AIM INTERNATIONAL FUNDS INC, 497, 1998-02-24

AIM INTERNATIONAL FUNDS INC
497, 1998-02-24

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<PAGE> 1

[AIM LOGO THE AIM FAMILY OF FUNDS--Registered Trademark--
APPEARS HERE]

AIM GLOBAL AGGRESSIVE GROWTH FUND
AIM GLOBAL GROWTH FUND
AIM GLOBAL INCOME FUND

(SERIES PORTFOLIOS OF AIM INTERNATIONAL FUNDS, INC.)

PROSPECTUS
FEBRUARY 20, 1998

AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GROWTH FUND and AIM
GLOBAL INCOME FUND (collectively, the "Funds") are series investment
portfolios of AIM International Funds, Inc. (the "Company"), an
open-end, series, management investment company.

AIM GLOBAL AGGRESSIVE GROWTH FUND ("AGGRESSIVE GROWTH FUND"). The
investment objective of the AGGRESSIVE GROWTH FUND is to provide
above-average long-term growth of capital appreciation. The Fund
seeks to achieve its objective by investing in a portfolio of global
(i.e., U.S. and foreign) equity securities including securities of
selected companies with relatively small market capitalization.

AIM GLOBAL GROWTH FUND ("GROWTH FUND"). The investment objective of
GROWTH FUND is to provide long-term growth of capital. The Fund seeks
to achieve its objective by investing in a portfolio of global (i.e.,
U.S. and foreign) equity securities of selected companies that are
considered by the Fund's investment advisor to have strong earnings
momentum.

AIM GLOBAL INCOME FUND ("INCOME FUND"). The investment objective of
INCOME FUND is to provide high current income. The Fund seeks to
achieve its objective by investing in a portfolio of U.S. and foreign
government and corporate debt securities. As a secondary objective,
the Fund seeks preservation of principal and capital appreciation.

This Prospectus sets forth basic information about the Funds that
prospective investors should know before investing. It should be read
and retained for future reference. A Statement of Additional
Information, dated February 20, 1998, has been filed with the United
States Securities and Exchange Commission (the "SEC") and is
incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the
Company at P.O. Box 4739, Houston, Texas 77210-4739 or by calling
(800) 347-4246. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material
incorporated by reference, and other information regarding the Funds.
Additional information about the Funds may also be obtained on the
Web at http://www.aimfunds.com.

THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND THE FUNDS' SHARES ARE NOT FEDERALLY
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
SHARES OF THE FUNDS INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <C> <C>
SUMMARY.................................. 2 INVESTOR'S GUIDE TO THE AIM FAMILY OF
THE FUNDS................................ 4 FUNDS--Registered Trademark--.......... A-1
Table of Fees and Expenses............. 4 Introduction to The AIM Family of
Financial Highlights................... 6 Funds............................... A-1
Performance............................ 15 How to Purchase Shares................. A-1
Investment Objectives and Policies..... 15 Terms and Conditions of Purchase of the
Hedging Strategies..................... 18 AIM
Other Investment Techniques............ 19 Funds............................... A-2
Risk Factors........................... 21 Special Plans.......................... A-9
Investment Restrictions................ 23 Exchange Privilege..................... A-11
Portfolio Turnover..................... 23 How to Redeem Shares................... A-13
Management............................. 23 Determination of Net Asset Value....... A-17
Organization of the Company............ 27 Dividends, Distributions and Tax
Matters............................. A-18
General Information.................... A-20
APPENDIX A............................... A-21
APPENDIX B............................... A-23
APPLICATION INSTRUCTIONS................. B-1
</TABLE>

SUMMARY
- --------------------------------------------------------------------------------

THE FUNDS. AIM International Funds, Inc. (the "Company") is a Maryland
corporation organized as an open-end, series, management investment company.
Currently, the Company offers six separate series portfolios. Three of these
series are offered pursuant to this Prospectus: AIM GLOBAL AGGRESSIVE GROWTH
FUND ("AGGRESSIVE GROWTH FUND"), AIM GLOBAL GROWTH FUND ("GROWTH FUND") and AIM
GLOBAL INCOME FUND ("INCOME FUND")(individually, a "Fund" and collectively, the
"Funds"), each of which pursues unique investment objectives. The AGGRESSIVE
GROWTH FUND and the GROWTH FUND are diversified investment portfolios; the
INCOME FUND is a non-diversified investment portfolio. For more complete
information on the Funds' investment objectives and policies, see "Investment
Objectives and Policies."

The Company also offers other classes of shares in three other investment
portfolios, AIM ASIAN GROWTH FUND ("ASIAN FUND"), AIM EUROPEAN DEVELOPMENT FUND
("EUROPEAN FUND") and AIM INTERNATIONAL EQUITY FUND ("EQUITY FUND")
(collectively, with AGGRESSIVE GROWTH FUND, GROWTH FUND and INCOME FUND, the
"Funds") each of which pursues unique investment objectives. All such other
Funds offer multiple classes of shares to different types of investors. The
shares of the other Funds of the Company have different sales charges and
expenses, which may affect performance. To obtain information about ASIAN FUND,
EUROPEAN FUND or EQUITY FUND, call (800) 347-4246. See "General Information."

RISK FACTORS. EACH FUND IS DESIGNED FOR LONG-TERM INVESTORS SEEKING GLOBAL
DIVERSIFICATION AND WILLING TO BEAR THE RISKS ASSOCIATED WITH INVESTMENTS IN
FOREIGN SECURITIES, INCLUDING CURRENCY RISK, POLITICAL AND ECONOMIC RISK,
REGULATORY RISK AND MARKET RISK. THE INCOME FUND IS A NON-DIVERSIFIED PORTFOLIO,
AND MAY ALSO INVEST IN HIGH YIELD SECURITIES (I.E., "JUNK BONDS") THAT ENTAIL
CERTAIN RISKS. NONE OF THE FUNDS IS DESIGNED AS A COMPLETE INVESTMENT PROGRAM.
FOR A DISCUSSION OF THESE RISKS, SEE "RISK FACTORS." THE INCOME FUND MAY ENGAGE
IN LEVERAGING WHICH MAY INVOLVE AN INCREASE IN RISK. SEE "OTHER INVESTMENT
TECHNIQUES -- BORROWING."

MANAGEMENT. A I M Advisors, Inc. ("AIM") serves as the Funds' investment
advisor pursuant to an investment advisory agreement (the "Advisory Agreement").
AIM, together with its subsidiaries, manages or advises over 50 investment
company portfolios encompassing a broad range of investment objectives. Under
the terms of the Advisory Agreement, AIM supervises all aspects of the Funds'
operations and provides investment advisory services to the Funds. As
compensation for these services, AIM receives a fee based on each Fund's average
daily net assets. Under an administrative services agreement (the
"Administrative Services Agreement"), AIM is reimbursed by each Fund for its
costs of performing, or arranging for the performance of, certain accounting and
other administrative services for each Fund. Under a transfer agency and service
agreement (the "Transfer Agency and Service Agreement"), A I M Fund Services,
Inc. ("AFS"), AIM's wholly owned subsidiary and a registered transfer agent,
receives a fee for its provision of transfer agency, dividend distribution and
disbursement, and shareholder services for each Fund.

MULTIPLE DISTRIBUTION SYSTEM. Investors may select Class A, Class B or Class C
shares of the Funds which are offered by this Prospectus at an offering price
that reflects differing sales charges and expense levels. See "Terms and
Conditions of Purchase of the AIM Funds -- Sales Charges and Dealer
Concessions."

Class A Shares -- Shares are offered at net asset value plus any
applicable initial sales charge.

Class B Shares -- Shares are offered at net asset value, without an
initial sales charge, and are subject to a maximum contingent deferred
sales charge of 5% on certain redemptions made within six years of the date
on which a purchase was made.

2
<PAGE> 3

Class B shares automatically convert to Class A shares of the same Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.

Class C Shares -- Shares are offered at net asset value, without an
initial sales charge, and are subject to a contingent deferred sales charge
of 1% on certain redemptions made within one year of the date such shares
were purchased.

SUITABILITY FOR INVESTORS. The Multiple Distribution System permits an
investor to choose the method of purchasing shares that is most beneficial given
the amount of the purchase, the length of time the shares are expected to be
held, whether dividends will be paid in cash or reinvested in additional shares
of a Fund and other circumstances. Investors should consider whether, during the
anticipated life of their investment in a Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion or Class C shares would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same
time, and to what extent such differential would be offset by the higher return
on Class A shares. To assist investors in making this determination, the table
under the caption "Table of Fees and Expenses" sets forth examples of the
charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial
sales charges, as described below. Therefore, A I M Distributors, Inc. ("AIM
Distributors") will reject any order for purchase of more than $250,000 for
Class B shares.

PURCHASING SHARES. Initial investments in any class of shares must be at least
$500 and additional investments must be at least $50. The minimum initial
investment is modified for investments through tax-qualified retirement plans
and accounts initially established with an Automatic Investment Plan. The
distributor of the Funds' shares is A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. See "How to Purchase Shares" and "Special Plans."

EXCHANGE PRIVILEGE. The Funds are several of the mutual funds distributed by
AIM Distributors (collectively, "The AIM Family of Funds"). Class A, Class B and
Class C shares of each Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set
forth herein. See "Exchange Privilege."

REDEEMING SHARES. Holders of Class A shares may redeem all or a portion of
their shares at net asset value on any business day, generally without charge. A
contingent deferred sales charge of 1% may apply to certain redemptions of Class
A shares, where purchases of shares in an amount of $1 million or more are made
at net asset value. See "How to Redeem Shares -- Contingent Deferred Sales
Charge Program for Large Purchases."

Holders of Class B shares may redeem all or a portion of their shares at net
asset value on any business day, less a contingent deferred sales charge for
redemptions made within six years following the date on which a purchase was
made. Class B shares redeemed after six years following the date of purchase
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."

Holders of Class C shares may redeem all or a portion of their shares at net
asset value on any business day, less a 1% contingent deferred sales charge for
redemptions made within one year from the date such shares were purchased. See
"How to Redeem Shares -- Multiple Distribution System."

DISTRIBUTIONS. AGGRESSIVE GROWTH FUND and GROWTH FUND declare and pay
dividends from net investment income, if any, and make distributions of realized
capital gains, if any, on an annual basis. INCOME FUND declares dividends from
net investment income on a daily basis and pays such dividends monthly. INCOME
FUND declares and makes distributions of realized short-term capital gains, if
any, annually, and of realized long-term capital gains, if any, annually.
Dividends and distributions of the Funds may be reinvested at net asset value
without payment of a sales charge in the Funds' shares or may be invested in
shares of the other funds in The AIM Family of Funds. See "Dividends,
Distributions and Tax Matters" and "Special Plans."

THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.

3
<PAGE> 4

THE FUNDS
- --------------------------------------------------------------------------------

TABLE OF FEES AND EXPENSES

The following table is designed to help an investor in the Funds understand
the various costs that an investor will bear, both directly and indirectly. The
fees and expenses for Class A and Class B shares set forth in the table are
based on the average net assets of the respective classes of the Funds for the
year ended October 31, 1997. The fees and expenses for Class C shares set forth
in the table are based on the estimated average net assets of Class C shares of
the Funds for the period August 4, 1997 (date sales commenced) to October 31,
1997. The rules of the SEC require that the maximum sales charge be reflected in
the table, even though certain investors may qualify for reduced sales charges.
See "How to Purchase Shares."

<TABLE>
<CAPTION>
AGGRESSIVE INCOME
GROWTH FUND GROWTH FUND FUND
-------------------------------- -------------------------------- --------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum sales load
imposed on purchase
of shares
(as a % of offering
price)............... 4.75% None None 4.75% None None 4.75%
Maximum sales load on
reinvested dividends
and distributions.... None None None None None None None
Deferred sales load (as
a % of original
purchase price or
redemption proceeds,
whichever is
lower)............... None* 5.00% 1.00% None* 5.00% 1.00% None*
Redemption fee......... None None None None None None None
Exchange fee........... None None None None None None None
Annual Fund Operating
Expenses (as a % of
average net assets)
Management fees........ 0.87% 0.87% 0.87% 0.85% 0.85% 0.85% 0.09%**
Rule 12b-1 distribution
plan payments........ 0.50% 1.00% 1.00% 0.50% 1.00% 1.00% 0.50%
Other expenses......... 0.38% 0.43% 0.43% 0.41% 0.44% 0.44% 0.66%
----- ----- ----- ----- ----- ----- -----
Total fund
operating
expenses...... 1.75% 2.30% 2.30% 1.76% 2.29% 2.29% 1.25%**
===== ===== ===== ===== ===== ===== =====

INCOME FUND
---------------------
CLASS B CLASS C
-------- --------
<S> <C> <C>
Shareholder Transaction
Expenses
Maximum sales load
imposed on purchase
of shares
(as a % of offering
price)............... None None
Maximum sales load on
reinvested dividends
and distributions.... None None
Deferred sales load (as
a % of original
purchase price or
redemption proceeds,
whichever is
lower)............... 5.00% 1.00%
Redemption fee......... None None
Exchange fee........... None None
Annual Fund Operating
Expenses (as a % of
average net assets)
Management fees........ 0.09%** 0.09%**
Rule 12b-1 distribution
plan payments........ 1.00% 1.00%
Other expenses......... 0.67% 0.67%
----- -----
Total fund
operating
expenses...... 1.76%** 1.76%**
===== =====
</TABLE>

- ---------------

* Purchases of shares in an amount of $1 million or more are not subject to
an initial sales charge. HOWEVER, A CONTINGENT DEFERRED SALES CHARGE OF 1%
APPLIES TO CERTAIN REDEMPTIONS MADE WITHIN 18 MONTHS FROM THE DATE SUCH
SHARES WERE PURCHASED. See the Investor's Guide, under the caption "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."

** After fee waivers. If management fees had not been waived for INCOME FUND,
management fees would have been 0.70%, and total fund operating expenses
would have been 1.86%, 2.37% and 2.37% (annualized) for the Class A shares,
Class B shares and Class C shares, respectively.

EXAMPLES. An investor in each of the Funds would pay the following expenses on
a $1,000 investment in Class A shares of the Funds, assuming (1) a 5% annual
return and (2) redemption at the end of each time period:

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH INCOME
FUND FUND FUND
---------- ------ ------
<S> <C> <C> <C>
1 year........................................ $ 64 $ 65 $ 60
3 years....................................... $100 $100 $ 85
5 years....................................... $138 $138 $113
10 years...................................... $244 $245 $191
</TABLE>

THE EXAMPLES ABOVE ASSUME PAYMENT OF A SALES CHARGE AT THE TIME OF PURCHASE;
ACTUAL EXPENSES MAY VARY FOR PURCHASES OF $1 MILLION OR MORE WHICH ARE MADE AT
NET ASSET VALUE AND SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE FOR 18 MONTHS
FOLLOWING THE DATE SUCH SHARES WERE PURCHASED.

4
<PAGE> 5

An investor in each of the Funds would pay the following expenses on a $1,000
investment in Class B shares of the Funds, assuming (1) a 5% annual return and
(2) redemption at the end of each time period:

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH INCOME
FUND FUND FUND
---------- ------ ------
<S> <C> <C> <C>
1 year................................................. $ 73 $ 73 $ 68
3 years................................................ $102 $102 $ 85
5 years................................................ $143 $143 $115
10 years............................................... $250* $249* $194*
</TABLE>

An investor in each of the Funds would pay the following expenses on the same
$1,000 investment in Class B shares, assuming no redemption at the end of each
time period:

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH INCOME
FUND FUND FUND
---------- ------ ------
<S> <C> <C> <C>
1 year................................................. $ 23 $ 23 $ 18
3 years................................................ $ 72 $ 72 $ 55
5 years................................................ $123 $123 $ 95
10 years............................................... $250* $249* $194*
</TABLE>

- ---------------
* Reflects the conversion to Class A shares eight years following the end of the
calendar month in which a purchase was made; therefore years nine and ten
reflect Class A expenses.

