<PAGE> 1
AIM GLOBAL
GROWTH FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT APRIL 30, 1997
<PAGE> 2
-----------------------------------
AIM GLOBAL GROWTH FUND
For shareholders who seek
long-term growth of capital.
The Fund invests in a portfolio
of global equity securities
of companies with
strong earnings momentum.
-----------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Growth Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed without a sales
charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The performance of the Fund's Class B shares will differ from that of
Class A shares due to differences in sales charge structure and Fund
expenses.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any particular security.
o Past performance cannot guarantee comparable future results.
o International investing presents certain risks not associated with
investing solely in the U.S. These include risks relating to fluctuations
in the value of the U.S. dollar relative to the value of other currencies,
the custody arrangements made for the Fund's foreign holdings, differences
in accounting, political risks, and the lesser degree of public information
required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor. The unmanaged Lipper Global Fund Index represents an average of
the performance of the 30 largest global mutual funds tracked by Lipper.
o The Morgan Stanley Capital International World Index is a group of
unmanaged global securities tracked by Morgan Stanley Capital
International.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
MUTUAL FUNDS, 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
Dear Fellow Shareholder:
We have seen a great deal of change in the markets during
the past few months, change that has been unsettling even
[PHOTO OF for experienced market watchers.
Charles T. In many instances the change has occurred suddenly as
Bauer the markets have fluctuated widely during the past six
Chairman of months. The popular Dow Jones Industrial Average of 30
the Board of large companies ranged from just over 7000 to just below
THE FUND, 6400 before strengthening once again and regaining its lost
APPEARS HERE] 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.
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
----------------------------------
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.
-----------------------------------
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
The Managers' Overview
AIM GLOBAL GROWTH FUND INVESTS IN TOP WORLD MARKETS
- -------------------------------------------------------------------------------
A roundtable discussion with the Fund management team for AIM Global Growth
Fund for the six-month period ended April 30, 1997.
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. Philips Electronics N.V 0.97% 1. United States 28.46%
2. Alcatel Alsthom 0.94 2. United Kingdom 11.90
3. Novartis AG 0.92 3. Japan 9.81
4. Novo Nordisk A/S - Class B 0.92 4. France 8.55
5. Societe BIC S.A 0.79 5. Hong Kong 5.01
6. Telefonica de Espana S.A. 0.73 6. Germany 4.17
7. Cheung Kong (Holdings) Ltd. 0.72 7. Netherlands 3.93
8. Fuji Photo Film Co. 0.72 8. Italy 3.06
9. Canon, Inc. 0.71 9. Australia 2.91
10. Honda Motor Co. 0.70 10. Spain 2.58
==========================================================================================
</TABLE>
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.
Q. U.S. MARKETS WERE PARTICULARLY VOLATILE DURING THE REPORTING PERIOD. HOW
DID THAT AFFECT THE PERFORMANCE OF AIM GLOBAL GROWTH FUND?
A. The Fund's broadly diversified portfolio effectively weathered the volatile
U.S. market and delivered a solid total return for the six-month period:
6.27% for Class A shares and 5.98% for Class B shares. The Fund's
performance was aided by its strategy of broad diversification, which
included many of the world's top-performing markets.
Altogether, about one-third of the portfolio's total net assets of
$324 million was invested in the U.S. and Canada, another third was
invested in Europe, with the remaining assets invested in Japan and the
Pacific Rim.
Q. WHAT FACTORS INFLUENCED THE PERFORMANCE OF U.S. STOCKS?
A. Domestic stocks have faced an unusual environment this year. Dramatic
market volatility, uneasiness about earnings trends, and concerns about the
pace of economic growth have driven investors to the relative safety and
liquidity of stocks in large, predictable companies, such as those in which
the Fund invests.
It's a phenomenon often termed a "flight to quality." Most important
to mutual fund investors, the preference for a comparatively small segment
of stocks has generated an unusually narrow market.
In a "narrow market," the performance of a market index is generated
by a comparatively few stocks. This unusual environment tends to put many
mutual funds at a disadvantage because most tend to diversify holdings into
a blend that may include large, medium, and small companies to manage risk
and optimize return.
While the Fund was broadly diversified into 326 holdings as of
4/30/97--including approximately 29% in the U.S.--its primary focus is in
large companies with dependable earnings. The greatest concentrations were
in stocks of technology and health-care companies. Among the U.S. holdings
were such well-known names as NationsBank Corp., Microsoft Corp., Compaq
Computer Corp., and Dell Computer Corp.
Q. HOW ABOUT THE ENVIRONMENT OUTSIDE THE U.S.?
A. Just as in the U.S., the environment of subdued inflation and low interest
rates has provided a very fertile soil for European companies, and
therefore European markets, to flourish. The primary factor appears to be
strong earnings growth from major export-oriented companies in the auto,
chemical, and machinery industries.
More than 35% of the Fund's portfolio is invested in Europe, with the
largest concentration in the United Kingdom at 12%.
Among the Fund's largest holdings in the U.K. were Guinness plc,
British Aerospace plc, and Rentokil Inital plc. Also featured were
drugmakers Novo-Nordisk A/S in Denmark and new addition Novartis AG from
Switzerland.
We reduced our weightings in selected French and German companies, as
market opportunities there stalled with inflation concerns and political
turmoil. However, recent economic indicators combined to buoy hopes that
the German economy will muster stronger growth without fueling inflation.
Q. HOW WAS THE FUND INVESTED OUTSIDE EUROPE AND THE U.S.?
A. With their continued potential for strong earnings growth, Hong Kong
companies represented 5% of the portfolio.
See important Fund & index disclosures inside front cover.
3
<PAGE> 6
The Managers' Overview
Among the larger positions in Hong Kong stocks were such long-time holdings
as transportation company Cosco Pacific Ltd. and Hang Seng Bank Ltd.
We have lowered our weighting in Japan to 10%, the third-largest
country weighting represented in the Fund. The concerns regarding Japan are
numerous and include: lower growth forecasts, an increase in the
consumption tax from 3% to 5%, and limited improvements in corporate profit
margins (other than the help provided by a weaker yen).
There are some positive stories in Japan with familiar names like
Canon, Inc., Honda Motor Co. Ltd. and Fuji Photo Film Co. Ltd., all among
the portfolio's top 10 equity holdings, which have benefited as the strong
U.S. dollar made Japanese exports more competitive.
Q. THE U.S. DOLLAR HAS BEEN VERY STRONG AGAINST OTHER CURRENCIES. HOW HAS THAT
AFFECTED THE PERFORMANCE OF 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 dollar-denominated foreign assets in
the Fund are valued lower. However, over the long term, a strong dollar
helps make exporting countries more competitive--their goods become
comparatively 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
effect on the Fund's long-term performance.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. Conditions are favorable for foreign markets in general, Europe in
particular. The most recent Morgan Stanley data indicate that the European
stock market is attractively priced--two times book value for European
indexes versus a little over three times book value on the U.S.
U.S. economy continues to grow at a healthy, but manageable pace.
Importantly, there is no evidence of rising inflation, and that reduces the
likelihood of higher interest rates which could erode corporate profits.
Nonetheless, it is important that investors maintain realistic
expectations about investment performance. We have enjoyed record-breaking
returns from stocks in recent years, but indications are that stock
performance may be returning to historic norms that bear closer to 10% per
year than 20%.
GROWTH OF A $10,000 INVESTMENT
The chart below compares your Fund to a benchmark index. It is intended to give
you a general idea of how your Fund performed compared to the stock market over
the period since inception, 9/15/94 to 4/30/97. It is important to understand
the difference between your Fund and an index. An index measures the
performance of hypothetical portfolios, in this case the Morgan Stanley Capital
International World Index. Unlike your Fund, an index is not managed; therefore
there are no sales charges, expenses, or fees. You cannot invest in an index.
But if you could buy all the securities that make up a particular index, you
would incur expenses that would affect the return on your investment.
- --------------------------------------------------------------------------------
AIM GLOBAL GROWTH AIM GLOBAL GROWTH MSCI WORLD
FUND, CLASS A FUND, CLASS B INDEX
- --------------------------------------------------------------------------------
9/15/94 $ 9,524 $ 10,000 $ 10,000
11/30/94 $ 9,333 $ 9,790 $ 9,585
2/28/95 $ 9,404 $ 9,850 $ 9,677
5/31/95 $ 10,366 $ 10,840 $ 10,593
8/31/95 $ 11,471 $ 11,990 $ 10,878
11/30/95 $ 11,967 $ 12,490 $ 11,407
2/28/96 $ 12,572 $ 13,105 $ 12,033
5/31/96 $ 13,493 $ 14,051 $ 12,538
8/31/96 $ 13,192 $ 13,715 $ 12,303
10/30/96 $ 14,462 $ 15,018 $ 13,602
2/28/97 $ 14,801 $ 15,343 $ 13,708
4/30/97 $ 14,627 $ 14,850 $ 13,881
Past performance cannot guarantee comparable future results.
