------------------------------------
National Mutual Holdings Ltd.
(Insurance-Multi-Line
Property)(a) 3,770,000 5,586,056
- ----------------------------------------------------------------
QBE Insurance Group Ltd.
(Insurance-Multi-Line Property) 1,870,277 10,691,048
- ----------------------------------------------------------------
QNI Ltd.
(Metals-Miscellaneous) 6,126,400 11,370,843
- ----------------------------------------------------------------
WMC Ltd.
(Metals-Miscellaneous) 2,125,000 12,594,557
- ----------------------------------------------------------------
67,096,852
- ----------------------------------------------------------------
AUSTRIA-0.76%
OMV A.G.
(Oil & Gas-Integrated) 66,000 7,205,417
- ----------------------------------------------------------------
VA Technologie A.G.
(Engineering & Construction) 45,700 7,101,553
- ----------------------------------------------------------------
14,306,970
- ----------------------------------------------------------------
BELGIUM-1.46%
Barco Industries
(Electronic
Components/Miscellaneous) 41,000 6,984,336
- ----------------------------------------------------------------
COLRUYT S.A.
(Retail-Food & Drug) 14,600 6,044,196
- ----------------------------------------------------------------
Delhaize-Le Lion, S.A.
(Retail-Food & Drug) 124,000 6,226,014
- ----------------------------------------------------------------
UCB S.A.
(Medical-Drugs) 3,100 8,506,573
- ----------------------------------------------------------------
27,761,119
- ----------------------------------------------------------------
BRAZIL-1.07%
Telecomunicacoes Brasileiras
S.A.-Telebras-ADR
(Telecommunications) 177,000 20,310,750
- ----------------------------------------------------------------
CANADA-2.64%
Bank of Montreal
(Banking-Money Center) 118,000 4,282,462
- ----------------------------------------------------------------
Canadian National Railway Co.
(Railroads) 170,000 6,545,000
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
CANADA-(CONTINUED)
Canadian Natural Resources Ltd.
(Oil & Gas-Exploration &
Production)(a) 335,000 $ 7,985,326
- ----------------------------------------------------------------
Canadian Pacific, Ltd.
(Transportation) 307,000 7,483,125
- ----------------------------------------------------------------
Newbridge Networks Corp.
(Computer Networking)(a) 188,000 5,969,000
- ----------------------------------------------------------------
Northern Telecom Ltd.
(Telecommunications) 124,700 9,056,338
- ----------------------------------------------------------------
Suncor, Inc.
(Oil & Gas-Exploration &
Production) 190,000 8,704,367
- ----------------------------------------------------------------
50,025,618
- ----------------------------------------------------------------
CHILE-0.45%
Cia. de Telecomunicaciones de Chile
S.A.-ADR
(Telephone) 263,925 8,544,572
- ----------------------------------------------------------------
DENMARK-0.92%
Novo Nordisk A/S-Class B
(Medical-Drugs) 176,600 17,470,557
- ----------------------------------------------------------------
FINLAND-0.23%
Nokia Oy A.B.-Class A
(Telecommunications) 70,000 4,327,552
- ----------------------------------------------------------------
FRANCE-11.01%
Alcatel Alsthom
(Telecommunications) 160,000 17,791,485
- ----------------------------------------------------------------
AXA S.A.
(Insurance-Life & Health) 132,000 8,121,511
- ----------------------------------------------------------------
Cap Gemini Sogeti S.A.
(Computer Software/Services)(a) 162,000 9,811,874
- ----------------------------------------------------------------
Carrefour S.A.
(Retail-Food & Drug) 7,500 4,682,601
- ----------------------------------------------------------------
Cetelem
(Finance-Consumer Credit) 44,800 5,219,567
- ----------------------------------------------------------------
Compagnie Francaise d'Etudes et de
Construction Technip
(Engineering & Construction) 86,000 9,091,408
- ----------------------------------------------------------------
Compagnie Generale des Eaux
(Water Supply) 126,000 17,551,272
- ----------------------------------------------------------------
Elf Aquitaine S.A.
(Oil & Gas-Services) 180,500 17,504,155
- ----------------------------------------------------------------
Essilor International
(Medical Instruments/Products) 24,940 6,871,159
- ----------------------------------------------------------------
Etablissements Economiques du
Casino Guichard-Perrachon
(Retail-Food & Drug) 195,000 9,080,956
- ----------------------------------------------------------------
Lafarge S.A.
(Building Materials)(a) 66,500 4,361,552
- ----------------------------------------------------------------
Michelin-Class B
(Automobile/Truck Parts & Tires) 134,000 7,486,919
- ----------------------------------------------------------------
Pinault-Printemps-Redoute S.A.
(Retail-Stores) 34,800 14,637,882
- ----------------------------------------------------------------
Promodes
(Retail-Stores)(a) 28,000 9,446,072
- ----------------------------------------------------------------
Rexel S.A.
(Electronic
Components/Miscellaneous) 23,200 6,181,102
- ----------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-(CONTINUED)
Rhone-Poulenc-Class A
(Chemicals) 270,000 $ 9,080,956
- ----------------------------------------------------------------
Schneider S.A.
(Electronic
Components/Miscellaneous) 160,000 9,019,104
- ----------------------------------------------------------------
Sidel, S.A.
(Machinery-Miscellaneous) 57,000 4,093,960
- ----------------------------------------------------------------
Societe BIC S.A.
(Office Products) 111,000 17,591,879
- ----------------------------------------------------------------
Sodexho S.A.
(Business Services) 9,200 4,224,450
- ----------------------------------------------------------------
Total S.A.-Class B
(Oil & Gas-Exploration &
Production) 111,000 9,204,832
- ----------------------------------------------------------------
Valeo S.A.
(Automobile/Truck Parts & Tires) 128,500 7,925,983
- ----------------------------------------------------------------
208,980,679
- ----------------------------------------------------------------
GERMANY-4.64%
Adidas A.G.
(Shoes & Related Apparel) 42,000 4,377,526
- ----------------------------------------------------------------
Adidas A.G.-ADR
(Shoes & Related Apparel)
(Acquired 04/11/97; cost
$8,533,263)(c) 81,000 8,442,372
- ----------------------------------------------------------------
Altana A.G.