An investor would pay the following expenses on a $1,000 investment in Class C
shares of the Funds, assuming (1) a 5% annual return and (2) redemption at the
end of each time period:

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH INCOME
FUND FUND FUND
---------- ------ ------
<S> <C> <C> <C>
1 year.................................................... $33 $33 $28
3 years................................................... $72 $72 $55
</TABLE>

An investor would pay the following expenses on the same $1,000 investment in
Class C shares of the Funds, assuming no redemption at the end of each time
period:

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH INCOME
FUND FUND FUND
---------- ------ ------
<S> <C> <C> <C>
1 year.................................................... $23 $23 $18
3 years................................................... $72 $72 $55
</TABLE>

As a result of 12b-1 fees, a long-term shareholder may pay more than the
economic equivalent of the maximum front-end sales charges permitted by rules of
the National Association of Securities Dealers, Inc. Given the maximum front-end
sales charge applicable to Class A shares and the Rule 12b-1 fees applicable to
Class A shares, Class B shares and Class C shares, it is estimated that it would
require a substantial number of years to exceed the maximum permissible
front-end sales charges.

THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIVE OF A PARTICULAR
FUND'S ACTUAL OR FUTURE EXPENSES, WHICH MAY BE GREATER OR LESS THAN THOSE SHOWN.
In addition, while the examples assume a 5% annual return, a Fund's actual
performance will vary and may result in an actual return that is greater or less
than 5%. The examples assume reinvestment of all dividends and distributions and
that the percentage amounts for total fund operating expenses remain the same
for each year.

5
<PAGE> 6

- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

Shown below are per share income and capital changes for a Class A share and
Class B share of each of the Funds outstanding during each of the years in the
three-year period ended October 31, 1997 and the period September 15, 1994 (date
operations commenced) through October 31, 1994 and for a Class C share of each
of the Funds outstanding during the period August 4, 1997 (date sales commenced)
through October 31, 1997. The information has been audited by KPMG Peat Marwick
LLP, independent auditors, whose unqualified reports on the Funds' financial
statements and the related notes appear in the Statement of Additional
Information.

AIM GLOBAL AGGRESSIVE GROWTH FUND

<TABLE>
<CAPTION>
PERIOD
SEPTEMBER 15,
YEAR ENDED OCTOBER 31, THROUGH
------------------------------------ OCTOBER 31,
1997 1996 1995 1994
---------- -------- -------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARE
Net asset value, beginning of period................ $ 15.76 $ 13.09 $ 10.22 $ 10.00
Income from investment operations:
Net investment income (loss)...................... (0.15)(a) (0.09)(a) (0.09)(a) --
Net gains (losses) on securities (both realized
and unrealized)................................. 1.67 2.81 2.96 0.22
---------- -------- -------- --------
Total from investment operations.................. 1.52 2.72 2.87 0.22
---------- -------- -------- --------
Less distributions:
Distributions from net realized gains............. -- (0.05) -- --
---------- -------- -------- --------
Net asset value, end of period...................... $ 17.28 $ 15.76 $ 13.09 $ 10.22
========== ======== ======== ========
Total return(b)..................................... 9.65% 20.83% 28.08% 2.20%
========== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted).......... $1,242,505 $919,319 $186,029 $ 18,410
========== ======== ======== ========
Ratio of expenses to average net assets........... 1.75%(c)(d) 1.83% 2.11% 2.02%(e)(f)
========== ======== ======== ========
Ratio of net investment income (loss) to average
net assets...................................... (0.88)%(c) (0.62)% (0.68)% 0.27%(f)(g)
========== ======== ======== ========
Portfolio turnover rate........................... 57% 44% 64% 2%
========== ======== ======== ========
Average brokerage commission rate paid(h)......... $ 0.0131 $ 0.0155 N/A N/A
========== ======== ======== ========
</TABLE>

- ---------------

(a) Calculated using average shares outstanding.

(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.

(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.

(e) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements is
4.03% (annualized).

(f) Annualized.

(g) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements is (1.74)% (annualized).

(h) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

6
<PAGE> 7

<TABLE>
<CAPTION>
PERIOD
SEPTEMBER 15,
YEAR ENDED OCTOBER 31, THROUGH
------------------------------------ OCTOBER 31,
1997 1996 1995 1994
---------- -------- -------- -------------
<S> <C> <C> <C> <C>
CLASS B SHARE
Net asset value, beginning of period................ $ 15.58 $ 13.02 $ 10.21 $10.00
Income from investment operations:
Net investment income (loss)...................... (0.24)(a) (0.17)(a) (0.14)(a) --
---------- -------- -------- ------
Net gains (losses) on securities (both realized
and unrealized)................................. 1.66 2.78 2.95 0.21
---------- -------- -------- ------
Total from investment operations.................. 1.42 2.61 2.81 0.21
---------- -------- -------- ------
Less distributions:
Distributions from net realized gains............. -- (0.05) -- --
---------- -------- -------- ------
Net asset value, end of period...................... $ 17.00 $ 15.58 $ 13.02 $10.21
========== ======== ======== ======
Total return(b)..................................... 9.11% 20.09% 27.52% 2.10%
========== ======== ======== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted).......... $1,241,999 $807,215 $118,199 $6,201
========== ======== ======== ======
Ratio of expenses to average net assets........... 2.30%(c)(d) 2.37% 2.62% 2.54%(e)(f)
========== ======== ======== ======
Ratio of net investment income (loss) to average
net assets...................................... (1.44)%(c) (1.16)% (1.19)% (0.25)%(f)(g)
========== ======== ======== ======
Portfolio turnover rate........................... 57% 44% 64% 2%
========== ======== ======== ======
Average brokerage commission rate paid(h)......... $ 0.0131 $ 0.0155 N/A N/A
========== ======== ======== ======
</TABLE>

- ---------------

(a) Calculated using average shares outstanding.

(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.

(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average assets would have been the same.

(e) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements is
4.43% (annualized).

(f) Annualized.

(g) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements is (2.14)% (annualized).

7
<PAGE> 8

<TABLE>
<CAPTION>
PERIOD
AUGUST 4,
THROUGH
OCTOBER 31,
1997
-----------
<S> <C>
CLASS C SHARE
Net asset value, beginning of period........................ $ 18.39
Income from investment operations:
Net investment income (loss).............................. (0.04)(a)
Net gains (losses) on securities (both realized and
unrealized)............................................. (1.35)
-------
Total from investment operations.......................... (1.39)
-------
Less distributions:
Distributions from net realized gains..................... --
-------
Net asset value, end of period.............................. $ 17.00
=======
Total return(b)............................................. (7.56)%
=======
Ratios/supplemental data:
Net assets, end of period (000s omitted).................. $ 4,676
=======
Ratio of expenses to average net assets................... 2.36%(c)(d)
=======
Ratio of net investment income (loss) to average net
assets.................................................. (1.50)%(c)
=======
Portfolio turnover rate................................... 57%
=======
Average brokerage commission rate paid(e)................. $0.0131
=======
</TABLE>

- ---------------

(a) Calculated using average shares outstanding.

(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.

(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average assets would have been the same.

(e) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

8
<PAGE> 9

AIM GLOBAL GROWTH FUND

<TABLE>
<CAPTION>
PERIOD
SEPTEMBER 15,
YEAR ENDED OCTOBER 31, THROUGH
---------------------------------- OCTOBER 31,
1997 1996 1995 1994
--------- -------- -------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARE
Net asset value, beginning of period................ $ 14.20 $ 12.32 $ 10.23 $10.00
Income from investment operations:
Net investment income (loss)...................... (0.04) (0.01) (0.02) --
Net gains (losses) on securities (both realized
and unrealized)................................ 2.49 2.11 2.11 0.23
-------- -------- -------- ------
Total from investment operations.................. 2.45 2.10 2.09 0.23
-------- -------- -------- ------
Less distributions:
Dividends from net investment income.............. -- -- (0.004) --
Distributions from net realized gains............. -- (0.22) -- --
-------- -------- -------- ------
Total distributions............................... -- (0.22) (0.004) --
-------- -------- -------- ------
Net asset value, end of period...................... $ 16.65 $ 14.20 $ 12.32 $10.23
======== ======== ======== ======
Total return(a)..................................... 17.25% 17.26% 20.48% 2.30%
======== ======== ======== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted).......... $178,917 $114,971 $ 23,754 $3,093
======== ======== ======== ======
Ratio of expenses to average net assets(b)........ 1.76%(c)(d) 1.93% 2.12% 1.95%(e)
======== ======== ======== ======
Ratio of net investment income (loss) to average
net assets(f).................................. (0.30)%(c) (0.13)% (0.28)% 0.10%(e)
======== ======== ======== ======
Portfolio turnover rate........................... 96% 82% 79% 6%
======== ======== ======== ======
Average brokerage commission rate(g).............. $ 0.0239 $ 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/or 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 based on average net assets of $155,717,515.

(d)Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.

(e)Annualized.

(f)After fee waivers and/or 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)The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

9
<PAGE> 10

<TABLE>
<CAPTION>
PERIOD
SEPTEMBER 15,
YEAR ENDED OCTOBER 31, THROUGH
-------------------------------------- OCTOBER 31,
1997 1996 1995 1994
------------- -------- -------- -------------
<S> <C> <C> <C> <C>
CLASS B SHARE
Net asset value, beginning of period............ $ 14.05 $ 12.26 $ 10.22 $10.00
Income from investment operations:
Net investment income (loss).................. (0.11) (0.05) (0.04) --
Net gains (losses) on securities (both
realized and unrealized)................... 2.45 2.06 2.08 0.22
-------- -------- -------- ------
Total from investment operations.............. 2.34 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.................. $ 16.39 $ 14.05 $ 12.26 $10.22
======== ======== ======== ======
Total return(a)................................. 16.65% 16.60% 19.96% 2.20%
======== ======== ======== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted)...... $224,225 $121,848 $ 17,157 $1,277
======== ======== ======== ======
Ratio of expenses to average net assets(b).... 2.29%(c)(d) 2.48% 2.64% 2.51%(e)
======== ======== ======== ======
Ratio of net investment income (loss) to
average net assets(f)...................... (0.83)%(c) (0.69)% (0.79)% (0.47)%(e)
======== ======== ======== ======
Portfolio turnover rate....................... 96% 82% 79% 6%
======== ======== ======== ======
Average brokerage commission rate(g).......... $ 0.0239 $ 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/or 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.

(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/or 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) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

10
<PAGE> 11

<TABLE>
<CAPTION>
PERIOD
AUGUST 4,
THROUGH
OCTOBER 31, 1997
----------------
<S> <C>
CLASS C SHARE
Net asset value, beginning of period........................ $ 17.39
Income from investment operations:
Net investment income (loss).............................. (0.03)
Net gains (losses) on securities (both realized and
unrealized)............................................ (0.97)
-------
Total from investment operations.......................... (1.00)
-------
Net asset value, end of period.............................. $ 16.39
=======
Total return(a)............................................. (5.75)%
=======
Ratios/supplement data:
Net assets, end of period (000s omitted).................. $ 1,100
=======
Ratio of expenses to average net assets(b)................ 2.29%(c)
=======
Ratio of net investment income (loss) to average net
assets(b).............................................. (0.83)%
=======
Portfolio turnover rate................................... 96%
=======
Average brokerage commission rate(d)...................... $0.0239
=======
</TABLE>

- ---------------

(a) Does not deduct sales charges and periods for less than one year, total
returns are not annualized.

(b) Ratios are annualized and based on average net assets of $628,292.

(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.

(d) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

11
<PAGE> 12

AIM GLOBAL INCOME FUND

<TABLE>
<CAPTION>
PERIOD
SEPTEMBER 15,
YEAR ENDED OCTOBER 31, THROUGH
-------------------------------- OCTOBER 31,
1997 1996 1995 1994
--------- ------- ------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARE
Net asset value, beginning of period..................... $ 10.85 $ 10.74 $ 10.02 $10.00
Income from investment operations:
Net investment income.................................. 0.72 0.79(a) 0.79 0.08
Net gains (losses) on securities (both realized and
unrealized)......................................... 0.21 0.25 0.75 0.01
------- ------- ------- ------
Total from investment operations....................... 0.93 1.04 1.54 0.09
------- ------- ------- ------
Less distributions:
Dividends from investment income....................... (0.72) (0.81) (0.82) (0.07)
Distributions from net realized capital gains.......... (0.13) (0.12) -- --
------- ------- ------- ------
Total distributions.................................... (0.85) (0.93) (0.82) (0.07)
------- ------- ------- ------
Net asset value, end of period........................... $ 10.93 $ 10.85 $ 10.74 $10.02
======= ======= ======= ======
Total return(b).......................................... 9.05% 10.22% 16.07% 0.93%
======= ======= ======= ======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)...................................... $30,924 $21,926 $10,004 $2,661
======= ======= ======= ======
Ratio of expenses to average net assets(g)............. 1.25%(d)(e) 1.25% 1.25% 1.25%(f)
======= ======= ======= ======
Ratio of net investment income to average net
assets(d)........................................... 6.54%(d) 7.27% 7.38% 6.01%(f)
======= ======= ======= ======
Portfolio turnover rate................................ 61% 83% 128% 6%
======= ======= ======= ======
</TABLE>

- ---------------

(a) Calculated using average shares outstanding.

(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.

(c) After fee waivers and/or expense reimbursements. The ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.86%, 2.02%, 3.03% and 5.61% (annualized) for the periods 1997-1994,
respectively.

(d) Ratios are based on average net assets of $27,582,444.

(e) Ratios include expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been 1.24%.

(f) Annualized.

(g) After fee waivers and/or expenses reimbursements. The ratios of net
investment income to average net assets prior to fee waivers and/or expense
reimbursements were 5.93%, 6.51%, 5.59% and 1.65% (annualized) for the
periods 1997-1994, respectively.

12
<PAGE> 13

<TABLE>
<CAPTION>
PERIOD
SEPTEMBER 15,
YEAR ENDED OCTOBER 31, THROUGH
-------------------------------------- OCTOBER 31,
1997 1996 1995 1994
------------- -------- -------- -------------
<S> <C> <C> <C> <C>
CLASS B SHARE
Net asset value, beginning of period............ $ 10.84 $ 10.73 $ 10.01 $10.00
Income from investment operations:
Net investment income......................... 0.67 0.74(a) 0.74 0.07
Net gains (losses) on securities (both
realized and unrealized)................... 0.21 0.24 0.75 0.01
-------- -------- -------- ------
Total from investment operations.............. 0.88 0.98 1.49 0.08
-------- -------- -------- ------
Less distributions:
Dividends from investment income.............. (0.67) (0.75) (0.77) (0.07)
-------- -------- -------- ------
Distributions from net realized gains......... (0.13) (0.12) -- --
-------- -------- -------- ------
Total distributions........................... (0.80) (0.87) (0.77) (0.07)
-------- -------- -------- ------
Net asset value, end of period.................. $ 10.92 $ 10.84 $ 10.73 $10.01
======== ======== ======== ======
Total return(b)................................. 8.48% 9.66% 15.56% 0.79%
======== ======== ======== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted)...... $ 25,121 $ 16,787 $ 4,207 $ 362
======== ======== ======== ======
Ratio of expenses to average net assets(c).... 1.76%(d)(e) 1.75% 1.74% 1.73%(f)
======== ======== ======== ======
Ratio of net investment income to
average net assets(g)...................... 6.03%(d) 6.77% 6.88% 3.59%(f)
======== ======== ======== ======
Portfolio turnover rate....................... 61% 83% 128% 6%
======== ======== ======== ======
</TABLE>

- ---------------

(a) Calculated using average shares outstanding.

(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.

(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
2.37%, 2.53%, 3.57% and 22.09% (annualized) for the periods 1997-1994,
respectively.

(d) Ratios are based on average net assets of $21,915,481.

(e) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have remained the same.

(f) Annualized.

(g) After fee waivers and/or expense reimbursements. The ratios of net
investment income (loss) to average net assets prior to fee waivers and/or
expense reimbursements were 5.42%, 6.00% and 5.05% and (16.77)% (annualized)
for the periods 1997-1994, respectively.

13
<PAGE> 14

<TABLE>
<CAPTION>
PERIOD
AUGUST 4,
THROUGH
OCTOBER 31,
1997
-----------
<S> <C>
CLASS C SHARE
Net asset value, beginning of period........................ $ 10.76
Income from investment operations:
Net investment income..................................... 0.15(a)
Net gains (losses) on securities (both realized and
unrealized)............................................ 0.17
-------
Total from investment operations.......................... 0.32
-------
Less distributions:
Dividends from net investment income...................... (0.13)
Distributions from net realized gains..................... (0.03)
Total distributions....................................... (0.16)
Net asset value, end of period.............................. $ 10.92
=======
Total return(b)............................................. 2.99%
=======
Ratios/supplemental data:
Net assets, end of period (000s omitted).................. $ 242
=======
Ratio of expenses to average net assets(c)................ 1.76%(d)(e)
=======
Ratio of net investment income to average net
assets(f).............................................. 6.03%(c)(d)
=======
Portfolio turnover rate................................... 61%
=======
</TABLE>

- ---------------

(a) Calculated using average shares outstanding.