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 3/31/97
(The most recent calendar quarter)
Including sales charges
CLASS A SHARES
Inception (9/15/94) 15.54%
1 Year 7.44*
*12.80% excluding sales charge.
CLASS B SHARES
Inception (9/15/94) 16.27%
1 Year 4.81*
*9.81% 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. Results for MSCI World Index are
for the period 8/30/94 to 4/30/97.
See important Fund & index disclosures inside front cover.
4
<PAGE> 7
For Consideration
WHY SMART MONEY
REMAINS FULLY INVESTED
Some investors like to wait for just the right moment to get into the stock
market and for just the right time to pull their investment out.
If that sounds like you, there's something you should know. During the
periods when you're content to sit on the sidelines, some of the market's best
single-day performances could slip right past you.
Are you so confident in your timing strategy that you're willing to forfeit
those gains? Missing even a handful of them could cost you dearly.
MISSING THE 20 BEST DAYS COULD CUT YOUR RETURN IN HALF
If you had invested a hypothetical $10,000 in the S&P 500 Index on December 31,
1991, by December 31, 1996 your $10,000 would have grown to $20,276, an average
annual total return of 15.18%.
But suppose during that five-year period there were times when you decided
to get out of the market, and as a result you ended up missing the market's 10
best single-day performances. In that case, your 15.18% return would have been
reduced to 11.03%. If you had missed the market's 20 best days, that 15.18%
return would have been sliced almost in half, down to 7.72%.
SMART INVESTORS DON'T PLAY THE TIMING GAME
The more you try to time the market, the greater your chances become of missing
the market's biggest single-day gains. That's why smart investors don't play
the timing game. They don't let the market's short-term gyrations sideline them
or dictate their investment objectives. They're patient investors-focused on
the long term and on their long-term goals.
Of course, past performance cannot guarantee comparable future results. But
one thing is clear. It's time, not timing, that counts when it comes to
potentially maximizing your investment return.
TALK TO YOUR FINANCIAL CONSULTANT
To find out more about the advantages of investing through the market ups and
downs, consult the combined expertise of your financial consultant and the
investment management of AIM. Regardless of the market, AIM's investment
strategy stays the same; we believe earnings drive stock prices and stock
prices drive portfolio performance.
AIM managed approximately $73 billion as of May 23, 1997, for financial
institutions, corporate clients and individual investors like you. Your
financial consultant can help you start investing with AIM today.
THE PENALTY FOR MISSING THE MARKET
Trying to time the market can be an inexact--and costly--exercise.
=====================================================
S&P 500 INDEX: DECEMBER 31, 1991-DECEMBER 31, 1996.
- -----------------------------------------------------
AVERAGE ANNUAL GROWTH
PERIOD OF INVESTMENT TOTAL RETURN $10,000
Fully Invested 15.18% $20,276
Miss the 10 Best Days 11.03 16,876
Miss the 20 Best Days 7.72 14,507
Miss the 40 Best Days 2.13 11,113
Miss the 60 Best Days -2.37 8,868
=====================================================
Source: Ibbotson Associates, Towers Data Systems HYPO--Registered Trademark--.
Past performance cannot guarantee comparable future results. The unmanaged
Standard & Poor's Composite Index of 500 Stocks is a group of unmanaged
securities widely regarded to be representative of the stock market in general;
results mentioned assume the reinvestment of dividends. An investment cannot be
made in an index.
----------------------------------
Instead of panicking
when the market moves,
try focusing on long-term goals.
Remember, it's time--
not timing--
that counts.
----------------------------------
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-28.46%
ADVERTISING/BROADCASTING-0.38%
Interpublic Group of Companies,
Inc. 22,000 $ 1,245,750
- ---------------------------------------------------------------
BANKING-0.37%
NationsBank Corp. 20,000 1,207,500
- ---------------------------------------------------------------
BEVERAGES (SOFT DRINKS)-0.07%
PepsiCo, Inc. 6,600 230,175
- ---------------------------------------------------------------
BIOTECHNOLOGY-0.42%
Amgen, Inc.(a) 7,000 412,125
- ---------------------------------------------------------------
Biogen, Inc.(a) 23,000 736,000
- ---------------------------------------------------------------
Guidant Corp. 3,200 218,400
- ---------------------------------------------------------------
1,366,525
- ---------------------------------------------------------------
BUSINESS SERVICES-0.65%
AccuStaff, Inc.(a) 25,000 456,250
- ---------------------------------------------------------------
Cognizant Corp. 25,900 844,988
- ---------------------------------------------------------------
Equifax, Inc. 28,000 805,000
- ---------------------------------------------------------------
2,106,238
- ---------------------------------------------------------------
CHEMICALS-0.23%
Monsanto Co. 17,100 731,025
- ---------------------------------------------------------------
COMPUTER MAINFRAMES-0.22%
International Business Machines
Corp. 4,500 723,375
- ---------------------------------------------------------------
COMPUTER MINI/PCS-1.55%
Compaq Computer Corp.(a) 14,000 1,195,250
- ---------------------------------------------------------------
Dell Computer Corp.(a) 15,800 1,322,263
- ---------------------------------------------------------------
Gateway 2000, Inc.(a) 15,000 823,125
- ---------------------------------------------------------------
Hewlett-Packard Co. 17,000 892,500
- ---------------------------------------------------------------
Sun Microsystems, Inc.(a) 27,400 789,463
- ---------------------------------------------------------------
5,022,601
- ---------------------------------------------------------------
COMPUTER NETWORKING-0.21%
Ascend Communications, Inc.(a) 15,000 686,250
- ---------------------------------------------------------------
COMPUTER PERIPHERALS-0.25%
EMC Corp.(a) 18,000 654,750
- ---------------------------------------------------------------
Storage Technology Corp.(a) 4,400 154,550
- ---------------------------------------------------------------
809,300
- ---------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-1.58%
BMC Software, Inc.(a) 13,400 579,550
- ---------------------------------------------------------------
Computer Associates
International, Inc. 1,700 88,400
- ---------------------------------------------------------------
Compuware Corp.(a) 31,800 1,200,450
- ---------------------------------------------------------------
Fiserv, Inc.(a) 17,100 645,525
- ---------------------------------------------------------------
Microsoft Corp.(a) 11,000 1,336,500
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES-(CONTINUED)
Parametric Technology Co.(a) 9,300 $ 420,825
- ---------------------------------------------------------------
Sterling Commerce, Inc.(a) 32,500 840,938
- ---------------------------------------------------------------
5,112,188
- ---------------------------------------------------------------
CONGLOMERATES-0.61%
Johnson Controls, Inc. 24,000 921,000
- ---------------------------------------------------------------
Tyco International Ltd. 10,000 610,000
- ---------------------------------------------------------------
U.S. Industries, Inc.(a) 12,700 458,788
- ---------------------------------------------------------------
1,989,788
- ---------------------------------------------------------------
COSMETICS & TOILETRIES-0.95%
Dial Corp. 62,000 961,000
- ---------------------------------------------------------------
McKesson Corp. 3,200 231,600
- ---------------------------------------------------------------
Procter & Gamble Co. (The) 10,000 1,257,500
- ---------------------------------------------------------------
Warner-Lambert Co. 6,500 637,000
- ---------------------------------------------------------------
3,087,100
- ---------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-0.72%
Symbol Technologies, Inc. 18,000 582,750
- ---------------------------------------------------------------
Teradyne, Inc.(a) 26,000 851,500
- ---------------------------------------------------------------
Waters Corp.(a) 30,000 888,750
- ---------------------------------------------------------------
2,323,000
- ---------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.49%
Franklin Resources, Inc. 7,500 443,437
- ---------------------------------------------------------------
T. Rowe Price Associates 24,500 1,133,125
- ---------------------------------------------------------------
1,576,562
- ---------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-1.47%
Federal Home Loan Mortgage Corp. 38,800 1,236,750
- ---------------------------------------------------------------
Finova Group, Inc. 5,400 370,575
- ---------------------------------------------------------------
Green Tree Financial Corp. 30,000 888,750
- ---------------------------------------------------------------
Money Store, Inc. (The) 31,000 670,375
- ---------------------------------------------------------------
Student Loan Marketing
Association 13,500 1,596,375
- ---------------------------------------------------------------
SunAmerica, Inc. 300 13,800
- ---------------------------------------------------------------
4,776,625
- ---------------------------------------------------------------
FINANCE (SAVINGS & LOAN)-0.88%
ContiFinancial Corp.(a) 14,100 405,375
- ---------------------------------------------------------------
Great Western Financial Corp. 31,000 1,302,000
- ---------------------------------------------------------------
H.F. Ahmanson & Co. 30,000 1,143,750
- ---------------------------------------------------------------
2,851,125
- ---------------------------------------------------------------
FOOD/PROCESSING-0.12%
ConAgra, Inc. 6,900 397,613