(Chemicals) 13,350 10,329,715
- ----------------------------------------------------------------
Commerzbank A.G.
(Banking-Money Center) 295,000 7,912,432
- ----------------------------------------------------------------
Continental A.G.
(Automobile/Truck Parts & Tires) 285,000 6,270,066
- ----------------------------------------------------------------
Deutsche Bank A.G.
(Banking)(a) 170,500 8,998,556
- ----------------------------------------------------------------
Dresdner Bank A.G.
(Banking) 240,000 7,677,561
- ----------------------------------------------------------------
SAP A.G.
(Computer Software/Services)(a) 27,000 4,915,752
- ----------------------------------------------------------------
SAP A.G. -Preferred
(Computer Software/Services) 27,000 4,971,879
- ----------------------------------------------------------------
Schering A.G.
(Medical-Drugs) 94,000 9,010,278
- ----------------------------------------------------------------
SGL Carbon A.G.
(Metals-Miscellaneous) 50,500 7,042,239
- ----------------------------------------------------------------
VEBA A.G.
(Electric Power) 155,000 7,983,601
- ----------------------------------------------------------------
87,931,977
- ----------------------------------------------------------------
HONG KONG-7.63%
Asia Satellite Telecommunications
Holdings Ltd.
(Telecommunications) 1,000,000 2,536,629
- ----------------------------------------------------------------
Asia Satellite Telecommunications
Holdings Ltd.-ADR
(Telecommunications) 174,500 4,493,375
- ----------------------------------------------------------------
Cheung Kong (Holdings) Ltd.
(Real Estate) 1,795,000 15,756,793
- ----------------------------------------------------------------
Cosco Pacific Ltd.
(Transportation-Miscellaneous) 14,908,000 20,880,630
- ----------------------------------------------------------------
Dao Heng Bank Group Ltd.
(Banking) 2,564,700 12,183,691
- ----------------------------------------------------------------
First Pacific Company Ltd.
(Conglomerates) 11,493,908 13,724,734
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HONG KONG-(CONTINUED)
Hang Seng Bank Ltd.
(Banking) 834,100 $ 9,394,594
- ----------------------------------------------------------------
Hong Kong & China Gas Co. Ltd.
(Electric Power) 7,764,960 12,329,311
- ----------------------------------------------------------------
HSBC Holdings PLC
(Banking) 675,000 17,078,681
- ----------------------------------------------------------------
Hutchison Whampoa Ltd.
(Conglomerates)(a) 1,830,000 13,583,554
- ----------------------------------------------------------------
New World Infrastructure Ltd.
(Building Materials)(a) 3,321,400 9,389,874
- ----------------------------------------------------------------
Sun Hung Kai Properties Ltd.
(Real Estate) 1,240,100 13,447,157
- ----------------------------------------------------------------
144,799,023
- ----------------------------------------------------------------
INDONESIA-1.00%
PT Bank Dagang Nasional
(Banking) 602,500 601,260
- ----------------------------------------------------------------
PT Bank Internasional Indonesia
(Banking)(a) 19,635,906 14,141,085
- ----------------------------------------------------------------
PT Indosat
(Telecommunications) 933,000 2,572,469
- ----------------------------------------------------------------
PT Indosat-ADR
(Telecommunications) 63,500 1,746,250
- ----------------------------------------------------------------
19,061,064
- ----------------------------------------------------------------
IRELAND-0.28%
Elan Corp. PLC-ADR
(Medical-Drugs)(a) 158,800 5,399,200
- ----------------------------------------------------------------
ISRAEL-0.50%
Teva Pharmaceutical Industries
Ltd.-ADR
(Medical-Drugs) 186,800 9,480,100
- ----------------------------------------------------------------
ITALY-3.25%
Credito Italiano S.p.A.
(Banking)(a) 6,200,000 8,694,322
- ----------------------------------------------------------------
Edison S.p.A.
(Electric Power) 1,940,000 10,278,003
- ----------------------------------------------------------------
Ente Nazionale Idrocarburi S.p.A.
(Oil & Gas-Exploration &
Production) 2,050,000 10,435,732
- ----------------------------------------------------------------
Istituto Mobiliare Italiano S.p.A.
(Banking) 825,000 7,012,747
- ----------------------------------------------------------------
Telecom Italia Mobile S.p.A.
(Telecommunications) 3,800,000 11,920,394
- ----------------------------------------------------------------
Telecom Italia S.p.A.
(Telecommunications) 5,000,000 13,237,549
- ----------------------------------------------------------------
61,578,747
- ----------------------------------------------------------------
JAPAN-14.47%
Advantest Corp.
(Semiconductors) 249,700 13,868,397
- ----------------------------------------------------------------
Bridgestone Corp.
(Automobile/Truck Parts & Tires) 685,000 14,570,449
- ----------------------------------------------------------------
Canon, Inc.
(Office Automation) 797,000 18,899,200
- ----------------------------------------------------------------
DDI Corp.
(Telecommunications) 2,120 14,079,332
- ----------------------------------------------------------------
Fuji Photo Film Co.
(Electronic
Components/Miscellaneous) 530,000 20,250,522
- ----------------------------------------------------------------
Honda Motor Co., Ltd.
(Automobile-Manufacturers) 610,000 18,934,100
- ----------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
Ibiden Co., Ltd.
(Building Materials) 946,000 $ 12,445,898
- ----------------------------------------------------------------
Matsushita Electric Industrial Co.
Ltd.
(Electronic
Components/Miscellaneous) 569,000 9,099,697
- ----------------------------------------------------------------
Nippon Telegraph & Telephone Corp.
(Telecommunications) 2,320 16,357,978
- ----------------------------------------------------------------
Nippon Television Network
(Advertising/Broadcasting) 26,530 7,816,772
- ----------------------------------------------------------------
NSK Ltd.
(Metals) 1,750,000 10,560,523
- ----------------------------------------------------------------
NTT Data Communications Systems Co.
(Computer Software/Services) 4,500 13,152,401
- ----------------------------------------------------------------
Okuma Corp.
(Machine Tools) 871,000 6,861,780
- ----------------------------------------------------------------
Ricoh Corp. Ltd.