(b) Does not deduct sales charges and periods for less than one year, total
returns are not annualized.

(c) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
2.37% (annualized).

(d) Ratios are annualized and based on average net assets of $98,262.

(e) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have remained the same.

(f) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements was 5.42% (annualized).

14
<PAGE> 15

- --------------------------------------------------------------------------------

PERFORMANCE

The performance of each Fund may be quoted in advertising in terms of total
return, and the performance of INCOME FUND may also be quoted in terms of yield.
All advertisements of a Fund will disclose the maximum sales charge (including
deferred sales charge) to which investments in shares of the Funds may be
subject. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Funds. Further information regarding the Funds'
performance is contained in the Funds' annual reports to shareholders, which are
available upon request and without charge.

Standardized total return for Class A shares of a Fund reflects the deduction
of the maximum initial sales charge at the time of purchase. Standardized total
return for Class B shares of a Fund reflects the deduction of the maximum
applicable contingent deferred sales charge on a redemption of shares held for
the period. Standardized total return for Class C shares of a Fund reflects the
deduction of a 1% contingent deferred sales charge, if applicable, on a
redemption of shares held for the period.

Each Fund's total return shows its overall change in value, including changes
in share price assuming that all the Fund's dividends and capital gain
distributions are reinvested and that all charges and expenses are deducted. A
cumulative total return reflects a Fund's performance over a stated period of
time. An average annual total return reflects the hypothetical compounded annual
rate of return that would have produced the same cumulative total return if the
Fund's performance had been constant over the entire period. BECAUSE AVERAGE
ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN A FUND'S RETURN, INVESTORS SHOULD
RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To
illustrate the components of overall performance, a Fund may separate its
cumulative and average annual returns into income results and capital gains or
losses.

Yield is computed in accordance with a standardized formula described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, the
yield information may not provide a basis for comparison with investments which
pay a fixed rate of interest for a stated period of time. Yield reflects
investment income net of expenses over the relevant period attributable to a
share of the Fund, expressed as an annualized percentage of the maximum offering
price per share of the Fund. It is a function of the type and quality of a
Fund's investments, its maturity and its operating expense ratio.

From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such a practice will
have the effect of increasing the Fund's yield and total return.

The performance of each Fund will vary from time to time, and past results are
not necessarily representative of future results. Each Fund's performance is a
function of its portfolio management in selecting the type and quality of
portfolio securities and is affected by operating expenses of the Fund as well
as by general market conditions. A shareholder's investment in any of the Funds
is not insured or guaranteed. These factors should be carefully considered by
the investor before making an investment in a Fund.

- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVES AND POLICIES

Each of the Funds has its own investment objective and investment program as
discussed herein. The Funds' investment objective(s) are fundamental policies
that cannot be changed without shareholder approval. There can, of course, be no
assurance that any Fund will in fact achieve its objective(s). The Board of
Directors of the Company reserves the right to change any of the investment
policies, strategies or practices of any of the Funds, as described in this
Prospectus and in the Statement of Additional Information, without shareholder
approval, except in those instances where shareholder approval is expressly
required.

AIM GLOBAL AGGRESSIVE GROWTH FUND. The investment objective of AGGRESSIVE
GROWTH FUND is to provide above-average long-term growth of capital
appreciation. The Fund seeks to achieve its objective by investing in a
portfolio of global equity securities including securities of selected companies
with relatively small market capitalization.

The AGGRESSIVE GROWTH FUND will invest in companies throughout the world which
AIM believes possess exceptional growth potential that should enhance such
companies' prospects for future growth in earnings. As a result of this policy,
the market prices of many of the securities purchased and held by AGGRESSIVE
GROWTH FUND may fluctuate widely. Any income received from securities held by
the Fund will be incidental, and an investor should not consider a purchase of
shares of AGGRESSIVE GROWTH FUND as equivalent to a complete investment program.
AGGRESSIVE GROWTH FUND will emphasize investment in small to medium-sized
companies, but its strategy does not preclude investment in large, seasoned
companies which in AIM's judgment possess superior potential returns similar to
companies with formative growth profiles. The Fund will also invest in
established smaller companies (under $1 billion in market capitalization) which
in AIM's judgment offer exceptional value based upon substantially above average
earnings growth potential relative to market value. Investors should realize
that equity securities of small to medium-sized companies may involve greater
risk than is associated with investing in more established companies. Small to
medium-sized companies often have limited product and market diversification,
fewer financial and managerial resources or may be dependent on a few key
managers. Also, because smaller companies normally have fewer shares outstanding
than larger companies and trade less frequently, it may be more difficult for
the Fund to buy and sell shares without an unfavorable impact on prevailing
market prices. Some of the companies in

15
<PAGE> 16

which the Fund may invest may distribute, sell or produce products which have
recently been brought to market. Any of the foregoing may change suddenly and
have an immediate impact on the value of the Fund's investments. Furthermore,
whenever the securities markets have experienced rapid price changes due to
national economic trends, secondary growth securities have historically been
subject to exaggerated price changes.

AIM GLOBAL GROWTH FUND. The investment objective of GROWTH FUND is to provide
long-term growth of capital. The Fund seeks to achieve its objective by
investing in a portfolio of global equity securities of selected companies that
are considered by AIM to have strong earnings momentum. Current income will not
be an important criterion of investment selection, and any such income should be
considered incidental.

In managing both AGGRESSIVE GROWTH FUND and GROWTH FUND, AIM seeks to apply to
each of the diversified portfolios of equity securities the same investment
strategy which it applies to several of its other managed portfolios which have
similar investment objectives but which invest primarily in United States
equities markets. Each of AGGRESSIVE GROWTH FUND and GROWTH FUND will utilize to
the extent practicable a fully managed investment policy providing for the
selection of securities which meet certain quantitative standards determined by
AIM. AIM reviews carefully the earnings history and prospects for growth of each
company considered for investment by each of the two Funds. It is anticipated
that common stocks will be the principal form of investment of AGGRESSIVE GROWTH
FUND and GROWTH FUND. The portfolio of each of the two Funds is primarily
comprised of securities of two basic categories of companies: (a) "core"
companies, which AIM considers to have experienced above-average and consistent
long-term growth in earnings and to have excellent prospects for outstanding
future growth, and (b) "earnings acceleration" companies which AIM believes are
currently enjoying a dramatic increase in earnings.

Under normal market conditions, AGGRESSIVE GROWTH FUND and GROWTH FUND will
invest primarily in marketable equity securities (including common and preferred
stock and other securities having the characteristics of stock (such as an
equity or ownership interest in a company)) of companies which are listed on a
recognized securities exchange or traded in an over-the-counter market. Each of
these Funds may satisfy the foregoing requirement in part by investing in the
securities of issuers which are in the form of American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs"), or other securities
representing underlying securities of foreign issuers. Each of AGGRESSIVE GROWTH
FUND and GROWTH FUND may invest up to 20% of its total assets in securities
convertible into or exchangeable for equity securities of foreign and domestic
issuers which (except in the case of ADRs, EDRs and other securities
representing underlying securities of foreign issuers) are listed on a
recognized securities exchange or traded in an over-the-counter market.

If a particular foreign company meets the quantitative standards determined by
AIM, its securities may be acquired by a Fund regardless of the location of the
company or the percentage of the Fund's investments in the company's country or
region. However, AIM will also consider other factors in making investment
decisions for these Funds, including such factors as the prospects for relative
economic growth among countries or regions, economic and political conditions,
currency exchange fluctuations, tax considerations and the liquidity of a
particular security. Under normal market conditions, AGGRESSIVE GROWTH FUND and
GROWTH FUND will maintain at least 20% of their respective total assets in U.S.
dollar denominated securities.

AIM recognizes that often there is less public information about foreign
companies than is available in reports supplied by domestic companies, that
foreign companies are not subject to uniform accounting and financial reporting
standards, and that there may be greater delays experienced by a Fund in
receiving financial information supplied by foreign companies than comparable
information supplied by domestic companies. In addition, the value of a Fund's
investments that are denominated in a foreign currency may be affected by
changes in currency exchange rates. For these and other reasons, AIM from time
to time may encounter greater difficulty applying its disciplined stock
selection strategy to an international equity investment portfolio than to a
portfolio of domestic equity securities. See "Risk Factors -- Foreign
Securities."

AGGRESSIVE GROWTH FUND and GROWTH FUND each will normally invest at least 65%
of their respective total assets in marketable equity securities of foreign and
domestic issuers, including common and preferred stock.

AGGRESSIVE GROWTH FUND and GROWTH FUND will each emphasize investment in
companies in developed countries such as the United States, the countries of
Western Europe and certain countries in the Pacific Basin (such as Japan, Hong
Kong and Australia). The Funds may also invest in the securities of companies
located in developing countries (such as Turkey, Poland and Mexico) in various
regions of the world. A "developing country" is a country in the initial stages
of its industrial cycle. Under normal market conditions, the assets of each Fund
will be invested in the securities of companies located in at least four
different countries, including the United States.

Investment in the equity markets of developing countries involves exposure to
securities exchanges that may have substantially less trading volume and greater
price volatility, economic structures that are less diverse and mature, and
political systems that may be less stable than the equity markets of developed
countries. See "Risk Factors -- Emerging Markets and Developing Countries."

AIM GLOBAL INCOME FUND. INCOME FUND'S primary investment objective is to
provide a high level of current income. As a secondary objective the Fund seeks
preservation of principal and capital appreciation. The Fund seeks to achieve
its objectives by investing in a portfolio of U.S. and foreign government and
corporate debt securities. INCOME FUND intends to invest in (i) foreign
government securities, (ii) securities issued by supranational organizations
(such as the World Bank), (iii) foreign and domestic

16
<PAGE> 17
corporate debt securities, including lower-rated or unrated U.S.
dollar-denominated high yield corporate debt securities, commonly known as
"junk bonds" and (iv) U.S. Government securities, including U.S. Government
Agency mortgage-backed securities.

INCOME FUND is a non-diversified portfolio, which means that with respect to
50% of its assets, it is permitted to invest more than 5% of its assets in the
securities of any one issuer. INCOME FUND will, however, invest no more than 5%
of its total assets in the securities of any one corporate issuer, and will
invest no more than 25% of its total assets in securities of any one foreign
government or supranational issuer. INCOME FUND will generally invest in the
securities of issuers located in at least four countries, including the United
States.

INCOME FUND may invest in securities issued by governments and companies
throughout the world, but expects that it will invest primarily in securities of
issuers in industrialized countries with established securities markets, such as
Western European countries, Canada, Japan, Australia, New Zealand and the United
States. INCOME FUND may, however, invest up to 20% of its total assets in
securities of issuers in developing countries such as Turkey, Poland and Mexico.

Although INCOME FUND will invest at least 65% of its total assets in
non-convertible debt securities of foreign and domestic issuers, it may invest
up to 10% of its total assets in common stocks, preferred stocks and similar
equity securities of foreign and domestic issuers. INCOME FUND may also invest
up to 10% of its total assets in convertible debt securities of foreign and
domestic issuers.

INCOME FUND may invest less than 35% of its total assets in high yield debt
securities (i.e., "junk bonds"). Such securities, at the time of purchase, are
rated below investment grade or are determined by AIM to be of non-investment
grade quality. (For a description of the various rating categories of corporate
debt securities in which INCOME FUND may invest, see Appendix A to this
Prospectus.)

During the fiscal year ended October 31, 1997, the percentage of INCOME FUND'S
average annual assets, calculated on a dollar weighted basis, which was invested
in securities within each rating category of Moody's (as described in Appendix
A), and in unrated securities determined by AIM to be of comparable quality, was
as follows:

<TABLE>
<CAPTION>
INCOME FUND
-----------
<S> <C>
Aaa......................................................... 31.94%
Aa.......................................................... 12.86%
A........................................................... 14.12%
Baa......................................................... 10.91%
Ba.......................................................... 6.75%
B........................................................... 18.28%
Caa......................................................... 0.54%
Ca.......................................................... 0.00%
C........................................................... 0.00%
D........................................................... 0.00%
Unrated..................................................... 4.60%
-------
Total Average Annual Assets....................... 100.0%
</TABLE>

Securities issued by the U.S. Treasury (notes, bonds and bills) are supported
by the full faith and credit of the United States government, while certain
securities issued or guaranteed by agencies or instrumentalities of the U.S.
Government may not be supported by the full faith and credit of the United
States. These agency securities include both obligations supported by the right
of the issuer to borrow from the U.S. Treasury (such as obligations of the
Federal Home Loan Bank) and obligations supported by the credit of the agency or
instrumentality (such as Federal National Mortgage Association bonds.)
Similarly, obligations of foreign governments include obligations issued by
national, provincial, state or other governments that have taxing authority over
their local populations, or by agencies of such governments that may be
supported by the full faith and credit of the governmental entity, or solely by
the credit of such agency.

Supranational organizations include organizations formed and supported by
governmental entities to promote economic growth and development, or
international banking institutions, such as the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the Inter-American Development Bank.
Supranational organizations are generally formed and supported by the capital
contributions of governmental entities and, in their lending and other
activities, carry out the particular purposes designated by their member
governmental entities.

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<PAGE> 18

The value of the debt securities in which INCOME FUND invests will change in
response to interest rate changes and other factors. During periods of rising
interest rates, the values of outstanding long-term debt securities will
generally decline, and during periods of falling interest rates, the values of
such securities will generally rise. Such changes will affect the net asset
value per share of INCOME FUND. Longer-term fixed income securities tend to be
subject to greater fluctuations in price than shorter-term securities.

For a discussion of certain risks associated with investments in high yield
securities (i.e., "junk bonds"), foreign securities and non-diversified funds,
see "Risk Factors" in this Prospectus. For a further discussion of the intended
investment strategies of AGGRESSIVE GROWTH FUND, GROWTH FUND and INCOME FUND,
see "Hedging Strategies" and "Other Investment Techniques" in this Prospectus.

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HEDGING STRATEGIES

Each of the Funds may, at such times as AIM deems appropriate and consistent
with the investment objective of the Fund, write (sell) covered put or call
options on its portfolio securities. Each of the Funds may also purchase and
sell (i) options on domestic and foreign securities and currencies, (ii) stock
index options, (iii) stock, currency and interest rate futures, (iv) options on
stock, currency, stock index and interest rate futures and (v) foreign forward
currency exchange contracts. The purpose of such transactions is to hedge
against changes in the market value of a Fund's portfolio securities caused by
fluctuating interest rates, fluctuating currency exchange rates and changing
market conditions, and to close out or offset existing positions in such options
or futures contracts as described below. None of the Funds will engage in such
transactions for speculative purposes.

OPTIONS. Each Fund may purchase options issued by the Options Clearing
Corporation. Such options give a Fund the right for a fixed period of time to
sell (in the case of purchase of a put option) or to buy (in the case of
purchase of a call option) the number of units of the underlying security or
obligation covered by the option at a fixed or determinable exercise price.
Buying a put option hedges against the risk of a market decline. Buying a call
option hedges against a market advance. Prior to its expiration, a put or call
option may be sold in a closing sale transaction. Gain or loss from such a sale
will depend on whether the amount received is more or less than the premium paid
for the option plus the related transaction costs.

Each Fund also may write (sell) put or call options, but only if such options
are covered and remain covered as long as the Fund is obligated as a writer of
the option (seller). A call option is "covered" if a Fund owns the underlying
security covered by the call. A put option is "covered" if a Fund segregates
with its custodian liquid assets with a value equal to the exercise price of the
put option. If a "covered" call or put option expires unexercised, the writer
realizes a gain in the amount of the premium received. If the covered call
option is exercised, the writer realizes either a gain or loss from the sale or
purchase of the underlying security with the proceeds to the writer being
increased by the amount of the premium. If the covered put option is exercised,
the writer's cost of purchasing the underlying security is reduced by the amount
of the premium received from the initial sale of the put option. Prior to its
expiration, a put or call option may be closed out by means of a purchase of an
identical option. Any gain or loss from such transaction will depend on whether
the amount paid is more or less than the premium received for the option plus
related transaction costs.