- ---------------------------------------------------------------
FUNERAL SERVICES-0.37%
Service Corp. International 35,000 1,198,750
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HOTELS/MOTELS-0.29%
HFS, Inc.(a) 16,000 $ 948,000
- ---------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.84%
Conseco Inc. 24,000 993,000
- ---------------------------------------------------------------
Equitable of Iowa Cos. 21,300 1,041,038
- ---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A(a) 26,400 699,600
- ---------------------------------------------------------------
2,733,638
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-0.77%
American International Group,
Inc. 3,900 501,150
- ---------------------------------------------------------------
ITT Hartford Group, Inc. 11,000 819,500
- ---------------------------------------------------------------
Travelers Group, Inc. 21,066 1,166,530
- ---------------------------------------------------------------
2,487,180
- ---------------------------------------------------------------
LEISURE & RECREATION-0.15%
Walt Disney Co. (The) 6,000 492,000
- ---------------------------------------------------------------
MACHINERY (HEAVY)-0.27%
Caterpillar Inc. 10,000 890,000
- ---------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.34%
Thermo Electron Corp.(a) 32,000 1,104,000
- ---------------------------------------------------------------
MEDICAL (DRUGS)-2.38%
Abbott Laboratories 8,000 488,000
- ---------------------------------------------------------------
American Home Products Corp. 18,000 1,192,500
- ---------------------------------------------------------------
AmeriSource Health Corp.-Class
A(a) 22,000 981,750
- ---------------------------------------------------------------
Cardinal Health, Inc. 12,650 673,612
- ---------------------------------------------------------------
Johnson & Johnson 14,100 863,625
- ---------------------------------------------------------------
Merck & Co., Inc. 8,000 724,000
- ---------------------------------------------------------------
Pfizer, Inc. 12,000 1,152,000
- ---------------------------------------------------------------
Rhone-Poulenc Rorer, Inc. 6,000 432,750
- ---------------------------------------------------------------
Schering-Plough Corp. 5,400 432,000
- ---------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 21,900 782,925
- ---------------------------------------------------------------
7,723,162
- ---------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-1.15%
Columbia/HCA Healthcare Corp. 15,000 525,000
- ---------------------------------------------------------------
HEALTHSOUTH Corp.(a) 50,000 987,500
- ---------------------------------------------------------------
Quorum Health Group, Inc.(a) 33,500 1,042,688
- ---------------------------------------------------------------
Tenet Healthcare Corp.(a) 16,900 439,400
- ---------------------------------------------------------------
United Healthcare Corp. 15,500 753,688
- ---------------------------------------------------------------
3,748,276
- ---------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-1.41%
Baxter International Inc. 25,000 1,196,875
- ---------------------------------------------------------------
Becton, Dickinson & Co. 22,000 1,012,000
- ---------------------------------------------------------------
Boston Scientific Corp.(a) 7,500 361,875
- ---------------------------------------------------------------
DePuy, Inc.(a) 8,700 182,700
- ---------------------------------------------------------------
Stryker Corp. 22,000 723,250
- ---------------------------------------------------------------
Sybron International Corp.(a) 12,700 422,275
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEDICAL INSTRUMENTS/PRODUCTS-(CONTINUED)
US Surgical Corp. 20,000 $ 685,000
- ---------------------------------------------------------------
4,583,975
- ---------------------------------------------------------------
OFFICE AUTOMATION-0.30%
Xerox Corp. 16,000 984,000
- ---------------------------------------------------------------
OIL & GAS (DRILLING)-0.12%
Reading & Bates Corp.(a) 17,000 380,375
- ---------------------------------------------------------------
OIL & GAS (SERVICES)-0.94%
Exxon Corp. 22,000 1,245,750
- ---------------------------------------------------------------
Halliburton Co. 14,000 988,750
- ---------------------------------------------------------------
Louisiana Land & Exploration Co. 12,200 610,000
- ---------------------------------------------------------------
Unocal Corp. 5,200 198,250
- ---------------------------------------------------------------
3,042,750
- ---------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-0.98%
Baker Hughes, Inc. 19,000 655,500
- ---------------------------------------------------------------
Coastal Corp. 16,500 783,750
- ---------------------------------------------------------------
Rowan Companies, Inc.(a) 25,000 450,000
- ---------------------------------------------------------------
Schlumberger Ltd. 4,300 476,225
- ---------------------------------------------------------------
Tidewater, Inc. 20,000 802,500
- ---------------------------------------------------------------
3,167,975
- ---------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.10%
Kimberly-Clark Corp. 6,200 317,750
- ---------------------------------------------------------------
POLLUTION CONTROL-0.23%
USA Waste Services, Inc.(a) 23,000 753,250
- ---------------------------------------------------------------
RETAIL (FOOD & DRUG)-0.84%
American Stores Co. 13,000 591,500
- ---------------------------------------------------------------
Kroger Co.(a) 23,600 649,000
- ---------------------------------------------------------------
Rite Aid Corp. 19,000 874,000
- ---------------------------------------------------------------
Safeway, Inc.(a) 13,500 602,438
- ---------------------------------------------------------------
2,716,938
- ---------------------------------------------------------------
RETAIL (STORES)-1.88%
Bed Bath & Beyond, Inc.(a) 30,000 821,250
- ---------------------------------------------------------------
Blyth Industries, Inc.(a) 30,000 1,185,000
- ---------------------------------------------------------------
CVS Corp. 25,000 1,240,625
- ---------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 22,500 734,063
- ---------------------------------------------------------------
TJX Companies, Inc. 21,500 1,015,875
- ---------------------------------------------------------------
Toys "R" Us, Inc.(a) 12,000 342,000
- ---------------------------------------------------------------
U.S. Office Products Co.(a) 30,000 765,000
- ---------------------------------------------------------------
6,103,813
- ---------------------------------------------------------------
SEMICONDUCTORS-1.85%
Advanced Micro Devices, Inc.(a) 21,800 926,500
- ---------------------------------------------------------------
Applied Materials, Inc.(a) 19,000 1,042,625
- ---------------------------------------------------------------
Intel Corp. 4,500 689,063
- ---------------------------------------------------------------
KLA Instruments Corp.(a) 26,000 1,157,000
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SEMICONDUCTORS-(CONTINUED)
Micron Technology, Inc. 25,000 $ 881,250
- ---------------------------------------------------------------
Texas Instruments, Inc. 14,500 1,294,125
- ---------------------------------------------------------------
5,990,563
- ---------------------------------------------------------------
TELECOMMUNICATIONS-1.23%
ADC Telecommunications, Inc.(a) 15,200 397,100
- ---------------------------------------------------------------
Andrew Corp.(a) 9,750 241,313
- ---------------------------------------------------------------
Lucent Technologies, Inc. 18,500 1,093,813
- ---------------------------------------------------------------
PairGain Technologies, Inc.(a) 25,000 650,000
- ---------------------------------------------------------------
Tellabs, Inc.(a) 16,000 638,000
- ---------------------------------------------------------------
WorldCom, Inc.(a) 40,730 977,520
- ---------------------------------------------------------------
3,997,746
- ---------------------------------------------------------------
TEXTILES-0.04%
Fruit of The Loom, Inc.-Class A(a) 4,000 144,000
- ---------------------------------------------------------------
TOBACCO-0.81%
Philip Morris Companies, Inc. 21,000 826,875
- ---------------------------------------------------------------
RJR Nabisco Holdings Corp. 30,000 892,500
- ---------------------------------------------------------------
Universal Corp. 32,000 896,000
- ---------------------------------------------------------------
2,615,375
- ---------------------------------------------------------------
Total Domestic Common Stocks 92,366,256
- ---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-67.77%
ARGENTINA-1.13%
Banco de Galicia y Buenos Aires S.A.
de C.V.-ADR (Banking) 45,609 1,109,581
- ---------------------------------------------------------------
Perez Companc S.A.-Class B
(Oil & Gas-Services) 93,000 754,305
- ---------------------------------------------------------------
YPF Sociedad Anonima-ADR
(Oil & Gas-Services) 65,600 1,812,200
- ---------------------------------------------------------------
3,676,086
- ---------------------------------------------------------------
AUSTRALIA-2.91%
Boral Ltd.
(Building Materials) 323,000 952,148
- ---------------------------------------------------------------
Coca-Cola Amatil Ltd.
(Consumer Non-Durables) 77,727 888,560
- ---------------------------------------------------------------
National Australia Bank Ltd.,
$1.97 Conv. Pfd., (Banking)(b) 42,500 1,126,250
- ---------------------------------------------------------------
National Australia Bank Ltd.
(Banking) 61,000 834,867
- ---------------------------------------------------------------
National Mutual Holdings Ltd.(a)
(Insurance-Multi-Line Property) 600,000 889,028
- ---------------------------------------------------------------
QBE Insurance Group Ltd.