(Office Automation) 1,095,000 13,025,958
- ----------------------------------------------------------------
SMC
(Machinery-Miscellaneous) 100,000 7,326,584
- ----------------------------------------------------------------
Sony Corp.
(Electronic
Components/Miscellaneous) 234,000 17,033,600
- ----------------------------------------------------------------
TDK Corp.
(Electronic
Components/Miscellaneous) 244,000 17,588,530
- ----------------------------------------------------------------
Tokyo Electron Ltd.
(Electronic
Components/Miscellaneous)(a) 397,100 15,329,027
- ----------------------------------------------------------------
Toyota Motor Corp.
(Automobile-Manufacturers) 604,000 17,510,694
- ----------------------------------------------------------------
Yamatake-Honeywell
(Airlines) 665,000 9,901,524
- ----------------------------------------------------------------
274,612,966
- ----------------------------------------------------------------
MALAYSIA-1.55%
Commerce Asset Holdings Berhad
(Finance-Asset Management) 1,469,000 8,776,087
- ----------------------------------------------------------------
Edaran Otomobil Nasional Berhad
(Automobile-Manufacturers) 618,000 5,833,440
- ----------------------------------------------------------------
Malayan Banking Berhad
(Banking) 1,032,000 10,275,609
- ----------------------------------------------------------------
UMW Holdings Berhad
(Finance-Asset Management) 856,000 4,500,239
- ----------------------------------------------------------------
29,385,375
- ----------------------------------------------------------------
MEXICO-2.18%
Coca-Cola Femsa S.A.-ADR
(Beverages-Soft Drinks) 142,100 4,955,738
- ----------------------------------------------------------------
Fomento Economico Mexicano, S.A. de
C.V.-Class B
(Beverages-Alcoholic)(a) 1,900,050 8,918,626
- ----------------------------------------------------------------
Grupo Industrial Maseca S.A. de
C.V.-Class B
(Food/Processing) 6,469,600 6,334,045
- ----------------------------------------------------------------
Grupo Televisa S.A.-GDR
(Advertising/Broadcasting)(a) 270,800 6,262,250
- ----------------------------------------------------------------
Panamerican Beverages, Inc.-Class A
(Beverages-Soft Drinks) 514,000 14,906,000
- ----------------------------------------------------------------
41,376,659
- ----------------------------------------------------------------
NETHERLANDS-5.01%
DSM N.V.
(Chemicals-Specialty)(a) 80,750 8,040,600
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-(CONTINUED)
Elsevier N.V.
(Publishing) 383,000 $ 6,133,347
- ----------------------------------------------------------------
Getronics N.V.
(Computer Software/Services) 292,000 8,842,581
- ----------------------------------------------------------------
Gucci Group N.V.-New York
shares-ADR
(Textiles) 61,000 4,231,875
- ----------------------------------------------------------------
Koninklijke Ahold N.V.
(Retail-Food & Drug) 142,000 9,693,579
- ----------------------------------------------------------------
Nutricia Verenigde Bedrijven N.V.
(Food/Processing) 69,150 10,491,577
- ----------------------------------------------------------------
Oce-Van Der Grinten N.V.
(Office Automation) 60,000 7,258,636
- ----------------------------------------------------------------
Philips Electronics N.V.
(Electronic
Components/Miscellaneous)(a) 358,000 18,687,368
- ----------------------------------------------------------------
Royal Dutch Petroleum Co.
(Oil & Gas-Services) 44,500 7,953,036
- ----------------------------------------------------------------
VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd Bezit
(Publishing) 332,000 6,867,320
- ----------------------------------------------------------------
Wolters Kluwer N.V.
(Publishing) 58,000 6,873,787
- ----------------------------------------------------------------
95,073,706
- ----------------------------------------------------------------
NORWAY-0.42%
Storebrand A.S.A.
(Insurance-Multi-Line
Property)(a) 1,300,000 7,941,077
- ----------------------------------------------------------------
PHILIPPINES-1.99%
C & P Homes, Inc.
(Home Building) 19,200,000 7,281,001
- ----------------------------------------------------------------
Filinvest Land Inc.
(Real Estate)(a) 27,303,500 6,419,480
- ----------------------------------------------------------------
Metro Pacific Corp.
(Conglomerates) 33,845,000 7,829,143
- ----------------------------------------------------------------
Metropolitan Bank & Trust Co.
(Banking) 379,174 7,764,655
- ----------------------------------------------------------------
Philippine Long Distance Telephone
Co.
(Telecommunications) 84,480 4,821,479
- ----------------------------------------------------------------
Philippine Long Distance Telephone
Co.-ADR
(Telecommunications) 59,600 3,322,700
- ----------------------------------------------------------------
Southeast Asia Cement Holdings,
Inc.
(Building Materials)(a) 8,777,000 406,065
- ----------------------------------------------------------------
37,844,523
- ----------------------------------------------------------------
PORTUGAL-0.99%
Portugal Telecom S.A.
(Telecommunications)(a) 510,000 18,789,474
- ----------------------------------------------------------------
SINGAPORE-1.79%
City Developments Ltd.
(Real Estate) 1,600,000 12,932,642
- ----------------------------------------------------------------
DBS Land Ltd.
(Real Estate) 3,391,000 10,963,648
- ----------------------------------------------------------------
Overseas Union Bank Ltd.
(Banking) 1,539,000 10,100,518
- ----------------------------------------------------------------
33,996,808
- ----------------------------------------------------------------
SOUTH AFRICA-0.40%
Sasol Ltd.
(Oil & Gas-Exploration &
Production) 590,700 7,572,225
- ----------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SPAIN-3.15%
Banco Bilbao Vizcaya, S.A.
(Banking) 144,000 $ 9,691,597
- ----------------------------------------------------------------
Banco Popular Espanol S.A.
(Banking) 47,000 9,965,459
- ----------------------------------------------------------------
Empresa Nacional de Electricidad,
S.A.
(Electric Power) 125,250 8,755,207
- ----------------------------------------------------------------
Gas Natural SDG, S.A.-Class E
(Gas Distribution) 40,000 8,494,922
- ----------------------------------------------------------------
Iberdrola S.A.