Each Fund may also purchase and write options in combination with each other
to adjust the risk and return characteristics of certain portfolio security
positions. This technique is commonly referred to as a "collar."

Options are subject to certain risks, including the risk of imperfect
correlation between the option and a Fund's other investments and the risk that
there might not be a liquid secondary market for the option when the Fund seeks
to hedge against adverse market movements. In general, options whose strike
prices are close to their underlying securities' current values will have the
highest trading value, while options whose strike prices are further away may be
less liquid. The liquidity of options may also be affected if options exchanges
impose trading halts, particularly when markets are volatile.

None of the Funds will write options if, immediately after such sale, the
aggregate value of the securities or obligations underlying the outstanding
options exceeds 25% of the Fund's total assets. None of the Funds will purchase
put options (including options on securities indices and futures contracts) if,
at the time of investment, the aggregate premiums paid for such options will
exceed 5% of the Fund's total assets.

FUTURES AND FORWARD CONTRACTS. Since substantially all of the securities held
by each Fund may be denominated in foreign currencies, the value of their
respective portfolios will be affected by changes in exchange rates between
currencies (including the U.S. dollar), as well as by changes in the market
value of the securities themselves. Each Fund may enter into interest rate,
exchange rate and currency futures contracts and related options, or it may
purchase or sell stock index futures contracts and related options in order to
hedge the value of its portfolio against changes in market conditions or in
exchange rates between currencies (including the U.S. dollar). Futures contracts
obligate the seller to deliver a specific type of security called for in the
contract, at a specified future time and for a specified price. Futures
contracts are traded on U.S. and foreign exchanges and generally contain
standardized strike prices and expiration dates. Certain futures contracts may
be satisfied by actual delivery of the securities or, more typically, by
entering into an offsetting transaction. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract. In addition to purchasing or selling futures contracts on
currencies and specific securities, interest rates and exchange rates, each Fund
may purchase or sell stock index futures contracts. A stock index futures
contract is an agreement to take or make delivery of an amount of cash based on
the difference between the value of a stock index at the beginning

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<PAGE> 19

and at the end of the contract period. No more than 5% of each Fund's total
assets will be committed to initial margin deposits required pursuant to futures
contracts. Percentage investment limitations on each Fund's investment in
options on futures contracts are set forth above under "Options." Although each
Fund is authorized to invest in futures contracts and related options with
respect to foreign securities, stock indices, interest rates and currencies, it
will limit such investments to those which have been approved by the Commodity
Futures Trading Commission for investment by United States investors.

In attempting to manage its currency exposure, each Fund may buy and sell
currencies, either in the spot (cash) market or in the forward market (through
forward contracts generally expiring within one year). Each Fund may also enter
into forward contracts with respect to a specific purchase or sale of a
security, or with respect to its portfolio positions generally. When a Fund
purchases a security for settlement in the near future, it may immediately
purchase in the forward market the currency needed to pay for and settle the
purchase. By entering into a forward contract with respect to the specific
purchase or sale of a security denominated in a foreign currency, a Fund can
secure an exchange rate between the trade and settlement dates for that purchase
or sale transaction. This practice is sometimes referred to as "transaction
hedging." In addition to hedging specific securities transactions, the Funds may
also generally hedge their respective holdings denominated in a particular
currency. This practice is sometimes referred to as "position hedging." The
Funds may not position hedge with respect to the currency of a particular
country to an extent greater than the aggregate market value (at the time of
making such sale) of the securities held in any such Fund's portfolio
denominated or quoted in that particular foreign currency. None of the Funds
will enter into a position hedging commitment if, as a result thereof, (1)
AGGRESSIVE GROWTH FUND or GROWTH FUND would have more than 10% of the value of
their respective total assets committed to such contracts, or (2) INCOME FUND
would have more than 40% of the value of its total assets committed to such
contracts. None of the Funds will enter into a forward contract with a term of
more than one year.

Unlike futures contracts, forward contracts are generally individually
negotiated and privately traded. A forward contract obligates the seller to sell
a specific security or currency at a specified price on a future date, which may
be any fixed number of days from the date of the contract. Each Fund may enter
into transaction hedging forward contracts with respect to all or a substantial
portion of its trades.

There are risks associated with the use of futures and forward contracts and
options thereon for hedging purposes. During certain market conditions, sales of
futures contracts may not completely offset a decline or rise in the value of a
Fund's portfolio securities or currency against which the futures or forward
contract or options thereon are being sold. In the futures and options on
futures markets, it may not always be possible to execute a buy or sell order at
the desired price, or to close out an open position due to market conditions,
limits on open positions and/or daily price fluctuations. Risks in the use of
futures contracts and options thereon also result from the possibility that
changes in the market value of securities or currency may differ substantially
from the changes anticipated by a Fund when hedged positions were established.
Successful use of futures and forward contracts and options thereon is dependent
upon AIM's ability to predict correctly movements in the direction of the
applicable markets. No assurance can be given that AIM's judgment in this
respect will be correct. Accordingly, the Funds may lose the expected benefit of
futures and forward transactions and options thereon if markets move in a manner
unanticipated by AIM.

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OTHER INVESTMENT TECHNIQUES

Each of the Funds has the flexibility to invest, to the extent described
below, in a variety of instruments designed to enhance its investment
capabilities. Each of the Funds may invest in money market obligations, foreign
securities, repurchase agreements, reverse repurchase agreements, illiquid
securities, Rule 144A securities, ADRs and EDRs; INCOME FUND may invest in U.S.
Government Agency Mortgage-Backed Securities; and each of the Funds may purchase
or sell securities on a delayed delivery or when-issued basis, may borrow money,
may lend portfolio securities and make short sales "against the box." A short
sale is "against the box" to the extent that the Fund contemporaneously owns or
has the right to obtain securities identical to those sold short without payment
of any further consideration.

CASH MANAGEMENT AND TEMPORARY DEFENSIVE MEASURES. AIM may invest a portion of
the assets of the Funds in (i) cash or short-term Money Market Obligations, (ii)
U.S. government obligations or investment grade (high quality) corporate bonds
or other debt securities, and (iii) taxable municipal securities, when such
positions are deemed advisable in light of economic or market conditions or for
daily cash management purposes. In addition, AIM may invest, for temporary
defensive purposes, all or substantially all of the assets of the Funds in the
securities described above. The term "Money Market Obligations" includes a broad
range of U.S. Government and foreign government obligations, and bank and
commercial instruments that may be available in the money markets. Examples of
such obligations include U.S. Treasury obligations and repurchase agreements
secured by such obligations, bankers' acceptances, certificates of deposit,
repurchase agreements, time deposits and commercial paper, and U.S. Government
agencies' securities. Money Market Obligations such as bankers' acceptances,
certificates of deposit and time deposits may be purchased from U.S. or foreign
banks. See the Statement of Additional Information for more information on Money
Market Obligations.

To the extent that any of the Funds is invested to a significant degree in
cash or cash equivalent Money Market Obligations, U.S. government obligations or
investment grade (high quality) corporate bonds or other debt securities, or
taxable municipal securities, its ability to achieve its investment objective or
objectives may be adversely affected. Under normal circumstances, neither
AGGRESSIVE GROWTH FUND nor GROWTH FUND will invest more than 35% of the value of
its total assets in high-grade short-term securities,

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<PAGE> 20

including repurchase agreements. Under normal circumstances, INCOME FUND will
maintain at least 20% of its total assets in securities of U.S. issuers.

U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES. INCOME FUND may invest in
U.S. Government Agency Mortgage-Backed Securities. These securities are
obligations issued or guaranteed by the United States Government or by one of
its agencies or instrumentalities, including but not limited to the Government
National Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA"), or the Federal Home Loan Mortgage Corporation ("FHLMC").
U.S. Government Agency Mortgage-Backed Certificates provide for the pass-through
to investors of their pro-rata share of monthly payments (including any
principal prepayments) made by the individual borrowers on the pooled mortgage
loans, net of any fees paid to the guarantor of such securities and the
servicers of the underlying mortgage loans. GNMA, FNMA, and FHLMC each guarantee
timely distributions of interest to certificate holders. GNMA and FNMA guarantee
timely distributions of scheduled principal. FHLMC has in the past guaranteed
only the ultimate collection of principal of the underlying mortgage loan;
however, FHLMC Gold Participation Certificates now guarantee timely payment of
monthly principal reductions. Although their close relationship with the U.S.
Government is believed to make them high-quality securities with minimal credit
risks, the U.S. Government is not obligated by law to support either FNMA or
FHLMC. However, historically there have not been any defaults of FNMA or FHLMC
issues. See Appendix B for a more complete description of these securities.

Mortgage-backed securities consist of interests in underlying mortgages
generally with maturities of up to thirty years. However, due to early
unscheduled payments of principal on the underlying mortgages, the securities
have a shorter average life and, therefore, less volatility than a comparable
thirty-year bond. The value of U. S. Government Agency Mortgage-Backed
Securities, like other traditional debt instruments, will tend to decline as
interest rates rise and increase as interest rates decline.

REPURCHASE AGREEMENTS. Each of the Funds may enter into repurchase agreements
with institutions believed by the Company's Board of Directors to present
minimal credit risk. A repurchase agreement is an instrument under which the
Fund acquires ownership of a debt security and the seller agrees, at the time of
the sale, to repurchase the obligation at a mutually agreed upon time and price,
thereby determining the yield during the Fund's holding period. In the event of
a bankruptcy or other default of a seller of a repurchase agreement (such as the
sellers' failure to repurchase the obligation in accordance with the terms of
the agreement), a Fund could experience both delays in liquidating the
underlying securities and losses, including: (a) a possible decline in the value
of the underlying security during the period while the Fund seeks to enforce its
rights thereto; (b) possible reduced levels of income and lack of access to
income during this period; and (d) expenses of enforcing its rights. Repurchase
agreements are considered to be loans by the Fund under the Investment Company
Act of 1940, as amended (the "1940 Act"). Repurchase agreements will be secured
by U.S. Treasury securities, U.S. Government agency securities (including, but
not limited to, those which have been stripped of their interest payments and
mortgage-backed securities) and commercial paper. For additional information on
the use of repurchase agreements, see the Statement of Additional Information.

REVERSE REPURCHASE AGREEMENTS. Each Fund may invest in reverse repurchase
agreements, which involve the sale of securities held by the Fund, with an
agreement that the Fund will repurchase the securities at an agreed upon price
and date. Each Fund may employ reverse repurchase agreements (i) for temporary
emergency purposes, such as to meet unanticipated net redemptions so as to avoid
liquidating other portfolio securities during unfavorable market conditions;
(ii) to cover short-term cash requirements resulting from the timing of trade
settlements; or (iii) to take advantage of market situations where the interest
income to be earned from the investment of the proceeds of the transaction is
greater than the interest expense of the transaction. At the time it enters into
a reverse repurchase agreement, the Fund will segregate liquid assets having a
dollar value equal to the repurchase price. Reverse repurchase agreements are
considered borrowings by the Fund under the 1940 Act. Reverse repurchase
agreements involve the risk that the market value of securities retained by a
Fund in lieu of liquidation may decline below the repurchase price of the
securities sold by a Fund which it is obligated to repurchase. This risk, if
encountered, could cause a reduction on the net asset value of a Fund's shares.
AGGRESSIVE GROWTH FUND and GROWTH FUND currently intend to enter into reverse
repurchase agreements only for temporary or emergency purposes and not as a
means of increasing income. INCOME FUND may enter into reverse repurchase
agreements to enhance portfolio returns. See "Borrowing."

LENDING OF PORTFOLIO SECURITIES. Each Fund may from time to time lend
securities from their respective portfolios, with a value not exceeding 33 1/3%
of its total assets, to banks, brokers and other financial institutions, and
receive in return collateral in the form of cash or securities issued or
guaranteed by the U.S. Government which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. During the period of the loan, a Fund receives the income on both
the loaned securities and the collateral and thereby increases its yield. In the
event that the borrower defaults on its obligation to return loaned securities
because of insolvency or otherwise, a Fund could experience delays and costs in
gaining access to the collateral and could suffer a loss to the extent that the
value of the collateral falls below the market value of the loaned securities.

SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS. Each Fund may
purchase securities on a "when-issued" basis, that is, delivery of and payment
of the securities is not fixed at the date of purchase, but is set after the
securities are issued (normally within forty-five days after the date of the
transaction). Each Fund also may purchase or sell securities on a delayed
delivery basis. The payment obligation and the interest rate that will be
received on the delayed delivery securities are fixed at the time the buyer
enters into the commitment. Each Fund will only make commitments to purchase
when-issued or delayed delivery securities with the intention of actually
acquiring such securities, but each Fund may sell these securities before the
settlement date if it is

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deemed advisable. If a Fund purchases a when-issued security or enters into a
delayed delivery agreement, the Fund's custodian bank will segregate liquid
assets in an amount at least equal to the when-issued commitment or delayed
delivery agreement commitment.

DOLLAR ROLL TRANSACTIONS. In order to enhance portfolio returns and manage
prepayment risks, INCOME FUND may engage in dollar roll transactions with
respect to mortgage securities issued by GNMA, FNMA and FHLMC. In a dollar roll
transaction, a Fund sells a mortgage security held in the portfolio to a
financial institution such as a bank or broker-dealer, and simultaneously agrees
to repurchase a substantially similar security (same type, coupon and maturity)
from the institution at a later date at an agreed upon price. The mortgage
securities that are repurchased will bear the same interest rate as those sold,
but generally will be collateralized by different pools of mortgages with
different prepayment histories. During the period between the sale and
repurchase, the Fund will not be entitled to receive interest and principal
payments on the securities sold. Proceeds of the sale will be invested in
short-term instruments, and the income from these investments, together with any
additional fee income received on the sale, could generate income for the Fund
exceeding the yield on the sold security.

Dollar roll transactions involve the risk that the market value of the
securities retained by a Fund may decline below the price of the securities that
the Fund has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities under a dollar roll transaction files for
bankruptcy or becomes insolvent, the Fund's use of the proceeds from the sale of
the securities may be restricted pending a determination by the other party, or
its trustee or receiver, whether to enforce the Fund's obligation to repurchase
the securities. See "Borrowing," below for the applicable limitation on dollar
roll transactions.

BORROWING. Each of the Funds may borrow money to a limited extent from banks
(including the Funds' custodian bank) for temporary or emergency purposes
subject to the limitations under the 1940 Act. The Funds will restrict
borrowings, reverse repurchase agreements and dollar roll transactions to an
aggregate of 33-1/3% of each Fund's respective total assets at the time of the
transaction. Neither AGGRESSIVE GROWTH FUND nor GROWTH FUND will purchase
additional securities when any borrowings from banks exceed 5% of each Fund's
respective total assets.

Reverse repurchase agreement transactions and dollar roll transactions are
considered borrowings under the 1940 Act. Any investment gains made by INCOME
FUND with the borrowed monies in excess of interest paid by the Fund will cause
the net asset value of the Fund's shares to rise faster than would otherwise be
the case. On the other hand, if the investment performance of the additional
securities purchased with the proceeds of such borrowings fails to cover the
interest paid by the money borrowed by the Fund, the net asset value of the Fund
will decrease faster than would otherwise be the case. This speculative factor
is known as "leveraging."

SHORT SALES. Each Fund may make short sales "against the box." A short sale is
a transaction in which a party sells a security it does not own in anticipation
of a decline in the market value of that security. A short sale is "against the
box" to the extent that a Fund contemporaneously owns or has the right to obtain
securities identical to those sold short without payment of any further
consideration. The Funds will enter into such transactions only to the extent
the aggregate value of all securities sold short does not represent more than
10% of each Fund's respective assets at any given time.

ILLIQUID SECURITIES AND RULE 144A SECURITIES. Each Fund may invest up to 15%
of its net assets in securities that are illiquid. Illiquid securities include
securities that have no readily available market quotations and cannot be
disposed of promptly (within seven days) in the normal course of business at a
price at which they are valued. Illiquid securities may include securities that
are subject to restrictions on resale because they have not been registered
under the Securities Act of 1933. Unregistered securities may, in certain
circumstances, be resold pursuant to Rule 144A, and thus may or may not
constitute illiquid securities. Limitations on the resale of unregistered
securities may have an adverse effect on their marketability, which may prevent
the Fund from disposing of them promptly at reasonable prices. The Fund may have
to bear the expense of registering such securities for resale, and the risk of
substantial delays in effecting such registrations. The Company's Board of
Directors is responsible for developing and establishing guidelines and
procedures for determining the liquidity of Rule 144A securities on behalf of
the Funds and monitoring AIM's implementation of the guidelines and procedures.