(Insurance-Multi-Line Property) 181,125 1,035,363
- ---------------------------------------------------------------
QNI Ltd.
(Metals-Miscellaneous) 882,700 1,638,326
- ---------------------------------------------------------------
WMC Ltd.
(Metals-Miscellaneous) 350,000 2,074,398
- ---------------------------------------------------------------
9,438,940
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
AUSTRIA-0.67%
OMV A.G.
(Oil & Gas-Integrated) 9,400 $ 1,026,226
- ---------------------------------------------------------------
VA Technologie A.G.
(Engineering & Construction) 7,400 1,149,923
- ---------------------------------------------------------------
2,176,149
- ---------------------------------------------------------------
BELGIUM-1.17%
Barco Industries(a)
(Electronic
Components/Miscellaneous) 5,700 970,993
- ---------------------------------------------------------------
COLRUYT S.A.
(Retail-Food & Drug) 1,100 455,385
- ---------------------------------------------------------------
Delhaize-Le Lion, S.A.
(Retail-Food & Drug) 18,500 928,881
- ---------------------------------------------------------------
UCB S.A.
(Medical-Drugs) 520 1,426,909
- ---------------------------------------------------------------
3,782,168
- ---------------------------------------------------------------
CANADA-2.20%
Bank of Montreal
(Banking-Money Center) 20,500 743,987
- ---------------------------------------------------------------
Canadian National Railway Co.
(Railroads) 28,000 1,078,000
- ---------------------------------------------------------------
Canadian Natural Resources
Ltd.(a)
(Oil & Gas-Exploration &
Production) 48,000 1,144,166
- ---------------------------------------------------------------
Canadian Pacific, Ltd.
(Transportation) 20,000 487,500
- ---------------------------------------------------------------
Newbridge Networks Corp.(a)
(Computer Networking) 26,000 825,500
- ---------------------------------------------------------------
Northern Telecom Ltd.
(Telecommunications) 7,500 544,687
- ---------------------------------------------------------------
Philip Environmental, Inc.(a)
(Pollution Control) 65,000 1,023,750
- ---------------------------------------------------------------
Suncor, Inc.
(Oil & Gas-Exploration &
Production) 28,000 1,282,749
- ---------------------------------------------------------------
7,130,339
- ---------------------------------------------------------------
CHILE-0.31%
Cia. de Telecomunicaciones de
Chile S.A.-ADR
(Telephone) 30,600 990,675
- ---------------------------------------------------------------
DENMARK-0.91%
Novo Nordisk A/S-Class B
(Medical-Drugs) 30,000 2,967,818
- ---------------------------------------------------------------
FINLAND-0.26%
Nokia Oy A.B.-Class A
(Telecommunications) 13,800 853,146
- ---------------------------------------------------------------
FRANCE-8.35%
Alcatel Alsthom
(Telecommunications) 27,400 3,046,792
- ---------------------------------------------------------------
AXA S.A.
(Insurance-Life & Health) 11,250 692,174
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-(CONTINUED)
Cap Gemini Sogeti S.A.
(Computer Software/Services) 27,000 $ 1,635,312
- ---------------------------------------------------------------
Carrefour Supermarche S.A.
(Retail-Food & Drug) 1,250 780,433
- ---------------------------------------------------------------
Cetelem
(Finance-Consumer Credit) 4,200 489,334
- ---------------------------------------------------------------
Compagnie Francaise d'Etudes et
de Construction Technip
(Engineering & Construction) 13,000 1,374,283
- ---------------------------------------------------------------
Compagnie Generale des Eaux
(Water Supply) 15,100 2,103,367
- ---------------------------------------------------------------
Elf Aquitaine S.A.
(Oil & Gas-Services) 13,500 1,309,175
- ---------------------------------------------------------------
Essilor International
(Medical Instruments/Products) 2,200 606,117
- ---------------------------------------------------------------
Etablissements Economiques du
Casino Guichard-Perrachon
(Retail-Food & Drug) 33,000 1,536,777
- ---------------------------------------------------------------
Lafarge S.A.
(Building Materials) 11,500 754,253
- ---------------------------------------------------------------
Michelin-Class B
(Automobile/Truck Parts &
Tires) 23,500 1,313,004
- ---------------------------------------------------------------
Pinault-Printemps-Redoute S.A.
(Retail-Stores) 2,900 1,219,824
- ---------------------------------------------------------------
Promodes
(Retail-Stores) 4,800 1,619,327
- ---------------------------------------------------------------
Rexel S.A.
(Electronic
Components/Miscellaneous) 2,600 692,710
- ---------------------------------------------------------------
Rhone-Poulenc-Class A
(Chemicals) 46,500 1,563,942
- ---------------------------------------------------------------
Schneider S.A.
(Electronic
Components/Miscellaneous) 5,500 310,032
- ---------------------------------------------------------------
Sidel, S.A.
(Machinery-Miscellaneous) 9,800 703,874
- ---------------------------------------------------------------
Societe BIC S.A.
(Office Products) 16,100 2,551,615
- ---------------------------------------------------------------
Sodexho S.A.
(Business Services) 1,100 505,097
- ---------------------------------------------------------------
Total S.A.-Class B
(Oil & Gas-Exploration &
Production) 13,100 1,086,336
- ---------------------------------------------------------------
Valeo S.A.
(Automobile/Truck Parts &
Tires) 19,400 1,196,608
- ---------------------------------------------------------------
27,090,386
- ---------------------------------------------------------------
GERMANY-3.66%
Adidas A.G.
(Shoes & Related Apparel) 16,350 1,704,108
- ---------------------------------------------------------------
Altana A.G.
(Chemicals) 1,850 1,431,459
- ---------------------------------------------------------------
Commerzbank A.G.
(Banking-Money Center) 44,000 1,180,159
- ---------------------------------------------------------------
Continental A.G.
(Automobile/Truck Parts &
Tires) 29,600 651,207
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
GERMANY-(CONTINUED)
Deutsche Bank A.G.
(Banking) 29,000 $ 1,530,546
- ---------------------------------------------------------------
Dresdner Bank A.G.
(Banking) 36,000 1,151,634
- ---------------------------------------------------------------
SAP A.G.-Pfd.
(Computer Software/Services) 4,600 847,061
- ---------------------------------------------------------------
SAP A.G.
(Computer Software/Services) 4,600 837,499
- ---------------------------------------------------------------
Schering A.G.
(Medical-Drugs) 8,000 766,832
- ---------------------------------------------------------------
SGL Carbon A.G.
(Metals-Miscellaneous) 6,000 836,702
- ---------------------------------------------------------------
VEBA A.G.
(Electric Power) 18,000 927,128
- ---------------------------------------------------------------
11,864,335
- ---------------------------------------------------------------
HONG KONG-4.94%
Asia Satellite Telecommunications
Holdings Ltd.-ADR(a)
(Telecommunications) 24,500 630,875
- ---------------------------------------------------------------
Asia Satellite Telecommunications
Holdings Ltd.
(Telecommunications) 232,000 588,498
- ---------------------------------------------------------------
Cheung Kong (Holdings) Ltd.
(Real Estate) 267,000 2,343,768
- ---------------------------------------------------------------
Cosco Pacific Ltd.
(Transportation-Miscellaneous) 1,560,000 2,184,987
- ---------------------------------------------------------------
Dao Heng Bank Group Ltd.
(Banking) 266,000 1,263,642
- ---------------------------------------------------------------
First Pacific Company Ltd.
(Conglomerates) 1,323,000 1,579,778
- ---------------------------------------------------------------
Hang Seng Bank Ltd.
(Banking) 114,500 1,289,631
- ---------------------------------------------------------------
Hong Kong & China Gas Co. Ltd.
(Electric Power) 746,640 1,185,525
- ---------------------------------------------------------------
HSBC Holdings PLC
(Banking) 63,400 1,604,131
- ---------------------------------------------------------------
Hutchison Whampoa Ltd.
(Conglomerates) 169,000 1,254,437
- ---------------------------------------------------------------
New World Infrastructure Ltd.(a)
(Building Materials) 339,800 960,643
- ---------------------------------------------------------------
Sun Hung Kai Properties Ltd.
(Real Estate) 105,600 1,145,085
- ---------------------------------------------------------------
16,031,000
- ---------------------------------------------------------------
INDONESIA-0.72%
PT Bank Internasional Indonesia
(Banking) 2,566,684 1,848,435
- ---------------------------------------------------------------
PT Indosat
(Telcommunications) 84,500 232,984
- ---------------------------------------------------------------
PT Indosat-ADR
(Telecommunications) 9,050 248,875
- ---------------------------------------------------------------
2,330,294
- ---------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
IRELAND-0.10%
Elan Corp. PLC-ADR(a)
(Medical-Drugs) 9,200 $ 312,800
- ---------------------------------------------------------------
ISRAEL-0.41%
Teva Pharmaceutical Industries
Ltd.-ADR
(Medical-Drugs) 26,500 1,344,875
- ---------------------------------------------------------------
ITALY-2.66%
Credito Italiano S.p.A.