(Electric Power) 745,000 8,407,715
- ----------------------------------------------------------------
Telefonica de Espana
(Telecommunications) 565,000 14,472,316
- ----------------------------------------------------------------
59,787,216
- ----------------------------------------------------------------
SWEDEN-1.64%
Hennes & Mauritz A.B.-B Shares
(Retail-Stores) 74,000 10,706,592
- ----------------------------------------------------------------
Securitas A.B.-Class B
(Security & Safety Services) 267,000 6,432,751
- ----------------------------------------------------------------
Sparbanken Sverige A.B.-Class A
(Banking) 530,000 9,458,615
- ----------------------------------------------------------------
Telefonaktiebolaget LM Ericsson-ADR
(Telecommunications) 133,480 4,488,265
- ----------------------------------------------------------------
31,086,223
- ----------------------------------------------------------------
SWITZERLAND-3.09%
ABB A.G.
(Engineering & Construction)(a) 7,500 9,081,813
- ----------------------------------------------------------------
Adecco S.A.
(Business Services) 30,000 10,012,889
- ----------------------------------------------------------------
Ciba Specialty Chemicals A.G.
(Chemicals-Specialty)(a) 11,046 951,660
- ----------------------------------------------------------------
Clariant A.G.
(Chemicals-Specialty) 19,200 10,993,013
- ----------------------------------------------------------------
Nestle S.A.
(Food/Processing)(a) 7,800 9,471,542
- ----------------------------------------------------------------
Novartis A.G.
(Medical-Drugs)(a) 13,696 18,043,302
- ----------------------------------------------------------------
58,554,219
- ----------------------------------------------------------------
THAILAND-0.23%
Bank of Ayudhya Public Co., Ltd.
(Banking) 120,150 308,165
- ----------------------------------------------------------------
Krung Thai Bank Public Co. Ltd.
(Banking) 1,502,920 1,884,224
- ----------------------------------------------------------------
Siam Commercial Bank Public Co.
Ltd.
(Banking) 375,500 2,199,311
- ----------------------------------------------------------------
4,391,700
- ----------------------------------------------------------------
UNITED KINGDOM-16.95%
Airtours PLC
(Leisure & Recreation) 466,450 6,932,490
- ----------------------------------------------------------------
B.A.T. Industries PLC
(Conglomerates) 1,285,000 10,850,648
- ----------------------------------------------------------------
Bass PLC
(Beverages-Alcoholic) 650,000 8,391,005
- ----------------------------------------------------------------
British Aerospace PLC
(Aerospace/Defense) 425,000 9,030,389
- ----------------------------------------------------------------
British Petroleum Co. PLC
(Oil & Gas-Services) 1,410,000 16,179,579
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
Burton Group PLC
(Retail-Stores) 3,140,000 $ 7,760,940
- ----------------------------------------------------------------
Caradon PLC
(Building Materials) 1,800,000 7,249,595
- ----------------------------------------------------------------
Compass Group PLC
(Restaurants) 970,000 10,646,261
- ----------------------------------------------------------------
Dixons Group PLC
(Retail-Stores) 1,370,000 11,235,332
- ----------------------------------------------------------------
EMAP PLC
(Publishing) 625,000 7,789,708
- ----------------------------------------------------------------
FKI PLC
(Conglomerates) 1,110,000 3,274,230
- ----------------------------------------------------------------
General Electric Co. PLC
(Electronic
Components/Miscellaneous) 1,140,000 6,780,875
- ----------------------------------------------------------------
GKN PLC
(Automobile/Truck Parts & Tires) 530,000 8,169,044
- ----------------------------------------------------------------
Granada Group PLC
(Leisure & Recreation) 785,000 11,323,339
- ----------------------------------------------------------------
Guinness PLC
(Beverages-Alcoholic) 2,130,000 17,606,159
- ----------------------------------------------------------------
Hays PLC
(Business Services) 1,050,050 9,300,686
- ----------------------------------------------------------------
Kingfisher PLC
(Retail-Stores) 825,000 8,931,929
- ----------------------------------------------------------------
Ladbroke Group PLC
(Hotels/Motels) 4,325,000 16,227,512
- ----------------------------------------------------------------
Lloyds TSB Group PLC
(Finance-Savings & Loans) 570,000 5,210,373
- ----------------------------------------------------------------
LucasVarity PLC
(Automobile/Truck Parts &
Tires)(a) 2,300,000 6,970,827
- ----------------------------------------------------------------
Marks & Spencer PLC
(Retail-Stores) 850,000 6,750,405
- ----------------------------------------------------------------
Medeva PLC
(Medical-Drugs) 1,490,000 7,244,733
- ----------------------------------------------------------------
Next PLC
(Retail-Stores) 1,010,000 10,664,749
- ----------------------------------------------------------------
Orange PLC
(Telecommunications)(a) 2,550,000 8,927,066
- ----------------------------------------------------------------
Peninsular & Oriental Steam
Navigation Co.
(The)
(Transportation-Miscellaneous) 85,100 828,242
- ----------------------------------------------------------------
Provident Financial PLC
(Finance-Consumer Credit) 942,400 8,721,400
- ----------------------------------------------------------------
Railtrack Group PLC
(Railroads) 1,450,000 10,939,627
- ----------------------------------------------------------------
Rentokil Initial PLC
(Business Services) 1,380,000 9,047,164
- ----------------------------------------------------------------
Scottish & Newcastle PLC
(Beverages-Alcoholic) 730,000 7,879,741
- ----------------------------------------------------------------
Siebe PLC
(Electronic
Components/Miscellaneous) 370,000 5,475,041
- ----------------------------------------------------------------
Smiths Industries PLC
(Electronics/Defense) 256,000 3,134,652
- ----------------------------------------------------------------
Standard Chartered PLC
(Finance-Asset Management) 645,000 9,758,630
- ----------------------------------------------------------------
Tarmac PLC
(Building Materials) 5,000,000 10,008,104
- ----------------------------------------------------------------
Unilever PLC
(Consumer Non-Durables) 516,000 13,569,044
- ----------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
Vodafone Group PLC
(Telecommunications) 1,865,000 $ 8,327,512
- ----------------------------------------------------------------
WPP Group PLC
(Advertising/Broadcasting) 2,575,000 10,537,884
- ----------------------------------------------------------------
321,674,915
- ----------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 1,798,955,748
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(d)
<S> <C> <C>
FOREIGN CONVERTIBLE BONDS-1.79%
FRANCE-0.42%
AXA-UAP
(Insurance-Life & Health),
Conv. Sr. Deb., 4.50%,
01/01/99 FRF 33,885,000 8,055,416
- ---------------------------------------------------------------
GERMANY-0.52%
Volkswagen International Finance
N.V.