INVESTMENT IN OTHER INVESTMENT COMPANIES. Each of the Funds may invest in
other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.

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RISK FACTORS

There can be no assurance that each Fund's investment objective will be
attained. Each Fund is designed for investors seeking international
diversification, and is not intended as a complete investment program. In
addition, investing in securities of foreign companies generally involves
greater risks than investing in securities of domestic companies. INCOME FUND
may also invest in high yield securities (i.e., "junk bonds"), which entail
certain risks. Investors should consider carefully the following special factors
before investing in a Fund.

FOREIGN SECURITIES. The following considerations are risk factors associated
with the Funds' investments in foreign securities:

CURRENCY RISK. The value of a Fund's foreign investments may be
affected by changes in currency exchange rates. The U.S. dollar value of a
foreign security generally decreases when the value of the U.S. dollar
rises against the foreign currency in which the security is denominated,
and tends to increase when the value of the U.S. dollar falls against such
currency.

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POLITICAL AND ECONOMIC RISK. The economies of many of the countries in
which a Fund may invest are not as developed as the United States economy
and may be subject to significantly different forces. Political or social
instability, expropriation or confiscatory taxation, and limitations on the
removal of funds or other assets could also adversely affect the value of a
Fund's investments.

REGULATORY RISK. Foreign companies are generally not subject to the
regulatory controls imposed on United States issuers and, as a consequence,
there is generally less public information available about foreign
securities than is available about domestic securities. Foreign companies
are not subject to accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic
companies. Income from foreign securities owned by a Fund may be reduced by
withholding tax at the source which would reduce dividend income payable to
the Fund's shareholders.

MARKET RISK. The securities markets in many of the countries in which
a Fund invests will have substantially less trading volume than the major
United States markets. As a result, the securities of some foreign
companies may be less liquid and experience more price volatility than
comparable domestic securities. There is generally less government
regulation and supervision of foreign stock exchanges, brokers and issuers
which may make it difficult to enforce contractual obligations. Transaction
costs in foreign securities markets are likely to be higher, since
brokerage commission rates in foreign countries are likely to be higher
than in the United States. Further, the settlement period of securities
transactions in foreign markets may be longer than in domestic markets.
These considerations generally are more of a concern in developing
countries. For example, the possibility of revolution and the dependence on
foreign economic assistance may be greater in these countries than in
developed countries. The management of the Funds seeks to mitigate the
risks associated with these considerations through diversification and
active professional management.

NON-INVESTMENT GRADE DEBT SECURITIES (INCOME FUND ONLY). INCOME FUND may
invest in non-investment grade debt securities, commonly known as "junk bonds."
While generally providing greater income and opportunity for gain,
non-investment grade debt securities may be subject to greater risks than
higher-rated securities. Economic downturns tend to disrupt the market for junk
bonds and adversely affect their values. Such economic downturns may be expected
to result in increased price volatility for junk bonds and of the value of
shares of the Fund, and increased issuer defaults on junk bonds.

In addition, many issuers of junk bonds are substantially leveraged, which may
impair their ability to meet their obligations. In some cases, junk bonds are
subordinated to the prior payment of senior indebtedness, which potentially
limits a Fund's ability to fully recover principal or to receive payments when
senior securities are subject to a default.

The credit rating of a debt security does not necessarily address its market
value risk, and ratings may from time to time change to reflect developments
regarding the issuer's financial condition. Junk bonds have speculative
characteristics which are likely to increase in number and significance with
each successive lower rating category. Credit ratings evaluate the safety of
principal and interest payments, not market value risk of high yield bonds.
Also, since credit rating agencies may fail to timely change the credit ratings
to reflect subsequent events, AIM continuously monitors the issuers of high
yield bonds in INCOME FUND'S portfolio to determine if the issuers will have
sufficient cash flow and profits to meet required principal and interest
payments, and to attempt to assure the bonds' liquidity so that INCOME FUND can
meet redemption requests. The achievement of INCOME FUND'S investment objective
may be more dependent on AIM's own credit analysis than might be the case for a
fund which invests in higher quality bonds. INCOME FUND may retain a portfolio
security whose rating has been changed. See Appendix A to this
Prospectus -- "Description of Corporate Bond Ratings."

When the secondary market for junk bonds becomes more illiquid, or in the
absence of readily available market quotations for such securities, the relative
lack of reliable objective data makes it more difficult for the directors to
value a Fund's securities, and judgment plays a more important role in
determining such valuations. Increased illiquidity in the junk bond market also
may affect a Fund's ability to dispose of such securities at desirable prices.

In the event a Fund experiences an unexpected level of net redemptions, the
Fund could be forced to sell its junk bonds without regard to their investment
merits, thereby decreasing the asset base upon which the Fund's expenses can be
spread and possibly reducing the Fund's rate of return. Prices of junk bonds
have been found to be less sensitive to fluctuations in interest rates, and more
sensitive to adverse economic changes and individual corporate developments,
than those of higher-rated debt securities.

NON-DIVERSIFIED PORTFOLIO (INCOME FUND ONLY). INCOME FUND is a non-diversified
portfolio, which means that, with respect to 50% of its total assets, it may
invest more than 5% of its assets in obligations of one issuer. (A diversified
portfolio may not invest more than 5% of its assets in obligations of one
issuer, with respect to 75% of its total assets.) Since INCOME FUND may invest a
greater percentage of its assets in securities of fewer issuers than a
diversified portfolio, it may be subject to greater investment and credit risks
than a diversified portfolio.

EMERGING MARKETS AND DEVELOPING COUNTRIES. Investors should also be aware that
the Funds may invest in companies located within emerging or developing
countries. Investments in emerging markets or developing countries involve
exposure to economic structures that are generally less diverse and mature and
to political systems which can be expected to have less stability than those of
more developed countries. Such countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
which trade only a small number of securities. Historical experience indicates
that emerging markets have been more volatile than the markets of more mature
economies; such markets have also from time to time provided higher rates

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of return and greater risks to investors. AIM believes that these
characteristics of emerging markets can be expected to continue in the future.
In addition, throughout the countries commonly referred to as the Eastern Bloc,
the lack of a capital market structure or market-oriented economy and the
possible reversal of recent favorable economic, political and social events in
some of those countries present greater risks than those associated with more
developed, market-oriented Western European countries and markets.

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INVESTMENT RESTRICTIONS

The following restrictions are matters of fundamental policy and may not be
changed without approval of a Fund's shareholders.

No Fund may:

1. Purchase a security if, as a result, more than 10% of the
outstanding voting securities of any issuer would be held by the Fund,
except that the Fund may purchase securities of other investment companies
to the extent permitted by applicable law or exemptive order.

2. Purchase a security if, as a result, 25% or more of the value of
the Fund's total assets, taken at market value, would be invested in the
securities of issuers having their principal business activities in the
same industry. This restriction does not apply to obligations issued or
guaranteed by the U.S. Government or by any of its agencies or
instrumentalities but will apply to foreign government obligations unless
the SEC permits their exclusion.

3. Borrow money, except that the Fund may borrow from banks (including
the Fund's custodian bank) and enter into reverse repurchase agreements and
dollar roll transactions (INCOME FUND only). With respect to AGGRESSIVE
GROWTH FUND and GROWTH FUND, such permitted borrowings shall be used as a
temporary defensive measure for extraordinary or emergency purposes.
Permitted borrowings shall be in amounts not exceeding 33- 1/3% of a Fund's
total assets, taken at market value, and each Fund may pledge amounts of up
to 20% of its total assets, taken at market value, to secure such
borrowings. Whenever bank borrowings exceed 5% of the value of the total
assets of AGGRESSIVE GROWTH FUND or GROWTH FUND, such Fund will not make
any additional purchases of securities for investment purposes.

Neither AGGRESSIVE GROWTH FUND nor GROWTH FUND will purchase a security if, as
a result, with respect to 75% of the value of the Fund's respective total
assets, taken at market value, more than 5% of the value of the Fund's total
assets, taken at market value, would be invested in securities of any one
issuer, except securities issued or guaranteed by the U.S. Government or any of
its agencies or instrumentalities and except that the Fund may purchase
securities of other investment companies to the extent permitted by applicable
law or exemptive order.

INCOME FUND will not purchase a security if, as a result, with respect to 50%
of the value of the Fund's total assets taken at market value, more than 5% of
the value of the Fund's total assets, taken at market value, would be invested
in securities of any one issuer, except securities issued or guaranteed by the
U.S. Government or any of its agencies or instrumentalities.

A complete listing of investment restrictions applicable to the Funds, some of
which may be changed by the Board of Directors without shareholder approval, is
contained in the Statement of Additional Information.

- --------------------------------------------------------------------------------

PORTFOLIO TURNOVER

Any particular security will be sold, and the proceeds reinvested, whenever
such action is deemed prudent from the viewpoint of a Fund's investment
objectives, regardless of the holding period of that security. A higher rate of
portfolio turnover may result in higher transaction costs, including brokerage
commissions. Also, to the extent that higher portfolio turnover results in a
higher rate of net realized capital gains to a Fund, the portion of the Fund's
distributions constituting taxable capital gains may increase. For additional
information regarding income taxes and brokerage practices, see the Fund's
Statement of Additional Information.

- --------------------------------------------------------------------------------

MANAGEMENT

The overall management of the business and affairs of the Funds are vested
with the Company's Board of Directors. The Board of Directors approves all
significant agreements between the Funds and persons or companies furnishing
services to the Funds, including the investment advisory agreement with AIM, the
administrative services agreement with AIM, the agreement with AIM Distributors
regarding distribution of the Funds' shares, the agreement with State Street
Bank and Trust Company as custodian, and the agreement with A I M Fund Services,
Inc. as transfer agent. The day-to-day operations of the Funds are delegated to
the officers of the Company and to AIM, subject always to the objective and
policies of each Fund and to the general supervision of the Board of Directors.
Information concerning the Board of Directors may be found in the Statement of
Additional Information. Certain directors and officers of the Company are
affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM. AIM Management is a holding company engaged in the
financial services business. AIM Management is an indirect wholly owned
subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. For a discussion of AIM Management and its subsidiaries'
Year 2000 Compliance Project, see "General Information -- Year 2000 Compliance
Project."

23
<PAGE> 24

INVESTMENT ADVISOR. A I M Advisors, Inc., 11 Greenway Plaza, Suite 100,
Houston, Texas 77046, serves as the investment advisor to each Fund pursuant to
a Master Investment Advisory Agreement, dated as of February 28, 1997. A I M was
organized in 1976 and, together with its subsidiaries, manages or advises over
50 investment company portfolios encompassing a broad range of investment
objectives. AIM is a wholly owned subsidiary of AIM Management.

Under the terms of the Advisory Agreement, AIM supervises all aspects of each
Fund's operations and provides investment advisory services to the Fund. AIM
obtains and evaluates economic, statistical and financial information to
formulate and implement investment programs for the Funds.

ADMINISTRATOR. AIM and the Company have entered into an Administrative
Services Agreement dated as of February 28, 1997, pursuant to which AIM has
agreed to provide or arrange for the provision of certain accounting and other
administrative services to the Funds. AIM is entitled to receive from each Fund
reimbursement of its costs or such reasonable compensation as may be approved by
the Company's Board of Directors for providing specified administrative
services. Currently, AIM is reimbursed for the services of the Company's
principal financial officer and his staff, and any expenses related to such
services.

For a discussion of AIM's brokerage allocation policies and practices, see
"Portfolio Transactions and Brokerage" in the Statement of Additional
Information. In accordance with policies established by the directors, AIM may
take into account sales of shares of the Funds and other funds advised by AIM in
selecting broker-dealers to effect portfolio transactions on behalf of the
Funds.

PORTFOLIO MANAGEMENT. AIM uses a team approach and disciplined investment
strategy in providing investment advisory services to all its accounts,
including the Funds. AIM's investment staff consists of approximately 135
individuals. While individual members of AIM's investment staff are assigned
primary responsibility for the day-to-day management of each of AIM's accounts,
all accounts are reviewed on a regular basis by AIM's Investment Policy
Committee to ensure that they are being invested in accordance with the
accounts' and AIM's investment policies. The individuals on the investment team
who are primarily responsible for the day-to-day management of each of the Funds
and their titles, if any, with AIM or its affiliates and the Company, the length
of time they have been responsible for the management of the Funds, their years
of experience and prior experience are shown below:

A. Dale Griffin, III, Robert M. Kippes, Clas G. Olsson, Paul A. Rogge, Barrett
K. Sides and Kenneth A. Zschappel are primarily responsible for the day-to-day
management of AGGRESSIVE GROWTH FUND. Mr. Griffin is Vice President of A I M
Capital Management, Inc. ("AIM Capital"), a wholly owned subsidiary of AIM, and
has been responsible for the Fund since its inception in 1994. He has been
associated with AIM and/or its subsidiaries since 1989 and began working as an
investment professional in 1987. Mr. Kippes is Vice President of AIM Capital and
also has been responsible for the Fund since its inception in 1994. He has been
associated with AIM and/or its subsidiaries since he began working as an
investment professional in 1989. Mr. Rogge is Vice President of AIM Capital and
also has been responsible for the Fund since its inception in 1994. He has been
associated with AIM and/or its subsidiaries since he began working as an
investment professional in 1991. Mr. Sides is Assistant Vice President of AIM
Capital and has been responsible for the Fund since 1995. He has been associated
with AIM and/or its subsidiaries since he began working as an investment
professional in 1990. Mr. Olsson is an Investment Officer of AIM Capital and has
been responsible for the Fund since 1997. He has been associated with AIM and/or
its subsidiaries since 1994 and began working as an investment professional in
1994. Prior to 1994, Mr. Olsson was a broker assistant with Merrill Lynch,
Pierce, Fenner & Smith Incorporated. Mr. Zschappel is Assistant Vice President
of AIM Capital and has been responsible for the Fund since January 1998. He has
been associated with AIM and/or its subsidiaries since he began working as an
investment professional in 1990.

Monika H. Degan, A. Dale Griffin, III, Clas G. Olsson, Paul A. Rogge, Jonathan
C. Schoolar and Barrett K. Sides are primarily responsible for the day-to-day
management of GROWTH FUND. Background information for Mr. Griffin, Mr. Olsson,
Mr. Rogge and Mr. Sides is discussed above with respect to the management of
AGGRESSIVE GROWTH FUND. Mr. Griffin and Mr. Rogge have been responsible for the
Fund since its inception in 1994. Mr. Olsson has been responsible for the Fund
since 1997. Mr. Sides has been responsible for the Fund since 1995. Ms. Degan is
an Investment Officer of AIM Capital and has been responsible for the Fund since
1997. She has been associated with AIM and/or its subsidiaries since 1995 and
began working as an investment professional in 1990. Prior to 1995, Ms. Degan
was a Senior Financial Analyst for Shell Oil Co. Pension Trust. Mr. Schoolar is
Senior Vice President of AIM Capital, Vice President of AIM, Vice President of
the Company and has been responsible for the Fund since its inception in 1994.
He has been associated with AIM and/or its subsidiaries since 1986 and began
working as an investment professional in 1984.

Robert G. Alley, John L. Pessarra and Carolyn L. Gibbs are primarily
responsible for the day-to-day management of INCOME FUND. Mr. Alley is Senior
Vice President of AIM Capital, Vice President of AIM, Vice President of the
Company and has been responsible for the Fund since its inception in 1994. He
has been associated with AIM and/or its subsidiaries since 1992 and began
working as an investment professional in 1973. Mr. Pessarra is Vice President of
AIM Capital and also has been responsible for the Fund since its inception in
1994. He has been associated with AIM and/or its subsidiaries since 1990 and
began working as an investment professional in 1985. Ms. Gibbs is Vice President
of AIM Capital and has been responsible for the Fund since 1995. She has been
associated with AIM and/or its subsidiaries since 1992 and began working as an
investment professional in 1983.