(Banking) 1,040,000 1,458,402
- ---------------------------------------------------------------
Edison S.p.A.
(Electric Power) 232,000 1,229,122
- ---------------------------------------------------------------
Ente Nazionale Idrocarburi S.p.A.
(Oil & Gas-Exploration &
Production) 290,000 1,476,274
- ---------------------------------------------------------------
Istituto Mobiliare Italiano
S.p.A.
(Banking) 138,000 1,173,041
- ---------------------------------------------------------------
Telecom Italia Mobile S.p.A.
(Telecommunications) 460,000 1,442,995
- ---------------------------------------------------------------
Telecom Italia S.p.A.
(Telecommunications) 700,000 1,853,257
- ---------------------------------------------------------------
8,633,091
- ---------------------------------------------------------------
JAPAN-9.61%
Advantest Corp.
(Semiconductors) 17,930 995,836
- ---------------------------------------------------------------
Bridgestone Corp.
(Automobile/Truck Parts & Tires) 82,000 1,744,200
- ---------------------------------------------------------------
Canon, Inc.
(Office Automation) 97,000 2,300,154
- ---------------------------------------------------------------
DDI Corp.
(Telecommunications) 262 1,739,992
- ---------------------------------------------------------------
Fuji Photo Film Co.
(Electronic
Components/Miscellaneous) 61,000 2,330,720
- ---------------------------------------------------------------
Honda Motor Co., Ltd.
(Automobile-Manufacturers) 73,000 2,265,884
- ---------------------------------------------------------------
Ibiden Co., Ltd.
(Building Materials) 106,000 1,394,572
- ---------------------------------------------------------------
JUSCO Co.
(Retail-Stores) 40,000 1,228,975
- ---------------------------------------------------------------
Matsushita Electric Industrial
Co. Ltd.
(Electronic
Components\Miscellaneous) 61,000 975,539
- ---------------------------------------------------------------
Nippon Telegraph & Telephone Corp.
(Telecommunications) 250 1,762,713
- ---------------------------------------------------------------
Nippon Television Network
(Advertising/Broadcasting) 2,050 604,010
- ---------------------------------------------------------------
NSK Ltd.
(Metals) 230,000 1,387,954
- ---------------------------------------------------------------
NTT Data Communications Systems Co.
(Computer Software/Services) 470 1,373,695
- ---------------------------------------------------------------
Okuma Corp.(a)
(Machine Tools) 78,000 614,488
- ---------------------------------------------------------------
Ricoh Corp. Ltd.
(Office Automation) 124,000 1,475,086
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
SMC Corp.
(Machine-Miscellaneous) 6,800 $ 498,208
- ---------------------------------------------------------------
Sony Corp.
(Electronic
Components/Miscellaneous) 27,000 1,965,415
- ---------------------------------------------------------------
TDK Corp.
(Electronic
Components/Miscellaneous) 31,000 2,234,608
- ---------------------------------------------------------------
Tokyo Electron Ltd.
(Electronic
Components/Miscellaneous) 28,600 1,104,030
- ---------------------------------------------------------------
Toyota Motor Corp.
(Automobile-Manufacturers) 74,000 2,145,350
- ---------------------------------------------------------------
Yamatake-Honeywell Co.
(Airlines) 71,000 1,057,155
- ---------------------------------------------------------------
31,198,584
- ---------------------------------------------------------------
MALAYSIA-0.71%
Commerce Asset Holdings Berhad
(Finance-Asset Management) 93,000 555,600
- ---------------------------------------------------------------
Edaran Otomobil Nasional Berhad
(Automobile-Manufacturers) 70,000 660,746
- ---------------------------------------------------------------
Malayan Banking Berhad
(Banking) 109,000 1,085,311
- ---------------------------------------------------------------
2,301,657
- ---------------------------------------------------------------
MEXICO-1.75%
Coca-Cola Femsa S.A.-ADR
(Beverages-Soft Drinks) 24,200 843,975
- ---------------------------------------------------------------
Fomento Economico Mexicano, S.A.
de C.V.-Class B
(Beverages-Alcoholic) 261,050 1,225,340
- ---------------------------------------------------------------
Grupo Industrial Maseca S.A. de
C.V.-Class B
(Food/Processing) 807,600 790,679
- ---------------------------------------------------------------
Grupo Televisa S.A.-GDR(a)
(Advertising/Broadcasting) 36,900 853,313
- ---------------------------------------------------------------
Panamerican Beverages, Inc.-Class A
(Beverages-Soft Drinks) 68,000 1,972,000
- ---------------------------------------------------------------
5,685,307
- ---------------------------------------------------------------
NETHERLANDS-3.93%
DSM N.V.
(Chemicals-Specialty) 6,900 687,061
- ---------------------------------------------------------------
Elsevier N.V.
(Publishing) 23,000 368,321
- ---------------------------------------------------------------
Getronics N.V.
(Computer Software/Services) 41,000 1,241,595
- ---------------------------------------------------------------
Gucci Group N.V.-ADR -- New York
Registered Shares
(Textiles) 10,300 714,563
- ---------------------------------------------------------------
Koninklijke Ahold N.V.
(Retail-Food & Drugs) 10,200 696,299
- ---------------------------------------------------------------
Nutricia Verenigde Bedrijven N.V.
(Food/Processing) 11,750 1,782,734
- ---------------------------------------------------------------
Oce-Van Der Grinten N.V.
(Office Automation) 7,000 846,841
- ---------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-(CONTINUED)
Philips Electronics N.V.
(Electronic
Components/Miscellaneous) 60,500 $ 3,158,061
- ---------------------------------------------------------------
Royal Dutch Petroleum Co.
(Oil & Gas-Services) 6,600 1,179,551
- ---------------------------------------------------------------
Royal Dutch Petroleum Co.-ADR-New
York Shares
(Oil & Gas-Services) 6,000 1,081,500
- ---------------------------------------------------------------
Verenigde Nederlandse
Uitgeversbedrijven Verenigd Bezit
(Publishing) 15,500 320,613
- ---------------------------------------------------------------
Wolters Kluwer N.V.
(Publishing) 5,700 675,527
- ---------------------------------------------------------------
12,752,666
- ---------------------------------------------------------------
NORWAY-0.42%
Storebrand A.S.A.
(Insurance-Multi-Line Property)(a) 225,000 1,374,417
- ---------------------------------------------------------------
PHILIPPINES-0.97%
C & P Homes, Inc.
(Home Building) 1,280,000 485,400
- ---------------------------------------------------------------
Filinvest Land Inc.(a)
(Real Estate) 2,069,700 486,619
- ---------------------------------------------------------------
Metro Pacific Corp.
(Conglomerates) 2,309,000 534,126
- ---------------------------------------------------------------
Metropolitan Bank & Trust Co.
(Banking) 29,835 610,956
- ---------------------------------------------------------------
Philippine Long Distance
Telephone Co.
(Telecommunications) 8,230 469,706
- ---------------------------------------------------------------
Philippine Long Distance
Telephone Co.-ADR
(Telecommunications) 8,900 496,175
- ---------------------------------------------------------------
Southeast Asia Cement Holdings,
Inc.(a)
(Building Materials) 1,593,000 73,700
- ---------------------------------------------------------------
3,156,682
- ---------------------------------------------------------------
PORTUGAL-0.48%
Portugal Telecom S.A.(a)
(Telecommunications) 42,000 1,547,368
- ---------------------------------------------------------------
SINGAPORE-0.99%
City Developments Ltd.
(Real Estate) 129,000 1,042,694
- ---------------------------------------------------------------
DBS Land Ltd.
(Real Estate) 416,000 1,344,995
- ---------------------------------------------------------------
Overseas Union Bank Ltd.
(Banking) 125,000 820,380
- ---------------------------------------------------------------
3,208,069
- ---------------------------------------------------------------
SOUTH AFRICA-0.32%
Sasol Ltd.
(Oil & Gas-Exploration &
Production) 80,100 1,026,808
- ---------------------------------------------------------------
SPAIN-2.58%
Banco Bilbao Vizcaya, S.A.
(Banking) 24,500 1,648,918
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SPAIN-(CONTINUED)
Banco Popular Espanol S.A.
(Banking) 8,000 $ 1,696,248
- ---------------------------------------------------------------
Empresa Nacional de Electricidad, S.A.
(Electric Power) 18,300 1,279,204
- ---------------------------------------------------------------
Gas Natural SDG, S.A.-Class E
(Gas Distribution) 3,300 700,831
- ---------------------------------------------------------------
Iberdrola S.A.