(Automobile-Manufacturers),
Conv. Gtd. Notes, 3.00%,
01/24/02 DEM 7,880,000 9,790,900
- ---------------------------------------------------------------
HONG KONG-0.12%
New World Infrastructure Ltd.
(Banking), Conv. Bonds, 5.00%,
07/15/01 $ 250,000 284,375
- ---------------------------------------------------------------
New World Infrastructure Ltd.
(Banking), Conv. Bonds, 5.00%,
07/15/01
(Acquired 04/10/97 - 04/11/97;
cost $2,056,313)(c) $ 1,750,000 1,990,625
- ---------------------------------------------------------------
2,275,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
ITALY-0.43%
Pirelli S.p.A.
(Automobile/Truck Parts &
Tires), Conv. Bonds, 5.00%,
12/31/98 ITL 10,062,964,600 $ 8,140,059
- ---------------------------------------------------------------
JAPAN-0.20%
Ricoh Co., Ltd.
(Office Automation), Conv.
Bonds,
0.35%, 03/31/03 JPY 395,000,000 3,896,010
- ---------------------------------------------------------------
PHILIPPINES-0.10%
Metropolitan Bank & Trust
International Finance Ltd.
(Banking), Conv. Deb., 2.75%,
09/10/00 PHP 1,535,000 1,964,800
- ---------------------------------------------------------------
Total Foreign Convertible Bonds 34,122,185
- ---------------------------------------------------------------
REPURCHASE AGREEMENT-1.94%(e)
Greenwich Capital Markets, Inc.,
5.55%, 05/01/97(f) 36,790,376 36,790,376
- ---------------------------------------------------------------
TOTAL INVESTMENTS-98.54% 1,869,868,309
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.46% 27,639,417
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,897,507,726
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
Deb. - Debentures
DEM - German Deutschemark
FRF - French Franc
GDR - Global Depositary Receipt
Gtd. - Guaranteed
HKD - Hong Kong Dollar
ITL - Italian Lira
JPY - Japanese Yen
PHP - Philippine Peso
Sr. - Senior
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Issued as a unit. This unit also includes 240,000 warrants exchangeable into
one ordinary share per warrant.
(c) Restricted securities. May be resold to qualified institutional buyers in
accordance with provisions of Rule 144A under the Securities Act of 1933, as
amended. The valuation of these securities has been determined in accordance
with procedures established by the Board of Directors. The aggregate market
value of these securities at 04/30/97 was $10,432,997 which represented
0.55% of the Fund's net assets.
(d) Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(e) 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.
(f) Joint repurchase agreement entered into 04/30/97 with a maturing value of
$500,077,083. Collateralized by $1,057,237,408 U.S. Government obligations,
0% to 14.00% due 06/01/97 to 10/01/30 with an aggregate market value at
04/30/97 of $510,000,397.
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$1,584,256,086) $1,869,868,309
- ------------------------------------------------------------
Foreign currencies, at market value
(cost $21,256,687) 20,972,541
- ------------------------------------------------------------
Receivables for:
Investments sold 30,169,202
- ------------------------------------------------------------
Capital stock sold 9,467,901
- ------------------------------------------------------------
Dividends and interest 7,629,534
- ------------------------------------------------------------
Investment for deferred compensation plan 20,173
- ------------------------------------------------------------
Other assets 77,624
- ------------------------------------------------------------
Total assets 1,938,205,284
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 34,722,376
- ------------------------------------------------------------
Capital stock reacquired 2,511,451
- ------------------------------------------------------------
Deferred compensation 20,173
- ------------------------------------------------------------
Accrued advisory fees 1,345,407
- ------------------------------------------------------------
Accrued administrative services fees 8,587
- ------------------------------------------------------------
Accrued directors' fees 3,619
- ------------------------------------------------------------
Accrued distribution fees 996,324
- ------------------------------------------------------------
Accrued transfer agent fees 408,011
- ------------------------------------------------------------
Accrued operating expenses 681,610
- ------------------------------------------------------------
Total liabilities 40,697,558
- ------------------------------------------------------------
Net assets applicable to shares outstanding $1,897,507,726
============================================================
NET ASSETS:
Class A $1,368,063,068
============================================================
Class B $ 529,444,658
============================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Class A:
Authorized 200,000,000
- ------------------------------------------------------------
Outstanding 86,396,122
============================================================
Class B:
Authorized 200,000,000
- ------------------------------------------------------------
Outstanding 34,067,228
============================================================
Class A:
Net asset value and redemption price per
share $ 15.83
============================================================
Offering price per share:
(Net asset value of $15.83 divided
by 94.50%) $ 16.75
============================================================
Class B:
Net asset value and offering price per
share $ 15.54
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1997
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $1,743,173 foreign
withholding tax) $11,783,482
- -----------------------------------------------------------
Interest 1,993,445
- -----------------------------------------------------------
Total investment income 13,776,927
- -----------------------------------------------------------
EXPENSES:
Advisory fees 7,878,482
- -----------------------------------------------------------
Administrative services fees 52,210
- -----------------------------------------------------------
Directors' fees 6,892
- -----------------------------------------------------------
Distribution fees-Class A 1,863,767
- -----------------------------------------------------------
Distribution fees-Class B 2,265,816
- -----------------------------------------------------------
Custodian fees 687,636
- -----------------------------------------------------------
Transfer agent fees-Class A 1,051,021
- -----------------------------------------------------------
Transfer agent fees-Class B 570,724
- -----------------------------------------------------------
Other 365,738
- -----------------------------------------------------------
Total expenses 14,742,286
- -----------------------------------------------------------
Less: Advisory fees waived (299,946)
- -----------------------------------------------------------
Expenses paid indirectly (14,119)
- -----------------------------------------------------------
Net expenses 14,428,221
- -----------------------------------------------------------
Net investment income (loss) (651,294)
- -----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT
SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) on sales of:
Investment securities 1,824,102
- -----------------------------------------------------------
Foreign currencies (1,195,856)
- -----------------------------------------------------------
628,246
- -----------------------------------------------------------
Net unrealized appreciation of:
Investment securities 90,680,075
- -----------------------------------------------------------
Foreign currencies 92,762
- -----------------------------------------------------------
90,772,837
- -----------------------------------------------------------
Net gain on investment securities and
foreign currencies 91,401,083
- -----------------------------------------------------------
Net increase in net assets resulting from
operations $90,749,789
===========================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 1997 and the year ended October 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1997 1996
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (651,294) $ 1,130,094
- -----------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
foreign currencies 628,246 43,829,404