24
<PAGE> 25

FEES AND EXPENSES. AIM is entitled to be paid by each Fund an advisory fee at
the annual rates of:

AIM GLOBAL AGGRESSIVE GROWTH FUND

<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
---------- -----------
<S> <C>
First $1 billion............................................ 0.90%
Over $1 billion............................................. 0.85%
</TABLE>

AIM GLOBAL GROWTH FUND

<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
---------- -----------
<S> <C>
First $1 billion............................................ 0.85%
Over $1 billion............................................. 0.80%
</TABLE>

AIM GLOBAL INCOME FUND

<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
---------- -----------
<S> <C>
First $1 billion............................................ 0.70%
Over $1 billion............................................. 0.65%
</TABLE>

Although these fees are higher than those paid by most mutual funds which
invest in domestic securities, they are competitive with such fees paid by
mutual funds which invest primarily in foreign securities. The Company believes
such fees are justified due to the higher costs and additional expenses
associated with managing and operating funds holding primarily foreign
securities.

For the year ended October 31, 1997, each Fund paid the following compensation
to AIM for its advisory services, and the total expenses of each class of such
Fund were, stated as a percentage of that class' average daily net assets, as
follows:

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMPENSATION EXPENSE EXPENSE EXPENSE*
TO AIM RATIO RATIO RATIO
------------ ------- ------- --------
<S> <C> <C> <C> <C>
Aggressive Growth Fund....................... 0.87% 1.75% 2.30% 2.30%
Growth Fund.................................. 0.85% 1.76% 2.29% 2.29%
Income Fund.................................. 0.09% 1.25% 1.76% 1.76%
</TABLE>

- ---------------

* For the period August 4, 1997 (date sales commenced) to October 31, 1997.

For the fiscal year ended October 31, 1997, AIM waived advisory fees for
INCOME FUND which represented 0.61% of such Fund's average daily net assets.

For the year ended October 31, 1997, each Fund reimbursed AIM for
administrative services in the following amounts, stated as a percentage of the
Funds' average daily net assets:

<TABLE>
<CAPTION>
REIMBURSEMENT
PAYMENTS
-------------
<S> <C>
Aggressive Growth Fund...................................... 0.00%
Growth Fund................................................. 0.03%
Income Fund................................................. 0.15%
</TABLE>

In addition, the Company and A I M Fund Services, Inc., P.O. Box 4739,
Houston, TX 77210-4739, a wholly owned subsidiary of AIM and registered transfer
agent, have entered into a Transfer Agency and Service Agreement, pursuant to
which AFS provides transfer agency, dividend distribution and disbursement, and
shareholder services to the Funds.

FEE WAIVERS. AIM may from time to time voluntarily waive or reduce its fees,
while retaining its ability to be reimbursed prior to the end of each fiscal
year. Fee waivers or reductions, other than those contained in the Advisory
Agreement, may be modified or terminated at any time and without notice to
investors. AIM has agreed to waive advisory fees under the Advisory Agreement
for INCOME FUND until such time as in AIM's judgment, the Fund has achieved a
size in assets under management to bear such costs.

DISTRIBUTOR. The Company has entered into Master Distribution Agreements on
behalf of the Funds (the "Distribution Agreements") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A, Class B and Class C shares of the Funds. The address of
A I M Distributors, Inc. is P.O. Box 4739, Houston, Texas 77210-4739. Certain
directors and officers of the Company are affiliated with AIM Distributors.

The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Funds directly and through institutions with whom
AIM Distributors has entered into selected dealer agreements. Under the
Distribution Agreement for the Class B shares, AIM Distributors sells Class B
shares at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its

25
<PAGE> 26

assignee or transferee) will receive 0.75% (of the total 1.00% payable under the
distribution plan applicable to Class B shares) of each Fund's average daily net
assets attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
sales charges in respect of the outstanding Class B shares attributable to AIM
Distributors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments to AIM Distributors. Termination of the Class B shares distribution
plan or Distribution Agreement does not affect the obligation of Class B
shareholders to pay Contingent Deferred Sales Charges.

DISTRIBUTION PLANS. Class A and C Plan. The Company has adopted a Master
Distribution Plan applicable to Class A and Class C shares of each Fund (the
"Class A and C Plan") pursuant to Rule 12b-1 under the 1940 Act, to compensate
AIM Distributors for the purpose of financing any activity that is intended to
result in the sale of Class A and Class C shares of each Fund.

Under the Class A and C Plan, the Company may compensate AIM Distributors an
aggregate amount of 0.50% of the average daily net assets of Class A shares of
each Fund on an annualized basis and an aggregate amount of 1.00% of the average
daily net assets of Class C shares of each Fund on an annualized basis.

The Class A and C Plan is designed to compensate AIM Distributors, on a
quarterly basis, for certain promotional and other sales-related costs, and to
implement a dealer incentive program which provides for periodic payments to
selected dealers who furnish continuing personal shareholder services to their
customers who purchase and own Class A or Class C shares of a Fund. Payments can
also be directed by AIM Distributors to selected institutions who have entered
into service agreements with respect to Class A and Class C shares of each Fund
and who provide continuing personal services to their customers who own Class A
and Class C shares of a Fund. The service fees payable to selected institutions
are calculated at the annual rate of 0.25% of the average daily net asset value
of those Fund shares that are held in such institution's customers' accounts
which were purchased on or after a prescribed date set forth in the Plan.

Of the aggregate amount payable under the Class A and C Plan, payments to
dealers and other financial institutions that provide continuing personal
shareholder services to their customers who purchase and own shares of a Fund,
in amounts of up to 0.25% of the average net assets of the Fund attributable to
the customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A and C Plan. The Class A and C
Plan also imposes a cap on the total amount of sales charges, including
asset-based sales charges, that may be paid by the Company with respect to a
Fund. The Class A and C Plan does not obligate a Fund to reimburse AIM
Distributors for the actual expenses AIM Distributors may incur in fulfilling
its obligations under the Class A and C Plan on behalf of a Fund. Thus, under
the Class A and C Plan, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, a Fund will not be
obligated to pay more than that fee. If AIM Distributors' expenses are less than
the fee it receives, AIM Distributors will retain the full amount of the fee.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by rules of the National Association of Securities Dealers, Inc.

Class B Plan. The Company has also adopted a master distribution plan
applicable to Class B shares of each Fund (the "Class B Plan"). Under the Class
B Plan, each Fund pays distribution expenses at an annual rate of 1.00% of the
average daily net assets attributable to the Class B shares. Of such amount,
each Fund pays a service fee of 0.25% of the average daily net assets
attributable to its 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 such Fund. Any amounts not paid
as a service fee would constitute an asset based sales charge. Amounts paid in
accordance with the Class B Plan may be used to finance any activity primarily
intended to result in the sale of Class B shares.

Activities that may be financed under the Class A and C Plan and the Class B
Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, supplemental payments to dealers and other
institutions such as asset-based sales charges or as payments of service fees
under shareholder service arrangements and the cost of administering the Plans.
These amounts payable by a Fund under the Plans need not be directly related to
the expenses actually incurred by AIM Distributors on behalf of the Fund. Thus,
even if AIM Distributors' actual expenses exceed the fee payable to AIM
Distributors thereunder at any given time, the Company will not be obligated to
pay more than that fee, and, if AIM Distributors' expenses are less than the fee
it receives, AIM Distributors will retain the full amount of the fee. Payments
pursuant to the Plans are subject to any applicable limitations imposed by the
rules of the National Association of Securities Dealers, Inc.

Each of the Plans may be terminated at any time by a vote of the majority of
those directors who are not "interested persons" of the Company or by a vote of
the holders of the majority of the outstanding shares of the applicable class.

Under the Plans, AIM Distributors may in its discretion from time to time
agree to waive voluntarily all or any portion of its fee that has not been
assigned or transferred, while retaining its ability to be reimbursed for such
fee prior to the end of each fiscal year.

Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of a Fund on an agency basis, may
receive payments from the Fund pursuant to the Fund's Plans. AIM Distributors
does not act as principal, but rather as agent, for the Funds in making such
payments. Financial intermediaries and any other person entitled to receive
compensation for selling Fund shares may receive different compensation for
selling shares of one particular class over another.

For additional information concerning the operation of the Plans, see the
Statement of Additional Information.

26
<PAGE> 27

- --------------------------------------------------------------------------------

ORGANIZATION OF THE COMPANY

The Company was organized in 1991 as a Maryland corporation, and is registered
with the SEC as a diversified open-end series management investment company. The
Company currently consists of six investment portfolios: the Funds, AIM ASIAN
GROWTH FUND, AIM EUROPEAN DEVELOPMENT FUND, and AIM INTERNATIONAL EQUITY FUND.
The Board of Directors may authorize additional portfolios in the future. Shares
of the Funds are offered to investors pursuant to this Prospectus, while shares
of the Company's other portfolios are offered to investors pursuant to separate
prospectuses. The authorized capital stock of the Company consists of
4,000,000,000 shares of common stock with a par value of $0.001 per share, of
which 200,000,000 shares are designated Class A shares, 200,000,000 shares are
designated Class B shares and 200,000,000 shares are designated Class C shares
of each investment portfolio of the Company, and the balance of which are
unclassified.

Class A shares, Class B shares and Class C shares of the same Fund represent
interests in that Fund's assets and have identical voting, dividend, liquidation
and other rights on the same terms and conditions, except that each class of
shares bears differing class-specific expenses (such as those associated with
the shareholder servicing of their shares) and is subject to differing sales
loads (which may affect performance), conversion features and exchange
privileges, and has exclusive voting rights on matters pertaining to that class'
distribution plan.

Except as specifically noted above, shareholders of each Fund are entitled to
one vote per share (with proportionate voting for fractional shares),
irrespective of the relative net asset value of the Class A shares, Class B
shares and Class C shares of a Fund. However, on matters affecting one portfolio
of the Company or one class of shares, a separate vote of shareholders of that
portfolio or class is required. Shareholders of a portfolio or class are not
entitled to vote on any matter which does not affect that portfolio or class but
which requires a separate vote of another portfolio or class. An example of a
matter which would be voted on separately by shareholders of a portfolio is the
approval of an advisory agreement, and an example of a matter which would be
voted on separately by shareholders of a class of shares is approval of a
distribution plan. When issued, shares of each Fund are fully paid and
nonassessable, have no preemptive or subscription rights, and are fully
transferable. Other than the automatic conversion of Class B shares to Class A
shares, there are no conversion rights. Shares do not have cumulative voting
rights, which means that in situations in which shareholders elect directors,
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors of the Company, and the holders of less than 50% of
the shares voting for the election of directors will not be able to elect
any directors.

Under Maryland law and the Company's By-Laws, the Company need not hold an
annual meeting of shareholders unless a meeting is otherwise required under the
1940 Act to elect directors. As of February 2, 1998, Merrill Lynch, Pierce,
Fenner & Smith Incorporated was the owner of record of 26.14% and 46.94% of the
outstanding Class B shares and Class C shares, respectively, of AGGRESSIVE
GROWTH FUND. As of February 2, 1998, Merrill Lynch, Pierce, Fenner & Smith
Incorporated was the owner of record of 36.29% of the outstanding Class C shares
of GROWTH FUND. As long as Merrill Lynch, Pierce, Fenner & Smith Incorporated
owns over 25% of such shares, it may be presumed to be in "control" of the Class
B shares and Class C shares of AGGRESSIVE GROWTH FUND and the Class C shares of
GROWTH FUND, as defined in the 1940 Act.

27
<PAGE> 28

THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND SHAREHOLDER
ASSISTANCE IS
(800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
INVESTOR'S GUIDE
TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------

INTRODUCTION TO THE AIM FAMILY OF FUNDS

THE AIM FAMILY OF FUNDS consists of the following mutual funds:

<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND(*) AIM GLOBAL UTILITIES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND(*) AIM GROWTH FUND
AIM ADVISOR LARGE CAP VALUE FUND(*) AIM HIGH INCOME MUNICIPAL FUND
AIM ADVISOR MULTIFLEX FUND(*) AIM HIGH YIELD FUND
AIM ADVISOR REAL ESTATE FUND(*) AIM INCOME FUND
AIM AGGRESSIVE GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM ASIAN GROWTH FUND AIM INTERNATIONAL EQUITY FUND
AIM BALANCED FUND AIM LIMITED MATURITY TREASURY FUND
AIM BLUE CHIP FUND AIM MONEY MARKET FUND(**)
AIM CAPITAL DEVELOPMENT FUND AIM MUNICIPAL BOND FUND
AIM CHARTER FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM CONSTELLATION FUND AIM TAX-EXEMPT CASH FUND(**)
AIM EUROPEAN DEVELOPMENT FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM VALUE FUND
AIM GLOBAL GROWTH FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND
</TABLE>

(*) Class B Shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND and AIM
REAL ESTATE FUND will not be available until on or about March 3, 1998.

(**) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of
AIM MONEY MARKET FUND are offered to investors at net asset value, without
payment of a sales charge, as described below. Other funds, including the
Class A, Class B and Class C shares of AIM MONEY MARKET FUND, are sold with
an initial sales charge or subject to a contingent deferred sales charge
upon redemption, as described below.

IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------

HOW TO PURCHASE SHARES

HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.

Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed IRS Form W-8 (for non-resident aliens) or Form
W-9 (certifying exempt status) accompanying the registration information will be
subject to backup withholding. See the Account Application for applicable
Internal Revenue Service penalties. The minimum initial investment is $500,
except for accounts initially established through an Automatic Investment Plan,
which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Salary Reduction ("SARSEP") accounts, Savings Incentive Match
Plans for Employee IRA ("SIMPLE IRA") accounts, 403(b) plans or 457 (state
deferred compensation) plans (except that the minimum initial investment for
salary deferrals for such plans is $25), or for investment of dividends and
distributions of any of the AIM Funds into any existing AIM Funds account.

AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739

MCF-02/98
A-1
<PAGE> 29

For additional information or assistance, investors should call the Client
Services Department of AFS at:

(800) 959-4246

Shares of any AIM Funds not named on the cover of this Prospectus are offered
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.

INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:

<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>

HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.

BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.

BY AIM BANK CONNECTION--SM--: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for detail.

- --------------------------------------------------------------------------------

TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS

Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE CHIP
FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION FUND,
AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM GROWTH FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE
FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH
FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may
be purchased at their respective net asset value plus a sales charge as
indicated below, except that Class A shares of AIM TAX-EXEMPT CASH FUND and AIM
Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a sales charge and
Class B shares (the "Class B shares") and Class C shares ("Class C shares") of
the Multiple Class Funds are sold at net asset value subject to a contingent
deferred sales charge payable upon certain redemptions. These contingent
deferred sales charges are described under the caption "How to Redeem
Shares -- Multiple Distribution System." Securities dealers and other persons
entitled to receive compensation for selling or servicing shares of a Multiple
Class Fund may receive different compensation for selling or servicing one
particular class of shares over another class in the same Multiple Class Fund.
Factors an investor should consider prior to purchasing Class A, Class B or
Class C shares (or, if applicable, AIM Cash Reserve Shares) of a Multiple Class
Fund are described below under "Special Information Relating to Multiple Class
Funds." For information on purchasing any of the AIM Funds and to receive a
prospectus, please call (800) 347-4246. As described below, the sales charge
otherwise applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value." The following tables show the sales charge and dealer concession
at various investment levels for the AIM Funds.

MCF-02/98
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<PAGE> 30

SALES CHARGES AND DEALER CONCESSIONS

GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BLUE CHIP
FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION FUND,
AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL UTILITIES FUND, AIM GROWTH FUND, AIM
INTERNATIONAL EQUITY FUND, AIM MONEY MARKET FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND.

<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C>
Less than $ 25,000 5.50% 5.82% 4.75%
$ 25,000 but less than $ 50,000 5.25 5.54 4.50
$ 50,000 but less than $ 100,000 4.75 4.99 4.00
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 3.00 3.09 2.50
$500,000 but less than $1,000,000 2.00 2.04 1.60
</TABLE>

There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."

GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GROWTH FUND,
AIM GLOBAL INCOME FUND, AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM
INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM MUNICIPAL BOND FUND and AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT.

<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.00%
$ 50,000 but less than $ 100,000 4.00 4.17 3.25
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.60
</TABLE>

There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/ or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."

MCF-02/98
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<PAGE> 31

GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.