(Electric Power) 60,000 677,131
- ---------------------------------------------------------------
Telefonica de Espana
(Telecommunications) 93,000 2,382,169
- ---------------------------------------------------------------
8,384,501
- ---------------------------------------------------------------
SWEDEN-1.08%
Hennes & Mauritz A.B.-B Shares
(Retail-Stores) 10,300 1,490,242
- ---------------------------------------------------------------
Securitas A.B.-Class B
(Security & Safety Services) 18,300 440,896
- ---------------------------------------------------------------
Sparbanken Sverige A.B.-Class A
(Banking) 46,000 820,936
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR
(Telecommunications) 22,000 739,750
- ---------------------------------------------------------------
3,491,824
- ---------------------------------------------------------------
SWITZERLAND-2.49%
ABB A.G.(a)
(Engineering & Construction) 1,280 1,549,963
- ---------------------------------------------------------------
Adecco S.A.
(Business Services) 5,000 1,668,815
- ---------------------------------------------------------------
Ciba Specialty Chemicals A.G.(a)
(Chemicals-Specialty) 1,393 120,013
- ---------------------------------------------------------------
Clariant A.G.
(Chemicals-Specialty) 1,650 944,712
- ---------------------------------------------------------------
Nestle S.A.
(Food/Processing) 680 825,724
- ---------------------------------------------------------------
Novartis A.G.
(Medical-Drugs) 2,268 2,987,895
- ---------------------------------------------------------------
8,097,122
- ---------------------------------------------------------------
THAILAND-0.14%
Bank of Ayudhya Public Co., Ltd.
(Banking) 11,400 29,239
- ---------------------------------------------------------------
Krung Thai Bank Public Co. Ltd.
(Banking) 230,000 288,353
- ---------------------------------------------------------------
Siam Commercial Bank PLC
(Banking) 21,900 128,269
- ---------------------------------------------------------------
445,861
- ---------------------------------------------------------------
UNITED KINGDOM-11.90%
Airtours PLC
(Leisure & Recreation) 71,900 1,068,595
- ---------------------------------------------------------------
B.A.T. Industries PLC
(Conglomerates) 174,000 1,469,271
- ---------------------------------------------------------------
Bass PLC
(Beverages-Alcoholic) 24,000 309,822
- ---------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
British Aerospace PLC
(Aerospace/Defense) 64,000 $ 1,359,870
- ---------------------------------------------------------------
British Petroleum Co. PLC
(Oil & Gas-Services) 62,000 711,442
- ---------------------------------------------------------------
Burton Group PLC
(Retail-Stores) 473,000 1,169,084
- ---------------------------------------------------------------
Caradon PLC
(Building Materials) 136,000 547,747
- ---------------------------------------------------------------
Compass Group PLC
(Restaurants) 59,200 649,751
- ---------------------------------------------------------------
Danka Business Systems PLC-ADR
(Office Automation) 16,000 489,000
- ---------------------------------------------------------------
Dixons Group PLC
(Retail-Stores) 164,000 1,344,959
- ---------------------------------------------------------------
EMAP PLC
(Publishing) 51,000 635,640
- ---------------------------------------------------------------
FKI PLC
(Conglomerates) 155,000 457,212
- ---------------------------------------------------------------
General Electric Co. PLC
(Electronic
Components/Miscellaneous) 160,000 951,702
- ---------------------------------------------------------------
GKN PLC
(Automobile/Truck Parts &
Tires) 39,000 601,118
- ---------------------------------------------------------------
Granada Group PLC
(Leisure & Recreation) 130,000 1,875,203
- ---------------------------------------------------------------
Guinness PLC
(Beverages-Alcoholic) 195,000 1,611,831
- ---------------------------------------------------------------
Hays PLC
(Business Services) 178,000 1,576,613
- ---------------------------------------------------------------
Kingfisher PLC
(Retail-Stores) 140,000 1,515,721
- ---------------------------------------------------------------
Ladbroke Group PLC
(Hotels/Motels) 382,000 1,433,274
- ---------------------------------------------------------------
Lloyds TSB Group PLC
(Finance-Savings & Loans) 96,000 877,536
- ---------------------------------------------------------------
LucasVarity PLC
(Automobile/Truck Parts &
Tires) 484,000 1,466,904
- ---------------------------------------------------------------
Marks & Spencer PLC
(Retail-Stores) 110,000 873,582
- ---------------------------------------------------------------
Medeva PLC
(Medical-Drugs) 67,200 326,742
- ---------------------------------------------------------------
Next PLC
(Retail-Stores) 77,000 813,055
- ---------------------------------------------------------------
Orange PLC(a)
(Telecommunications) 215,000 752,674
- ---------------------------------------------------------------
Peninsular & Oriental Steam Navigation
Co. (The)
(Transportation-Miscellaneous) 6,550 63,748
- ---------------------------------------------------------------
Provident Financial PLC
(Finance-Consumer Credit) 137,400 1,271,562
- ---------------------------------------------------------------
Railtrack Group PLC
(Railroads) 235,000 1,772,974
- ---------------------------------------------------------------
Rentokil Initial PLC
(Business Services) 239,000 1,566,864
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
Scottish & Newcastle PLC
(Beverages-Alcoholic) 60,000 $ 647,650
- ---------------------------------------------------------------
Siebe PLC
(Electronic
Components/Miscellaneous) 75,000 1,109,806
- ---------------------------------------------------------------
SmithKline Beecham PLC-ADR
(Medical-Drugs) 15,000 1,209,375
- ---------------------------------------------------------------
Smiths Industries PLC
(Electronics/Defense) 30,000 367,341
- ---------------------------------------------------------------
Standard Chartered PLC
(Finance-Asset Management) 41,500 627,881
- ---------------------------------------------------------------
Tarmac PLC
(Building Materials) 840,000 1,681,361
- ---------------------------------------------------------------
Unilever PLC
(Consumer Non-Durables) 56,000 1,472,609
- ---------------------------------------------------------------
Vodafone Group PLC
(Telecommunications) 150,000 669,773
- ---------------------------------------------------------------
WPP Group PLC
(Advertising/Broadcasting) 316,000 1,293,193
- ---------------------------------------------------------------
38,642,485
- ---------------------------------------------------------------
Total Foreign Stocks & Other Equity
Interests 219,935,453
- ---------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-0.25%
FINANCE (CONSUMER CREDIT)-0.10%
SunAmerica, Inc., $3.10 Conv.
Pfd. 3,300 336,600
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-0.15%
MGIC Investment Corp., $3.12
Conv. Pfd. 7,000 489,125
- ---------------------------------------------------------------
Total Domestic Convertible Preferred Stocks 825,725
- ---------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT(c)
<S> <C> <C>
DOMESTIC CONVERTIBLE NOTES-0.30%
SEMICONDUCTORS-0.30%
Altera Corp.,
Conv. Sub. Notes
5.75%, 06/15/02(d)
(Acquired 02/10/97; cost
$869,363) $ 485,000 983,517
- ---------------------------------------------------------------
U.S. DOLLAR DENOMINATED FOREIGN
BONDS & NOTES-0.68%
GERMANY-0.51%
Volkswagen International Finance N.V.,
Conv. Gtd. Notes,
(Automobile-Manufacturers)
3.00%, 01/24/02 1,330,000 1,652,525
- ---------------------------------------------------------------
HONG KONG-0.07%
New World Infrastructure Ltd.,
Conv. Bonds, (Banking)
5.00%, 07/15/01(d)
(Acquired 04/10/97-04/11/97;
cost $234,938) 200,000 227,500
- ---------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(c) VALUE
<S> <C> <C>
PHILIPPINES-0.10%
Metropolitan Bank & Trust
International Finance Ltd.,
Conv. Deb., (Banking)
2.75%, 09/10/00 $ 245,000 $ 313,600
- ---------------------------------------------------------------
Total U.S. Dollar Denominated
Foreign Bonds & Notes 2,193,625
- ---------------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED
FOREIGN BONDS & NOTES-0.80%
FRANCE-0.20%
AXA-UAP,
Conv. Sr. Deb., (Insurance-Life
& Health)
4.50%, 01/01/99 FRF 2,835,000 673,959
- ---------------------------------------------------------------
ITALY-0.40%
Pirelli S.p.A.,
Conv. Bonds, (Automobile/Truck
Parts & Tires)
5.00%, 12/31/98 ITL 1,591,686,200 1,287,535
- ---------------------------------------------------------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT(c) VALUE
<S> <C> <C>
JAPAN-0.20%
Ricoh Co., Ltd.,
Conv. Bonds, (Office
Automation)
0.35%, 03/31/03 JPY 65,000,000 $ 641,116
- ---------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Foreign Bonds &
Notes 2,602,610
- ---------------------------------------------------------------
REPURCHASE AGREEMENT-0.40%(e)
HSBC Securities, Inc., 5.05%,
05/01/97(f) $ 1,287,908 1,287,908
- ---------------------------------------------------------------
TOTAL INVESTMENT-98.66% 320,195,094
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.34% 4,334,512
- ---------------------------------------------------------------
NET ASSETS-100.00% $324,529,606
===============================================================
</TABLE>
Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
Deb. - Debentures
GDR - Global Depository Receipt
Gtd. - Guaranteed
Pfd. - Preferred
Sr. - Senior
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Issued as a unit. This unit also includes 42,500 warrants to exchange into
one ordinary share per warrant.