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 90,772,837 98,461,748
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 90,749,789 143,421,246
- -----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Class A (1,581,010) (295,965)
- -----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized capital gains:
Class A (31,480,110) (18,468,041)
- -----------------------------------------------------------------------------------------------
Class B (11,363,723) (1,875,276)
- -----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 223,501,986 350,398,961
- -----------------------------------------------------------------------------------------------
Class B 150,931,326 296,841,074
- -----------------------------------------------------------------------------------------------
Net increase in net assets 420,758,258 770,021,999
- -----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,476,749,468 706,727,469
- -----------------------------------------------------------------------------------------------
End of period $1,897,507,726 $1,476,749,468
- -----------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,612,559,633 $1,238,126,321
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (1,119,193) 1,113,111
- -----------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities
and foreign currencies 733,683 42,949,270
- -----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 285,333,603 194,560,766
- -----------------------------------------------------------------------------------------------
$1,897,507,726 $1,476,749,468
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
April 30, 1997
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM International Equity Fund (the "Fund") is a series 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 International Equity Fund, AIM Global Aggressive Growth
Fund, AIM Global Growth Fund and AIM Global Income 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 objective by investing in a diversified portfolio of
international equity securities, the issuers of 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-A security listed or traded on an exchange (except
convertible bonds) is valued at the last sales price on the exchange where
the security is principally traded or, lacking any sales on a particular day,
at the mean between the closing bid and asked prices on that day. If a mean
is not
12
<PAGE> 15
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 valued at the mean between the last bid and asked prices based
upon quotes furnished by market makers for such securities. 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. Debt obligations (including convertible bonds)
are valued on the basis of prices provided by an independent pricing service.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors, such as
yield, type of issue, coupon rate and maturity date. Securities for which
market 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 would not be reflected in the
computation of the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, then these securities will
be valued at their fair value as determined in good faith by or under the
supervision of the Board of Directors.
B. Foreign Currency Translations--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the 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.
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.
F. 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 0.95% of
the first $1 billion of the Fund's average daily net assets, plus 0.90% of the
Fund's average daily net assets in excess of $1 billion. AIM is currently
voluntarily waiving a portion of its advisory fees paid by the Fund to AIM to
the extent necessary to reduce the fees paid by the Fund at net asset levels
higher than those currently incorporated in the present advisory fee schedule.
Under the voluntary waiver, AIM will receive a fee calculated at the annual rate
of 0.95% of the first $500 million of the Fund's average daily net assets, plus
0.90% of the Fund's average daily net assets in excess of $500 million to and
including $1 billion, plus 0.85% of the Fund's average daily net assets in
excess of $1 billion. The waiver of fees is voluntary and the Board of Directors
of the Company would be advised of any decision by AIM to discontinue the
waiver. During the six months ended April 30, 1997, AIM waived fees of $299,946.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended April 30, 1997, AIM
was reimbursed $52,210 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency services to the Fund. During the six months ended April 30,
1997, the Fund paid AFS $833,648 for such services.
The Fund received reductions in transfer agency fees of $13,313 from dividends
received on balances in cash management bank accounts. In addition, the Fund
incurred expenses of $806 for pricing services which are paid through directed
brokerage commissions. The effect of the above arrangements resulted in a
reduction in the Fund's total expenses of $14,119 during the six months ended
April 30, 1997.
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
13
<PAGE> 16
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 at an annual rate of 0.30% 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, the Fund pays a service fee of 0.25% 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 an annual rate of
1.00% of the average daily net assets attributable to the Class B shares. Of
this amount, the Fund may pay 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 six months ended
April 30, 1997, the Class A shares and the Class B shares paid AIM Distributors
$1,863,767 and $2,265,816, respectively, as compensation under the Plans.
AIM Distributors received commissions of $632,873 from sales of the Class A
shares of the Fund during the six months ended April 30, 1997. 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 six months ended April 30,
1997, AIM Distributors received commissions of $45,741 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 six months ended April 30, 1997, the Fund incurred legal fees of
$4,669 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.
During the six months ended April 30, 1997, 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 six months ended April 30, 1997 was
$785,132,255 and $396,864,292, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of April 30, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $324,485,027
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (38,950,109)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $285,534,918
=========================================================
</TABLE>
Costs of investments for tax purposes is $1,584,333,391.
NOTE 6-CAPITAL STOCK
Changes in the Fund's capital stock outstanding during the six months ended
April 30, 1997 and the year ended October 31, 1996 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 1997 OCTOBER 31, 1996
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 42,678,604 673,877,033 41,055,911 $ 601,559,902
- --------------------- ----------- ------------- ----------- -------------
Class B 10,911,373 169,633,951 21,641,528 313,690,762
- --------------------- ----------- ------------- ----------- -------------
Issued as
reinvestment of
dividends:
Class A 2,035,615 31,230,705 1,305,811 17,576,215
- --------------------- ----------- ------------- ----------- -------------
Class B 707,989 10,690,410 130,593 1,741,975
- --------------------- ----------- ------------- ----------- -------------
Reacquired:
Class A (30,426,860) (481,605,752) (18,205,834) (268,737,156)
- --------------------- ----------- ------------- ----------- -------------
Class B (1,890,100) (29,393,035) (1,270,776) (18,591,663)
- --------------------- ----------- ------------- ----------- -------------
24,016,621 $ 374,433,312 44,657,233 $ 647,240,035
===================== =========== ============= =========== =============
</TABLE>
14
<PAGE> 17
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a Class A share outstanding during
the six months ended April 30, 1997, each of the years in the four-year period
ended October 31, 1996 and the period November 5, 1991 (date operations
commenced) through October 31, 1992 and for a Class B share outstanding during
the six months ended April 30, 1997, each of the years in the two-year period
ended October 31, 1996 and the period September 15, 1994 (date sales commenced)
through October 31, 1994.
<TABLE>
<CAPTION>
OCTOBER 31,
APRIL 30, -------------------------------------
1997 1996 1995 1994
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 15.37 $ 13.65 $ 13.50 $ 12.18
- -------------------------------------------------- ----------- ----------- --------- ---------
Income from investment operations:
Net investment income 0.01 0.04(b) 0.01 0.02
- -------------------------------------------------- ----------- ----------- --------- ---------
Net gains on securities (both realized and
unrealized) 0.90 2.07 0.62 1.31
- -------------------------------------------------- ----------- ----------- --------- ---------
Total from investment operations 0.91 2.11 0.63 1.33
- -------------------------------------------------- ----------- ----------- --------- ---------
Less distributions:
Dividends from net investment income (0.02) (0.01) (0.04) (0.01)
- -------------------------------------------------- ----------- ----------- --------- ---------
Distributions from capital gains (0.43) (0.38) (0.44) --
- -------------------------------------------------- ----------- ----------- --------- ---------
Total distributions (0.45) (0.39) (0.48) (0.01)
- -------------------------------------------------- ----------- ----------- --------- ---------
Net asset value, end of period $ 15.83 $ 15.37 $ 13.65 $ 13.50
================================================== =========== =========== ========= =========
Total return(c) 6.01% 15.79% 5.24% 10.94%
================================================== =========== =========== ========= =========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 1,368,063 $ 1,108,395 $ 654,764 $ 708,159
================================================== =========== =========== ========= =========
Ratio of expenses to average net assets(d) 1.50%(e)(f) 1.58% 1.67% 1.64%
================================================== =========== =========== ========= =========
Ratio of net investment income to average net
assets(h) 0.13%(e) 0.25% 0.10% 0.22%
================================================== =========== =========== ========= =========
Portfolio turnover rate 24% 66% 68% 67%
================================================== =========== =========== ========= =========
Average brokerage commission rate(i) $ 0.0196 $ 0.0192 N/A N/A
================================================== =========== =========== ========= =========
<CAPTION>
OCTOBER 31,
---------------------
1993 1992
--------- ---------
<S> <C> <C>
CLASS A:
Net asset value, beginning of period $ 8.88 $ 8.61(a)
- -------------------------------------------------- --------- ---------
Income from investment operations:
Net investment income 0.02 0.03
- -------------------------------------------------- --------- ---------
Net gains on securities (both realized and
unrealized) 3.29 0.26
- -------------------------------------------------- --------- ---------
Total from investment operations 3.31 0.29
- -------------------------------------------------- --------- ---------
Less distributions:
Dividends from net investment income (0.01) (0.02)
- -------------------------------------------------- --------- ---------
Distributions from capital gains -- --
- -------------------------------------------------- --------- ---------
Total distributions (0.01) (0.02)
- -------------------------------------------------- --------- ---------
Net asset value, end of period $ 12.18 $ 8.88
================================================== ========= =========
Total return(c) 37.36% 3.36%
================================================== ========= =========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 372,282 $ 122,663
================================================== ========= =========
Ratio of expenses to average net assets(d) 1.78% 1.80%(g)
================================================== ========= =========
Ratio of net investment income to average net
assets(h) 0.28% 0.30%(g)
================================================== ========= =========
Portfolio turnover rate 62% 41%
================================================== ========= =========
Average brokerage commission rate(i) N/A N/A
================================================== ========= =========
</TABLE>
(a) Net asset value at the beginning of the period has been restated to reflect
a 1.1619 for 1 stock split, effected in the form of a dividend, on May 21,
1992.
(b) Calculated using average shares outstanding.
(c) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(d) After fee waivers and expense reimbursements. Ratios of expenses to average
net assets before fee waivers and expense reimbursements are 1.53%
(annualized), 1.60%, 1.68% and 1.89% (annualized), respectively for 1997,
1996, 1995 and 1992.
(e) Ratios are annualized and based on average net assets of $1,252,808,764.
(f) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
1.49%.
(g) Annualized.
(h) After fee waivers and expense reimbursements. Ratios of net investment
income to average net assets before fee waivers and expense reimbursements
are 0.09% (annualized), 0.22%, 0.09% and 0.22% (annualized), respectively
for 1997, 1996, 1995 and 1992.
(i) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
<TABLE>
<CAPTION>
OCTOBER 31,
APRIL 30, --------------------------------------
1997 1996 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
CLASS B:
Net asset value, beginning of period $ 15.13 $ 13.54 $ 13.49 $ 13.42
- ------------------------------------------------------------ --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss) (0.05) (0.07)(a) (0.09) (0.01)
- ------------------------------------------------------------ --------- --------- --------- ---------
Net gains on securities (both realized and unrealized) 0.89 2.04 0.61 0.08
- ------------------------------------------------------------ --------- --------- --------- ---------
Total from investment operations 0.84 1.97 0.52 0.07
- ------------------------------------------------------------ --------- --------- --------- ---------
Less distributions:
Dividends from net investment income -- -- (0.03) --
- ------------------------------------------------------------ --------- --------- --------- ---------
Distributions from capital gains (0.43) (0.38) (0.44) --
- ------------------------------------------------------------ --------- --------- --------- ---------
Total distributions (0.43) (0.38) (0.47) --
- ------------------------------------------------------------ --------- --------- --------- ---------
Net asset value, end of period $ 15.54 $ 15.13 $ 13.54 $ 13.49
============================================================ ========= ========= ========= =========
Total return(b) 5.65% 14.88% 4.35% 0.52%
============================================================ ========= ========= ========= =========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 529,445 $ 368,355 $ 51,964 $ 4,833
============================================================ ========= ========= ========= =========
Ratio of expenses to average net assets(c) 2.27%(d)(e) 2.35% 2.55% 2.53%(f)
============================================================ ========= ========= ========= =========
Ratio of net investment income (loss) to average net
assets(g) (0.65)%(d) (0.53)% (0.78)% (0.67)%(f)
============================================================ ========= ========= ========= =========
Portfolio turnover rate 24% 66% 68% 67%
============================================================ ========= ========= ========= =========
Average brokerage commission rate(h) $ 0.0196 $ 0.0192 N/A N/A
============================================================ ========= ========= ========= =========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and for periods less than
one year, total returns are not annualized.