(c) Principal in U.S. Dollars unless otherwise indicated.
(d) Restricted security. May be resold to qualified institutional buyers in
accordance with the 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 April 30, 1997 was $1,211,017
which represented 0.37% of the Fund's net assets.
(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 investment 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
$100,014,028. Collateralized by $96,950,000 U.S. Government obligations,
7.50% to 7.875% due 10/31/99 to 12/31/99 with an aggregate market value at
April 30, 1997 of $102,002,050.
See Notes to Financial Statements.
13
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$284,581,349) $ 320,195,094
- --------------------------------------------------------
Foreign currencies, at market value
(cost $1,669,554) 1,649,017
- --------------------------------------------------------
Receivables for:
Investments sold 5,054,287
- --------------------------------------------------------
Capital stock sold 1,447,389
- --------------------------------------------------------
Dividends and interest 815,224
- --------------------------------------------------------
Investment for deferred compensation
plan 7,578
- --------------------------------------------------------
Other assets 28,977
- --------------------------------------------------------
Total assets 329,197,566
- --------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 3,504,253
- --------------------------------------------------------
Capital stock reacquired 496,621
- --------------------------------------------------------
Deferred compensation 7,578
- --------------------------------------------------------
Accrued advisory fees 218,517
- --------------------------------------------------------
Accrued administrative services fees 6,958
- --------------------------------------------------------
Accrued distribution fees 225,871
- --------------------------------------------------------
Accrued transfer agent fees 81,800
- --------------------------------------------------------
Accrued operating expenses 126,362
- --------------------------------------------------------
Total liabilities 4,667,960
- --------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $ 324,529,606
========================================================
NET ASSETS:
Class A $ 148,010,453
========================================================
Class B $ 176,519,153
========================================================
CAPITAL STOCK, $.001 PAR VALUE PER
SHARE:
Class A:
Authorized 200,000,000
- --------------------------------------------------------
Outstanding 9,811,280
========================================================
Class B:
Authorized 200,000,000
- --------------------------------------------------------
Outstanding 11,856,382
========================================================
Class A:
Net asset value and redemption price
per share $ 15.09
========================================================
Offering price per share:
(Net asset value $15.09 divided by
95.25%) $ 15.84
========================================================
Class B:
Net asset value and offering price per
share $ 14.89
========================================================
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1997
(UNAUDITED)
<S> <C>
INVESTMENT INCOME:
Dividends (net of $191,730 foreign
withholding tax) $ 1,692,020
- --------------------------------------------------------
Interest 178,493
- --------------------------------------------------------
Total investment income 1,870,513
- --------------------------------------------------------
EXPENSES:
Advisory fees 1,210,003
- --------------------------------------------------------
Administrative services fees 42,968
- --------------------------------------------------------
Directors' fees 3,826
- --------------------------------------------------------
Distribution fees -- Class A 336,112
- --------------------------------------------------------
Distribution fees -- Class B 751,310
- --------------------------------------------------------
Custodian fees 168,387
- --------------------------------------------------------
Transfer agent fees -- Class A 147,965
- --------------------------------------------------------
Transfer agent fees -- Class B 209,315
- --------------------------------------------------------
Other 118,820
- --------------------------------------------------------
Total expenses 2,988,706
- --------------------------------------------------------
Less: Expenses paid indirectly (2,363)
- --------------------------------------------------------
Net expenses 2,986,343
- --------------------------------------------------------
Net investment income (loss) (1,115,830)
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FUTURES CONTRACTS:
Net realized gain (loss) on sales of:
Investment securities 3,518,326
- --------------------------------------------------------
Foreign currencies (160,717)
- --------------------------------------------------------
3,357,609
- --------------------------------------------------------
Net unrealized appreciation of:
Investment securities 12,527,245
- --------------------------------------------------------
Foreign currencies 36,629
- --------------------------------------------------------
12,563,874
- --------------------------------------------------------
Net gain on investment securities and
foreign currencies 15,921,483
- --------------------------------------------------------
Net increase in net assets resulting from
operations $14,805,653
========================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
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) $ (1,115,830) $ (548,400)
- -------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment
securities, foreign currencies and futures contracts 3,357,609 (604,088)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 12,563,874 20,032,132
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 14,805,653 18,879,644
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (516,173)
- -------------------------------------------------------------------------------------------
Class B -- (413,018)
- -------------------------------------------------------------------------------------------
Share transactions-net:
Class A 25,693,399 81,693,730
- -------------------------------------------------------------------------------------------
Class B 47,211,382 96,263,897
- -------------------------------------------------------------------------------------------
Net increase in net assets 87,710,434 195,908,080
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 236,819,172 40,911,092
- -------------------------------------------------------------------------------------------
End of period $324,529,606 $ 236,819,172
===========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $287,357,242 $ 214,452,461
- -------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (1,108,292) 7,538
- -------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities, foreign currencies and futures
contracts 2,695,402 (662,207)
- -------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 35,585,254 23,021,380
- -------------------------------------------------------------------------------------------
$324,529,606 $ 236,819,172
===========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Growth Fund (the "Fund") is an investment portfolio of AIM
International Funds, Inc. (the "Company"). The Company is a Maryland corporation
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company consisting of four separate
series portfolios: AIM Global Growth Fund, AIM Global Aggressive Growth Fund,
AIM Global Income Fund and AIM International Equity Fund. The Fund currently
offers two different classes of shares: Class A shares and Class B shares. Class
A shares are sold with a front-end sales charge. Class B shares are sold with a
contingent deferred sales charge. Matters affecting each portfolio or class are
voted on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is to provide long-term growth of capital. The
Fund seeks to achieve its objectives by investing in a portfolio of global
equity securities of selected companies which are considered by AIM to have
strong earnings momentum.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations--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, at the mean between
the closing bid and asked prices on the day of valuation. If a mean is not
available, as is the case in some foreign markets, the closing bid will be
used absent a last sales price. Securities traded in the over-the-counter
market (but not including securities reported on the NASDAQ National Market
System) are valued at the mean between the closing bid and asked prices on
valuation date. Securities reported on the NASDAQ National Market System are
valued at the last sales price on the valuation date or, absent a
15
<PAGE> 18
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 an independent
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue,
corporate 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 will not be reflected in the computation of the Fund's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as
determined in good faith by or under the supervision of the Board of
Directors.
B. Foreign Currency Translations--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts--A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a forward currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
D. Securities Transactions, Investment Income and Distribu-
tions--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. The Fund has a capital loss carryforward of
$630,387 (which may be carried forward to offset future taxable capital
gains, if any) which expires, if not previously utilized, in the year 2004.
F. Stock Index Futures Contracts--The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the Fund's
basis in the contract. Risks include the possibility of an illiquid market
and that a change in the value of contracts may not correlate with changes in
the value of the securities being hedged.
G. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.85% of
the first $1 billion of the Fund's average daily net assets, plus 0.80% of the
Fund's average daily net assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for administrative costs incurred in providing
accounting services to the Fund. During the six months ended April 30, 1997, AIM
was reimbursed $42,968 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency
services to the Fund. During the six months ended April 30, 1997, AFS was paid
$209,646 for such services.
The Fund received reductions in transfer agency fees of $2,234 from dividends
received on balances in cash management bank accounts. In addition, the Fund
incurred expenses of $129 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 $2,363 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
16
<PAGE> 19
Rule 12b-1 under the 1940 Act with respect to the Fund's Class A shares (the
"Class A Plan") and with respect to the Fund's Class B shares (the "Class B
Plan") (collectively the "Plans"). The Fund, pursuant to the Class A Plan, pays
AIM Distributors an annual rate of 0.50% of the average daily net assets
attributable to the Class A shares. The Class A Plan is designed to compensate
AIM Distributors for certain promotional and other sales related costs. Of the
total compensation payable, a service fee of 0.25% is paid to selected dealers
and financial institutions who furnish continuing personal shareholder services
to their customers who purchase and own Class A shares of the Fund. The Fund,
pursuant to the Class B Plan, pays AIM Distributors at an annual rate of 1.00%
of the average daily net assets attributable to the Class B shares. Of this
amount, the Fund pays a service fee of 0.25% of the average daily net assets of
the Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee under such
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges, that may be
paid by the respective classes. AIM Distributors may, from time to time, assign,
transfer or pledge to one or more designees, its rights to all or a designated
portion of (a) compensation received by AIM Distributors from the Fund pursuant
to the Class B Plan (but not AIM Distributors' duties and obligations pursuant
to the Class B Plan) and (b) any contingent deferred sales charges received by
AIM Distributors related to the Class B shares. During the six months ended
April 30, 1997, the Class A shares and the Class B shares paid AIM Distributors
$336,112 and $751,310, respectively, as compensation under the Plans.