(c) After fee waivers and expense reimbursements. Ratios of expenses to average
net assets before fee waivers are 2.31% (annualized), 2.37% and 2.56%,
respectively for 1997, 1996 and 1995.
(d) Ratios are annualized and based on average net assets of $456,918,626.
(e) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(f) Annualized.
(g) After fee waivers and expense reimbursements. Ratios of net investment
income (loss) to average net assets before fee waivers are (0.69)%
(annualized), (0.55)% and (0.79)%, respectively for 1997, 1996 and 1995.
(h) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
15
<PAGE> 18
SUPPLEMENTAL PROXY INFORMATION -- SHAREHOLDER MEETING
- --------------------------------------------------------------------------------
The Annual Meeting of Shareholders of the Company was held on February 7, 1997.
The meeting was held for the following purposes:
(1) To elect directors as follows: Charles T. Bauer, Bruce L. Crockett, Owen
Daly II, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F.
Pennock, Ian W. Robinson, and Louis S. Sklar.
(2) To approve a new Investment Advisory Agreement between the Company and AIM.
(3) To approve the elimination of the fundamental investment policy prohibiting
or restricting investments in other investment companies and/or the
amendment of certain related fundamental investment policies.
(4) To approve the elimination of the fundamental investment policy prohibiting
investments in companies with less than three years of continuous operation.
(5) Ratification of KPMG Peat Marwick LLP as independent accountants for the
Company's fiscal year ending October 31, 1997.
The following votes were cast with respect to each item:
<TABLE>
<CAPTION>
Votes
Director/Matter Votes For Against Abstentions
--------------- --------- ------------- -----------
<S> <C> <C> <C> <C>
(1) Charles T. Bauer............................................ 130,433,380 0 3,798,959
Bruce L. Crockett........................................... 130,563,964 0 3,668,375
Owen Daly II................................................ 130,421,284 0 3,811,055
Carl Frischling............................................. 130,515,713 0 3,716,626
Robert H. Graham............................................ 130,587,498 0 3,644,841
John F. Kroeger............................................. 130,446,846 0 3,785,493
Lewis F. Pennock............................................ 130,506,142 0 3,726,197
Ian W. Robinson............................................. 130,446,093 0 3,786,246
Louis S. Sklar.............................................. 130,573,480 0 3,658,859
(2) Approval of new Investment Advisory Agreement............... 54,370,676 742,775 2,283,704
(3) Elimination of policy restricting investments in other
investment companies........................................ 39,608,624 1,920,390 2,447,220
(4) Elimination of policy prohibiting investments in companies
with less than three years of operations.................... 39,192,652 2,454,024 2,329,557
(5) KPMG Peat Marwick LLP....................................... 128,509,801 995,829 4,726,709
</TABLE>
16
<PAGE> 19
Directors & Officers
<TABLE>
<S> <C>
Board of Directors OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
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 100
Owen Daly II Carol F. Relihan Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. and Secretary TRANSFER AGENT
Jack Fields Gary T. Crum A I M Fund Services, Inc.
Formerly Member of the Senior Vice President P.O. Box 4739
U.S. House of Representatives Houston, TX 77210-4739
Scott G. Lucas
Carl Frischling Senior Vice President CUSTODIAN
Partner
Kramer, Levin, Naftalis & Frankel Dana R. Sutton State Street Bank & Trust
Vice President and Assistant Treasurer 225 Franklin Street
Robert H. Graham Boston, MA 02110
President and Chief Executive Officer Robert G. Alley
A I M Management Group Inc. Vice President COUNSEL TO THE FUND
John F. Kroeger Melville B. Cox Ballard Spahr
Formerly Consultant Vice President Andrews & Ingersoll
Wendell & Stockel Associates, Inc. 1735 Market Street
Jonathan C. Schoolar Philadelphia, PA 19103
Lewis F. Pennock Vice President
Attorney COUNSEL TO THE DIRECTORS
P. Michelle Grace
Ian W. Robinson Assistant Secretary Kramer, Levin, Naftalis & Frankel
Consultant; Formerly Executive 919 Third Avenue
Vice President and David L. Kite New York, NY 10022
Chief Financial Officer Assistant Secretary
Bell Atlantic Management DISTRIBUTOR
Services, Inc. Nancy L. Martin
Assistant Secretary A I M Distributors, Inc.
Louis S. Sklar 11 Greenway Plaza
Executive Vice President Ofelia M. Mayo Suite 100
Hines Interests Assistant Secretary Houston, TX 77046
Limited Partnership
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 20
<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
GROWTH
[PHOTO OF AIM Blue Chip Fund
11 GREENWAY PLAZA AIM Global Growth Fund
APPEARS HERE] AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH
AIM Global Utilities Fund
HIGH CURRENT INCOME
AIM High Yield Fund
CURRENT INCOME
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
HIGH DEGREE OF SAFETY AND CURRENT INCOME
AIM Limited Maturity Treasury Shares
STABILITY, LIQUIDITY, AND CURRENT INCOME
AIM Money Market Fund
STABILITY, LIQUIDITY, AND CURRENT TAX-FREE INCOME
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided leadership in the *AIM Aggressive Growth Fund was closed to new investors on
mutual fund industry since 1976 and managed approximately June 5, 1997. For more complete information about any AIM
$73 billion in assets for more than 3.5 million shareholders, Fund(s), including sales charges and expenses, ask your
including individual investors, corporate clients, and financial financial consultant or securities dealer for a free
institutions as of May 23, 1997. The AIM Family of prospectus(es). Please read the prospectus(es) carefully
Funds--Registered Trademark-- is distributed nationwide, and before you invest or send money.
AIM today ranks among the nation's top 15 mutual fund
companies in assets under management, according to Lipper
Analytical Services, Inc.
[AIM LOGO APPEARS HERE] -----------------
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 100 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
-----------------
</TABLE>