AIM Distributors received commissions of $166,163 from the 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 $18,107 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
$2,733 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
$192,660,508 and $120,261,274, 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 $43,030,878
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (7,429,856)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $35,601,022
=========================================================
</TABLE>
Cost of investments for tax purposes is $284,594,072.
17
<PAGE> 20
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 2,689,114 $ 40,270,274 7,117,057 $ 94,636,553
- ------------------------------------------------------------ --------- ------------ ----------- ------------
Class B 3,790,488 56,209,738 7,683,810 101,786,913
- ------------------------------------------------------------ --------- ------------ ----------- ------------
Issued as reinvestment of distributions:
Class A -- -- 36,930 453,130
- ------------------------------------------------------------ --------- ------------ ----------- ------------
Class B -- -- 31,124 379,711
- ------------------------------------------------------------ --------- ------------ ----------- ------------
Reacquired:
Class A (975,862) (14,576,875) (983,830) (13,395,953)
- ------------------------------------------------------------ --------- ------------ ----------- ------------
Class B (607,226) (8,998,356) (441,521) (5,902,727)
- ------------------------------------------------------------ --------- ------------ ----------- ------------
4,896,514 $ 72,904,781 13,443,570 $177,957,627
============================================================ ========= ============ =========== ============
</TABLE>
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a Class A share and a Class B share
outstanding during 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
operations 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 $ 14.20 $ 12.32 $ 10.23 $ 10.00
- ------------------------------------------------------------ -------- --------- -------- --------
Income from investment operations:
Net investment income (loss) (0.03) (0.01) (0.02) -
- ------------------------------------------------------------ -------- --------- -------- --------
Net gains on securities (both realized and unrealized) 0.92 2.11 2.11 0.23
- ------------------------------------------------------------ -------- --------- -------- --------
Total from investment operations 0.89 2.10 2.09 0.23
- ------------------------------------------------------------ -------- --------- -------- --------
Less distributions:
Dividends from net investment income - - (0.004) -
- ------------------------------------------------------------ -------- --------- -------- --------
Distributions from net realized capital gains - (0.22) - -
- ------------------------------------------------------------ -------- --------- -------- --------
Total distributions - (0.22) (0.004) -
- ------------------------------------------------------------ -------- --------- -------- --------
Net asset value, end of period $ 15.09 $ 14.20 $ 12.32 $ 10.23
============================================================ ======== ========= ======== ========
Total return(a) 6.27% 17.26% 20.48% 2.30%
============================================================ ======== ========= ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $148,010 $ 114,971 $ 23,754 $ 3,093
============================================================ ======== ========= ======== ========
Ratio of expenses to average net assets(b) 1.81%(c)(d) 1.93% 2.12% 1.95%(e)
============================================================ ======== ========= ======== ========
Ratio of net investment income (loss) to average net
assets(f) (0.50)%(c) (0.13)% (0.28)% 0.10%(e)
============================================================ ======== ========= ======== ========
Portfolio turnover rate 43% 82% 79% 6%
============================================================ ======== ========= ======== ========
Average brokerage commission rate paid(g) $ 0.0427 $ 0.0234 N/A N/A
============================================================ ======== ========= ======== ========
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(b) After fee waivers and expense reimbursements. Ratios of expenses to average
net assets prior to fee waivers and/or expense reimbursements were 1.94%,
2.98% and 5.67% (annualized) for the periods 1996-1994, respectively.
(c) Ratios are annualized and based on average net assets of $135,558,903.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) After fee waivers and expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were (0.14)%, (1.14)% and (3.63)% (annualized) for the
periods 1996-1994, respectively.
(g) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
18
<PAGE> 21
<TABLE>
<CAPTION>
OCTOBER 31,
APRIL 30, -------------------------------------
1997 1996 1995 1994
--------- --------- -------- --------
<S> <C> <C> <C> <C>
CLASS B:
Net asset value, beginning of period $ 14.05 $ 12.26 $ 10.22 $ 10.00
- ------------------------------------------------------------ --------- --------- -------- --------
Income from investment operations:
Net investment income (loss) (0.07) (0.05) (0.04) -
- ------------------------------------------------------------ --------- --------- -------- --------
Net gains on securities (both realized and unrealized) 0.91 2.06 2.08 0.22
- ------------------------------------------------------------ --------- --------- -------- --------
Total from investment operations 0.84 2.01 2.04 0.22
- ------------------------------------------------------------ --------- --------- -------- --------
Less distributions:
Distributions from net realized capital gains - (0.22) - -
- ------------------------------------------------------------ --------- --------- -------- --------
Total distributions - (0.22) - -
- ------------------------------------------------------------ --------- --------- -------- --------
Net asset value, end of period $ 14.89 $ 14.05 $ 12.26 $ 10.22
============================================================ ========= ========= ======== ========
Total return(a) 5.98% 16.60% 19.96% 2.20%
============================================================ ========= ========= ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 176,519 $ 121,848 $ 17,157 $ 1,277
============================================================ ========= ========= ======== ========
Ratio of expenses to average net assets(b) 2.35%(c)(d) 2.48% 2.64% 2.51%(e)
============================================================ ========= ========= ======== ========
Ratio of net investment income (loss) to average net
assets(f) (1.04)%(c) (0.69)% (0.79)% (0.47)%(e)
============================================================ ========= ========= ======== ========
Portfolio turnover rate 43% 82% 79% 6%
============================================================ ========= ========= ======== ========
Average brokerage commission rate paid(g) $ 0.0427 $ 0.0234 N/A N/A
============================================================ ========= ========= ======== ========
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(b) After fee waivers and expense reimbursements. Ratios of expenses to average
net assets prior to fee waivers and/or expense reimbursements were 2.49%,
3.38% and 6.20% (annualized) for the periods 1996-1994, respectively.
(c) Ratios are annualized and based on average net assets of $151,507,217.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) After fee waivers and expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were (0.69)%, (1.54)% and (4.16)% (annualized) for the
periods 1996-1994, respectively.
(g) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
19
<PAGE> 22
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) 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:
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<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............... 10,535,120 124,963 463,813
(3) Elimination of Fundamental Investment Policy................ 7,611,924 323,037 504,221
(4) KPMG Peat Marwick LLP....................................... 128,509,801 995,829 4,726,709
</TABLE>
20
<PAGE> 23
Directors & Officers
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<S> <C> <C>
Board of Directors OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
Houston, TX 77046
Bruce L. Crockett Robert H. Graham
Formerly Director, President, and Chief President INVESTMENT ADVISOR
Executive Officer
COMSAT Corporation John J. Arthur A I M Advisors, Inc.
Senior Vice President and Treasurer 11 Greenway Plaza
Owen Daly II Suite 100
Director Carol F. Relihan Houston, TX 77046
Cortland Trust Inc. Senior Vice President
and Secretary TRANSFER AGENT
Jack Fields
Formerly Member of the Gary T. Crum A I M Fund Services, Inc.
U.S. House of Representatives Senior Vice President P.O. Box 4739
Houston, TX 77210-4739
Carl Frischling Scott G. Lucas
Partner Senior Vice President CUSTODIAN
Kramer, Levin, Naftalis & Frankel
Dana R. Sutton State Street Bank & Trust
Robert H. Graham Vice President and Assistant Treasurer 225 Franklin Street
President and Chief Executive Officer Boston, MA 02110
A I M Management Group Inc. Robert G. Alley
Vice President COUNSEL TO THE FUND
John F. Kroeger
Formerly Consultant Melville B. Cox Ballard Spahr
Wendell & Stockel Associates, Inc. Vice President Andrews & Ingersoll
1735 Market Street
Lewis F. Pennock Jonathan C. Schoolar Philadelphia, PA 19103
Attorney Vice President
COUNSEL TO THE DIRECTORS
Ian W. Robinson P. Michelle Grace
Consultant; Formerly Executive Assistant Secretary Kramer, Levin, Naftalis & Frankel
Vice President and 919 Third Avenue
Chief Financial Officer David L. Kite New York, NY 10022
Bell Atlantic Management Assistant Secretary
Services, Inc. DISTRIBUTOR
Nancy L. Martin
Louis S. Sklar Assistant Secretary A I M Distributors, Inc.
Executive Vice President 11 Greenway Plaza
Hines Interests Ofelia M. Mayo Suite 100
Limited Partnership Assistant Secretary Houston, TX 77046
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 24
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
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
-----------------
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