<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C>
Less than $ 100,000 1.00% 1.01% 0.75%
$100,000 but less than $ 250,000 0.75 0.76 0.50
$250,000 but less than $1,000,000 0.50 0.50 0.40
</TABLE>

There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.

ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.

In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.

AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million or more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to a contingent deferred sales charge, for all AIM Funds
other than Class A shares of each of AIM LIMITED MATURITY TREASURY FUND and AIM
TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million of such
purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of
the next $17 million of such purchases, plus 0.25% of amounts in excess of $20
million of such purchases. See "Contingent Deferred Sales Charge Program for
Large Purchases." AIM Distributors may make payments to dealers and institutions
who are dealers of record for purchases of $1 million or more of Class A shares
(or shares which normally involve payment of initial sales charges), and which
are sold at net asset value and are not subject to a contingent deferred sales
charge, in an amount up to 0.10% of such purchases of Class A shares of AIM
LIMITED MATURITY TREASURY FUND, and in an amount up to 0.25% of such purchases
of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.

AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.

AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
are not paid on sales to investors exempt from the CDSC, including shareholders
of record on April 30, 1995 who purchase additional shares in any of the Funds
on or after May 1, 1995, and in circumstances where AIM Distributors grants an
exemption on particular transactions.

MCF-02/98
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<PAGE> 32

TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of the New York Stock Exchange ("NYSE"), which is generally 4:00 p.m.
Eastern Time (and which is hereinafter referred to as "NYSE Close") on any
business day of an AIM Fund will be confirmed at the price next determined.
Orders received after NYSE Close will be confirmed at the price determined on
the next business day of the AIM Fund. It is the responsibility of the dealer to
ensure that all orders are transmitted on a timely basis to the Transfer Agent.
Any loss resulting from the dealer's failure to submit an order within the
prescribed time frame will be borne by that dealer. Please see "How to Purchase
Shares -- Purchases by Wire" for information on obtaining a reference number for
wire orders, which will facilitate the handling of such orders and ensure prompt
credit to an investor's account. A "business day" of an AIM Fund is any day on
which the NYSE is open for business. It is expected that the NYSE will be closed
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.

An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.

SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.

CLASS A SHARES are sold subject to the initial sales charges described
above and are subject to the other fees and expenses described herein.
Class A shares of AIM MONEY MARKET FUND are designed to meet the needs of
an investor who wishes to establish a dollar cost averaging program,
pursuant to which Class A shares an investor owns may be exchanged at net
asset value for Class A shares of another Multiple Class Fund or shares of
another AIM Fund which is not a Multiple Class Fund, subject to the terms
and conditions described under the caption "Exchange Privilege -- Terms and
Conditions of Exchanges."

CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made
within the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."

Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and distributions) eight
years from the end of the calendar month in which the purchase of Class B
shares was made. Following such conversion of their Class B shares,
investors will be relieved of the higher Rule 12b-1 Plan payments
associated with Class B shares. See "Management -- Distribution Plans."

CLASS C SHARES are sold without an initial sales charge. Thus the entire
purchase price of Class C shares is immediately invested in Class C shares.
Class C shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class C shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class C shares redeemed
within one year from the date such shares were purchased are subject to a
1.00% contingent deferred sales charge. No contingent deferred sales charge
will be imposed if Class C shares are redeemed after one year from the date
such shares were purchased. Redemptions of Class C shares and associated
charges are further described under the caption "How to Redeem
Shares -- Multiple Distribution System."

AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
initial sales charge and are not subject to a contingent deferred sales
charge; however, they are subject to the other fees and expenses described
in the prospectus for AIM MONEY MARKET FUND.

TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.

MCF-02/98
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<PAGE> 33

SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND AND AIM TAX-EXEMPT CASH
FUND (THE "MONEY MARKET FUNDS"). Because each Money Market Fund uses the
amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of such funds will remain constant at $1.00 per share.
However, there is no assurance that each Money Market Fund can maintain a $1.00
net asset value per share. In order to earn dividends with respect to AIM MONEY
MARKET FUND on the same day that a purchase is made, purchase payments in the
form of federal funds must be received by the Transfer Agent before 12:00 noon
Eastern Time on that day. Purchases made by payments in any other form, or
payments in the form of federal funds received after such time but prior to NYSE
Close, will begin to earn dividends on the next business day following the date
of purchase. The Money Market Funds generally will not issue share certificates
but will record investor holdings in noncertificate form and regularly advise
the shareholder of his ownership position.

SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.

MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.

REDUCTIONS IN INITIAL SALES CHARGES

Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of shares of the AIM Funds that are
otherwise subject to an initial sales charge, provided that such purchases are
made by a "purchaser" as hereinafter defined. Purchases of Class A shares of AIM
TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY MARKET FUND and Class
B and Class C shares of the Multiple Class Funds will not be taken into account
in determining whether a purchase qualifies for a reduction in initial sales
charges.

The term "purchaser" means:

- an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the
benefit of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
Plan (unless such 403(b) plan qualifies as the purchaser as defined below);

- a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), provided that:

a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);

b. each transmittal must be accompanied by a single check or wire
transfer; and

c. all new participants must be added to the 403(b) plan by submitting
an application on behalf of each new participant with the
contribution transmittal;

- a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;

- a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), a Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or
SIMPLE IRA accounts should be linked;

- any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or

- the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").

Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by vir-

MCF-02/98
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<PAGE> 34

tue of the foregoing definition, to the reduced sales charge. No person or
entity may distribute shares of the AIM Funds without payment of the applicable
sales charge other than to persons or entities who qualify for a reduction in
the sales charge as provided herein.

(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for
(i) Class A shares of AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) within the following 13 consecutive months. By marking the LOI section on
the account application and by signing the account application, the purchaser
indicates that he understands and agrees to the terms of the LOI and is bound by
the provisions described below.

Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gains
distributions will not be applied to the LOI. At any time during the 13-month
period after meeting the original obligation, a purchaser may revise his
intended investment amount upward by submitting a written and signed request.
Such a revision will not change the original expiration date. By signing an LOI,
a purchaser is not making a binding commitment to purchase additional shares,
but if purchases made within the 13-month period do not total the amount
specified, the investor will pay the increased amount of sales charge as
described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase within the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.

To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.

If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.

(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND
and (ii) Class B and Class C shares of the Multiple Class Funds) at the time of
the proposed purchase. Rights of Accumulation are also available to holders of
the Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992. To determine
whether or not a reduced initial sales charge applies to a proposed purchase,
AIM Distributors takes into account not only the money which is invested upon
such proposed purchase, but also the value of all shares of the AIM Funds
(except for (i) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve
Shares of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the
Multiple Class Funds) owned by such purchaser, calculated at their then current
public offering price. If a purchaser so qualifies for a reduced sales charge,
the reduced sales charge applies to the total amount of money then being
invested by such purchaser and not just to the portion that exceeds the
breakpoint above which a reduced sales charge applies. For example, if a
purchaser already owns qualifying shares of any AIM Fund with a value of $20,000
and wishes to invest an additional $20,000 in a fund with a maximum initial
sales charge of 5.50%, the reduced initial sales charge of 5.25% will apply to
the full $20,000 purchase and not just to the $15,000 in excess of the $25,000
breakpoint. To qualify for obtaining the discount applicable to a particular
purchase, the purchaser or his dealer must furnish AFS with a list of the
account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.

PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and distributions from a fund
(see "Dividends,

MCF-02/98
A-7
<PAGE> 35

Distributions and Tax Matters"); (b) exchanges of shares of certain other funds
(see "Exchange Privilege"); (c) use of the reinstatement privilege (see "How to
Redeem Shares"); or (d) a merger, consolidation or acquisition of assets of a
fund.

Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.

The following persons may purchase shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM, or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholders Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; and (i) employees of
Triformis Inc.

In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined on page A-10
herein) sold at net asset value to an employee benefit plan in accordance with
this paragraph as follows: 1% of the first $2 million of such purchases, plus
0.80% of the next $1 million of such purchases, plus 0.50% of the next $17
million of such purchases, plus 0.25% of amounts in excess of $20 million of
such purchases and up to 0.10% of the net asset value of any Class A shares of
AIM LIMITED MATURITY TREASURY FUND sold at net asset value to an employee
benefit plan in accordance with this paragraph.

Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sale of Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such trusts;
and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.

MCF-02/98
A-8
<PAGE> 36

FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."

- --------------------------------------------------------------------------------

SPECIAL PLANS

Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.

Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.

SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.

Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested in shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.

Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C Shares of the Multiple Class Funds and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.

The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.

AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan each
withdrawal is made from the shareholder's bank account in the amount specified
by the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.

AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and

MCF-02/98
A-9
<PAGE> 37

Tax Matters -- Dividends and Distributions" for a description of payment dates
for these options. In order to qualify to have dividends and distributions of
one AIM Fund invested in shares of another AIM Fund, the following conditions
must be satisfied: (a) the shareholder must have an account balance in the
dividend paying fund of at least $5,000; (b) the account must be held in the
name of the shareholder (i.e., the account may not be held in nominee name); and
(c) the shareholder must have requested and completed an authorization relating
to the reinvestment of dividends into another AIM Fund. An authorization may be
given on the account application or on an authorization form available from AIM
Distributors. An AIM Fund will waive the $5,000 minimum account value
requirement if the shareholder has an account in the fund selected to receive
the dividends and distributions with a value of at least $500.

DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sales charges may apply, as described under the caption
"Exchange Privilege."

PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).

MCF-02/98
A-10
<PAGE> 38
- --------------------------------------------------------------------------------

EXCHANGE PRIVILEGE

TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds,
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.

<TABLE>
<S> <C> <C>
LOAD FUNDS: LOWER LOAD FUNDS:
---------- -----------------
AIM ADVISOR FLEX FUND -- AIM GLOBAL GROWTH AIM LIMITED MATURITY TREASURY FUND
CLASS A FUND -- CLASS A -- CLASS A
AIM ADVISOR INTERNATIONAL AIM GLOBAL INCOME AIM TAX-FREE INTERMEDIATE FUND
VALUE FUND -- CLASS A FUND -- CLASS A -- CLASS A
AIM ADVISOR LARGE CAP AIM GLOBAL UTILITIES NO LOAD FUNDS:
VALUE FUND -- CLASS A FUND -- CLASS A --------------
AIM ADVISOR MULTIFLEX AIM GROWTH FUND -- CLASS A AIM MONEY MARKET FUND
FUND -- CLASS A AIM HIGH INCOME MUNICIPAL -- AIM CASH RESERVE SHARES
AIM ADVISOR REAL ESTATE FUND -- CLASS A AIM TAX-EXEMPT CASH FUND -- CLASS A
FUND -- CLASS A AIM HIGH YIELD FUND -- CLASS A
AIM AGGRESSIVE GROWTH AIM INCOME FUND -- CLASS A
FUND -- CLASS A AIM INTERMEDIATE GOVERNMENT
AIM ASIAN GROWTH FUND -- CLASS A FUND -- CLASS A
AIM BALANCED FUND -- CLASS A AIM INTERNATIONAL EQUITY
AIM BLUE CHIP FUND -- CLASS A FUND -- CLASS A
AIM CAPITAL DEVELOPMENT AIM MONEY MARKET
FUND -- CLASS A FUND -- CLASS A
AIM CHARTER FUND -- CLASS A AIM MUNICIPAL BOND
AIM CONSTELLATION FUND -- CLASS A
FUND -- CLASS A AIM TAX-EXEMPT BOND FUND
AIM EUROPEAN DEVELOPMENT OF CONNECTICUT -- CLASS A
FUND -- CLASS A AIM VALUE FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH AIM WEINGARTEN FUND -- CLASS A
FUND -- CLASS A
</TABLE>

Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH
FUND; (II) LOWER LOAD FUND SHARE PURCHASES OF $1,000,000 OR MORE AND AIM Cash
Reserve Shares of AIM MONEY MARKET FUND and AIM TAX-EXEMPT CASH FUND PURCHASES
MAY BE EXCHANGED FOR LOAD FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH
WILL THEN BE SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR
PURPOSES OF CALCULATING THE CONTINGENT DEFERRED SALES CHARGE ON THE LOAD FUND
SHARES ACQUIRED, THE 18-MONTH PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH
EXCHANGE; (iii) Class A shares may be exchanged for Class A shares, (iv) Class B
shares may be exchanged only for Class B shares; (v) Class C shares may only be
exchanged for Class C shares; and (vi) AIM Cash Reserve Shares of AIM MONEY
MARKET FUND may not be exchanged for Class A shares of AIM MONEY MARKET FUND or
for Class B or Class C shares.

MCF-02/98
A-11
<PAGE> 39

DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:

<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD ------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
----- -------------- ----------------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable

Lower Load Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Funds..........
No Load Funds.... Offering Price if No Load shares Net Asset Value if No Net Asset Value Not Applicable Not Applicable
were directly purchased. Net Load shares were
Asset Value if No Load shares acquired upon exchange
were acquired upon exchange of of shares of any Load
shares of any Load Fund or any Fund or any Lower Load
Lower Load Fund. Fund; otherwise,
Offering Price.
Multiple Class
Funds:
Class B........ Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable

FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Net Asset Value if shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
Funds.......... acquired upon exchange of any
Load Fund. Otherwise, difference
in sales charge will apply.
No Load Funds.... Offering Price if No Load shares Net Asset Value if No Net Asset Value Not Applicable Not Applicable
were directly purchased. Net Load shares were
Asset Value if No Load shares acquired upon exchange
were acquired upon exchange of of shares of any Load
shares of any Load Fund. Fund or any Lower Load
Difference in sales charge will Fund; otherwise, Of-
apply if No Load shares were fering Price.
acquired upon exchange of Lower
Load Fund shares.
Multiple Class
Funds:
Class B........ Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C........ Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>

An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other), except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A, Class B, or Class C shares of
another Multiple Class Fund; (b) the dollar amount of the exchange must be at
least equal to the minimum investment applicable to the shares of the fund
acquired through such exchange; (c) the shares of the fund acquired through
exchange must be qualified for sale in the state in which the shareholder
resides; (d) the exchange must be made between accounts having identical
registrations and addresses; (e) the full amount of the purchase price for the
shares being exchanged must have already been received by the fund; (f) the
account from which shares have been exchanged must be coded as having a
certified taxpayer identification number on file or, in the alternative, an
appropriate Internal Revenue Service ("IRS") Form W-8 (certificate of foreign
status) or Form W-9 (certifying exempt status) must have been received by the
fund; (g) newly acquired shares (through either an initial or subsequent
investment) are held in an account for at least ten business days, and all other
shares are held in an account for at least one day, prior to the exchange; and
(h) certificates representing shares must be returned before shares can be
exchanged. There is no fee for exchanges among the AIM Funds.

THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.

THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.

Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received

MCF-02/98
A-12
<PAGE> 40

after NYSE Close will result in the redemption of shares at their net asset
value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."

In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.

EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."

EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.

EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B shares or among
Class C shares. For purposes of determining a shareholder's holding period of
Class B or Class C shares in the calculation of the applicable contingent
deferred sales charge, the period of time during which Class B or Class C shares
were held prior to an exchange will be added to the holding period of the
applicable Class B or Class C shares acquired in an exchange.

- --------------------------------------------------------------------------------

HOW TO REDEEM SHARES

Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer who has entered into an agreement with AIM Distributors. In
addition to the obligation of the fund(s) named on the cover page to redeem
shares, AIM Distributors also repurchases shares. Although a contingent deferred
sales charge may be applicable to certain redemptions, as described below, there
is no redemption fee imposed when shares are redeemed or repurchased; however,
dealers may charge service fees for handling repurchase transactions.

MULTIPLE DISTRIBUTION SYSTEM. Class B shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attrib-

MCF-02/98
A-13
<PAGE> 41
utable to Class B shares or (iii) on amounts that represent capital appreciation
in the shareholder's account above the purchase price of the Class B shares.

<TABLE>
<CAPTION>
YEAR CONTINGENT DEFERRED
SINCE SALES CHARGE AS
PURCHASE % OF DOLLAR AMOUNT
MADE SUBJECT TO CHARGE
- -------- -------------------
<S> <C>
First...................................................... 5%
Second..................................................... 4%
Third...................................................... 3%
Fourth..................................................... 3%
Fifth...................................................... 2%
Sixth...................................................... 1%
Seventh and Following...................................... None
</TABLE>

In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and distributions; third, of shares held
for more than six years from the date such shares were purchased; and fourth, of
shares held less than six years from the date such shares were purchased. The
applicable sales charge will be applied against the lesser of the current market
value of shares redeemed or their original cost.

Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).

Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from individual retirement accounts,
custodial accounts maintained pursuant to Code Section 403(b), deferred
compensation plans qualified under Code Section 457 and plans qualified under
Code Section 401 (collectively, "Retirement Plans"), (3) pursuant to a
Systematic Withdrawal Plan, provided that amounts withdrawn under such plan do
not exceed on an annual basis 12% of the value of the shareholder's investment
in Class B or Class C shares at the time the shareholder elects to participate
in the Systematic Withdrawal Plan, (4) effected pursuant to the right of a
Multiple Class Fund to liquidate a shareholder's account if the aggregate net
asset value of shares held in the account is less than the designated minimum
account size described in the prospectus of such Multiple Class Fund, (5)
effected by AIM of its investment in Class B or Class C shares and (6) of Class
C shares where such investor's dealer of record, due to the nature of the
investor's account, notifies AIM Distributors prior to the time of investment
that the dealer waives the payment otherwise payable to the dealer described in
the fifth paragraph under the caption "Terms and Conditions of Purchase of the
AIM Funds -- All Groups of AIM Funds."

Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.

Waiver category (2) above applies only to redemptions resulting from:

(i) required minimum distributions to plan participants or
beneficiaries who are age 70-1/2 or older, and only with respect to that
portion of such distributions which does not exceed 12% annually of the
participant's or beneficiary's account value in a particular AIM Fund;

(ii) in kind transfers of assets where the participant or beneficiary
notifies AIM Distributors of such transfer no later than the time such
transfer occurs;

(iii) tax-free rollovers or transfers of assets to another Retirement
Plan invested in Class B or Class C shares of one or more Multiple Class
Funds;

(iv) tax-free returns of excess contributions or returns of excess
deferral amounts; and

(v) distributions upon the death or disability (as defined in the
Code) of the participant or beneficiary.

MCF-02/98
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<PAGE> 42
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in this program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gain distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD (i) shares of any Load
Fund or AIM Cash Reserve Shares of AIM MONEY MARKET FUND which were acquired
through an exchange of shares which previously were subject to the 1% contingent
deferred sales charge will be credited with the period of time such exchanged
shares were held, and (ii) shares of any Load Fund which are subject to the 1%
contingent deferred sales charge and which were acquired through an exchange of
shares of a Lower Load Fund or a No Load Fund which previously were not subject
to the 1% contingent deferred sales charge will not be credited with the period
of time such exchanged shares were held. The charge will be waived in the
following circumstances: (1) redemptions of shares by employee benefit plans
("Plans") qualified under Sections 401 or 457 of the Code, or Plans created
under Section 403(b) of the Code and sponsored by nonprofit organizations as
defined under Section 501(c)(3) of the Code, where shares are being redeemed in
connection with employee terminations or withdrawals, and (a) the total amount
invested in a Plan is at least $1,000,000, (b) the sponsor of a Plan signs a
letter of intent to invest at least $1,000,000 in one or more of the AIM Funds,
or (c) the shares being redeemed were purchased by an employer-sponsored Plan
with at least 100 eligible employees; provided, however, that Plans created
under Section 403(b) of the Code which are sponsored by public educational
institutions shall qualify under (a), (b) or (c) above on the basis of the value
of each Plan participant's aggregate investment in the AIM Funds, and not on the
aggregate investment made by the Plan or on the number of eligible employees;
(2) redemptions of shares following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust; (3) redemptions of shares purchased at net asset value by private
foundations or endowment funds where the initial amount invested was at least
$1,000,000; (4) redemptions of shares purchased by an investor in amounts of
$1,000,000 or more where such investor's dealer of record, due to the nature of
the investor's account, notifies AIM Distributors prior to the time of
investment that the dealer waives the payments otherwise payable to the dealer
as described in the third paragraph under the caption "Terms and Conditions of
Purchase of the AIM Funds -- All Groups of AIM Funds"; and (5) pursuant to a
Systematic Withdrawal Plan, provided that amounts withdrawn under such plan do
not exceed on an annual basis 12% of the value of the shareholder's investment
in Class A shares at the time the shareholder elects to participate in the
Systematic Withdrawal Plan.

REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."

Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnerships, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.

In addition to these requirements, shareholders who have invested in a fund to
establish an IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares: (a) a statement
as to whether or not the shareholder has attained age 59-1/2; and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.

REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information; and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be gen-
MCF-02/98
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<PAGE> 43

uine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction.

EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order is
received prior to 11:30 a.m. Eastern Time, the redemption will be effective on
that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.

REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of
AIM MONEY MARKET FUND). After completing the appropriate authorization form,
shareholders may use checks to effect redemptions from AIM TAX-EXEMPT CASH FUND
and the AIM Cash Reserve Shares of AIM MONEY MARKET FUND. This privilege does
not apply to retirement accounts or qualified plans. Checks may be drawn in any
amount of $250 or more. Checks drawn against insufficient shares in the account,
against shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented to the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.

TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer's failure to
submit a request for redemption within the prescribed time frame will be borne
by that dealer. Telephone redemption requests must be made by NYSE Close on any
business day of an AIM Fund and will be confirmed at the price determined as of
the close of that day. No AIM Fund will accept requests which specify a
particular date for redemption or which specify any special conditions.

Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.

SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner; (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions; and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.

Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term is defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed

MCF-02/98
A-16
<PAGE> 44

the surety coverage amount indicated on the medallion. For information regarding
whether a particular institution or organization qualifies as an "eligible
guarantor institution," an investor should contact the Client Services
Department of AFS.

REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a redemption,
a shareholder may invest all or part of the redemption proceeds in Class A
shares of any AIM Fund at the net asset value next computed after receipt by the
Transfer Agent of the funds to be reinvested; provided, however, if the
redemption was made from Class A shares of either AIM LIMITED MATURITY TREASURY
FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be subject
to the difference in sales charge between the shares redeemed and the shares the
proceeds are reinvested in. The shareholder must ask the Transfer Agent for such
privilege at the time of reinvestment. A realized gain on the redemption is
taxable, and reinvestment may alter any capital gains payable. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in (or exchanged for) shares of another AIM Fund
at a reduced sales charge within 90 days of the payment of the sales charge, the
shareholder's basis in the fund shares redeemed may not include the amount of
the sales charge paid, thereby reducing the loss or increasing the gain
recognized from the redemption; however, the shareholder's basis in the fund
shares purchased will include the sales charge. Each AIM Fund may amend, suspend
or cease offering this privilege at any time as to shares redeemed after the
date of such amendment, suspension or cessation. This privilege may only be
exercised once each year by a shareholder with respect to each AIM Fund.

Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
90 days after such redemption may do so at net asset value if such privilege is
claimed at the time of reinvestment. Such reinvested proceeds will not be
subject to either a front-end sales charge at the time of reinvestment or an
additional contingent deferred sales charge upon subsequent redemption. In order
to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.

- --------------------------------------------------------------------------------

DETERMINATION OF NET ASSET VALUE

The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND), on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
determining net asset value per share, futures and options contracts generally
will be valued 15 minutes after the close of trading of the NYSE.The net asset
value per share is calculated by subtracting a class' liabilities from its
assets and dividing the result by the total number of class shares outstanding.
The determination of net asset value per share is made in accordance with
generally accepted accounting principles. Among other items, liabilities include
accrued expenses and dividends payable, and total assets include portfolio
securities valued at their market value, as well as income accrued but not yet
received. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the supervision of
the fund's officers and in accordance with methods which are specifically
authorized by its governing Board of Directors or Trustees. Short-term
obligations with maturities of 60 days or less, and the securities held by the
Money Market Funds, are valued at amortized cost as reflecting fair value. AIM
HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate securities
that have an unconditional demand or put feature exercisable within seven days
or less at par, which reflects the market value of such securities.

Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund.

MCF-02/98
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<PAGE> 45

- --------------------------------------------------------------------------------

DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS

DIVIDENDS AND DISTRIBUTIONS

Each AIM Fund's policy regarding the payment of dividends and distributions is
set forth below.

<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
---- -------------- ------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND..................... declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND...... declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.......... declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND.............. declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND..................... declared and paid annually annually annually
AIM BALANCED FUND......................... declared and paid quarterly annually annually
AIM BLUE CHIP FUND........................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND.............. declared and paid annually annually annually
AIM CHARTER FUND.......................... declared and paid quarterly annually annually
AIM CONSTELLATION FUND.................... declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND............. declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND......... declared and paid annually annually annually
AIM GLOBAL GROWTH FUND.................... declared and paid annually annually annually
AIM GLOBAL INCOME FUND.................... declared daily; paid monthly annually annually
AIM GLOBAL UTILITIES FUND................. declared daily; paid monthly annually annually
AIM GROWTH FUND........................... declared and paid annually annually annually
AIM HIGH INCOME MUNICIPAL FUND............ declared daily; paid monthly annually annually
AIM HIGH YIELD FUND....................... declared daily; paid monthly annually annually
AIM INCOME FUND........................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.......... declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND............. declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND........ declared daily; paid monthly annually annually
AIM MONEY MARKET FUND..................... declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND................... declared daily; paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.................. declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND............ declared daily; paid monthly annually annually
AIM VALUE FUND............................ declared and paid annually annually annually
AIM WEINGARTEN FUND....................... declared and paid annually annually annually
</TABLE>

In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods.

All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.

Dividends on Class B and Class C shares are expected to be lower than those
for Class A shares or AIM Cash Reserve Shares because of higher distribution
fees paid by Class B and Class C shares. Dividends on all shares may also be
affected by other class-specific expenses.

Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such

MCF-02/98
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<PAGE> 46

payment. Any dividend and distribution election remains in effect until the
Transfer Agent receives a revised written election by the shareholder.

Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.

TAX MATTERS

Each AIM Fund has qualified and intends to qualify for treatment as a
regulated investment company under Subchapter M of the Code. As long as a fund
qualifies for this tax treatment, it is not subject to federal income taxes on
net investment income and capital gains that are distributed to shareholders.
Each fund, for purposes of determining taxable income, distribution requirements
and other requirements of Subchapter M, is treated as a separate corporation.
Therefore, no fund may offset its gains against another fund's losses and each
fund must individually comply with all of the provisions of the Code which are
applicable to its operations.

TAX TREATMENT OF DISTRIBUTIONS -- GENERAL. Because each AIM Fund intends to
distribute substantially all of its net investment income and net realized
capital gains to its shareholders, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid the imposition of a
non-deductible 4% excise tax calculated as a percentage of certain undistributed
amounts of taxable ordinary income and capital gain net income. Nevertheless,
shareholders normally are subject to federal income taxes, and any applicable
state and local income taxes, on the dividends and distributions received by
them from a fund whether in the form of cash or additional shares of a fund,
except for tax-exempt dividends paid by AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT
CASH FUND, and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt Funds") which are
exempt from federal tax. Dividends paid by a fund (other than capital gain
distributions) may qualify for the federal 70% dividends received deduction for
corporate shareholders to the extent of the qualifying dividends received by the
fund on domestic common or preferred stock. It is not likely that dividends
received from AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE
FUND, AIM ASIAN GROWTH FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL
AGGRESSIVE GROWTH FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND or AIM TAX-FREE INTERMEDIATE FUND will
qualify for this dividends received deduction. Shortly after the end of each
year, shareholders will receive information regarding the amount and federal
income tax treatment of all distributions paid during the year. Certain
dividends declared in October, November or December of a calendar year are
taxable to shareholders as though received on December 31 of that year if paid
to shareholders during January of the following calendar year. No gain or loss
will be recognized by shareholders upon the automatic conversion of Class B
shares of a Multiple Class Fund into Class A shares of such Fund. With respect
to tax-exempt shareholders, distributions from the Funds will not be subject to
federal income taxation to the extent permitted under the applicable tax-
exemption.

For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.

TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A FUND MUST
FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER
PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT
SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.

Under existing provisions of the Code, nonresident alien individuals, foreign
partnerships and foreign corporations may be subject to federal income tax
withholding at a 30% rate on ordinary income dividends and distributions (other
than exempt-interest dividends and capital gain dividends) and return of capital
distributions. Under applicable treaty law, residents of treaty countries may
qualify for a reduced rate of withholding or a withholding exemption.

DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE OR LOCAL TAX
LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES DISCUSSED HEREIN.
ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE STATEMENT OF ADDITIONAL
INFORMATION.

TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may give rise to a federal alternative minimum tax liability, may
affect the amount of social security benefits subject to federal income tax, may
affect the deductibility of interest on certain indebtedness of the shareholder,
and may have other collateral federal income tax consequences. The Tax-Exempt
Funds may invest in Municipal Securities the interest on which will constitute
an item of tax preference and which therefore could give rise to a federal
alternative minimum tax liability for shareholders, and may invest up to 20% of
their net assets in such securities and

MCF-02/98
A-19
<PAGE> 47

other taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.

The Tax-Exempt Funds may pay dividends to shareholders which are taxable, but
will endeavor to avoid investments which would result in taxable dividends. The
percentage of dividends which constitute exempt-interest dividends, and the
percentage thereof (if any) which constitute an item of tax preference, will be
determined annually. This percentage may differ from the actual percentages for
any particular day.

To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional shares.
Distributions of net long-term capital gains will be taxable as long-term
capital gains, whether received in cash or additional shares, and regardless of
the length of time a particular shareholder may have held his shares.

From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.

AIM INTERMEDIATE GOVERNMENT FUND and AIM LIMITED MATURITY TREASURY
FUND -- SPECIAL TAX INFORMATION. Certain states exempt from state income taxes
dividends paid by mutual funds out of interest on U.S. Treasury and certain
other U.S. Government obligations, and investors should consult with their own
tax advisors concerning the availability of such exemption.

AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND AND AIM GLOBAL UTILITIES
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to shareholders credits for
foreign taxes paid. If the fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders, and should note that if
such losses exceed other income during a taxable year, the fund would not be
able to pay ordinary income dividends.

- --------------------------------------------------------------------------------

GENERAL INFORMATION

CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Texas Commerce Bank
National Association, P.O. Box 2558, Houston, Texas 77252-8084, serves as
Sub-Custodian for retail purchases of the AIM Funds.

A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.

LEGAL COUNSEL. The law firm of Ballard Spahr Andrews & Ingersoll, LLP,
Philadelphia, Pennsylvania, serves as counsel to the AIM Funds and passes upon
legal matters.

SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.

YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish between the year 2000 from the year 1900.
This defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers provide the AIM Funds
and their shareholders.

To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.

MCF-02/98
A-20
<PAGE> 48

OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.

MCF-02/98
A-21
<PAGE> 49

APPENDIX A
- --------------------------------------------------------------------------------

DESCRIPTION OF CORPORATE BOND RATINGS

Investment grade debt securities are those rating categories indicated by an
asterisk (*).

MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS ARE AS FOLLOWS:

*Aaa -- Bonds which are rated 'Aaa' are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

*Aa -- Bonds which are rated 'Aa' are judged to be of high quality by all
standards. Together with the 'Aaa' group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in 'Aaa' securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in 'Aaa'
securities.

*A -- Bonds which are rated 'A' possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

*Baa -- Bonds which are rated 'Baa' are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Ba -- Bonds which are rated 'Ba' are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during other good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B -- Bonds which are rated 'B' generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa -- Bonds which are rated 'Caa' are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca -- Bonds which are rated 'Ca' represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C -- Bonds which are rated 'C' are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from 'Aa' through 'B' in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

STANDARD AND POOR'S RATINGS SERVICES CLASSIFICATIONS ARE AS FOLLOWS:

*AAA -- Debt rated 'AAA' has the highest rating assigned by Standard & Poor's
("S&P"). Capacity to pay interest and repay principal is extremely strong.

*AA -- Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

*A -- Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

*BBB -- Debt rated 'BBB' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher categories.

BB, B, CCC, CC, C -- Debt rated 'BB', 'B', 'CCC', 'CC' and 'C' is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. 'BB'
indicates the lowest degree of speculation and 'C' the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

A-22
<PAGE> 50

BB -- Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.

B -- Debt rated 'B' has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The 'B' rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
'BB' or 'BB-' rating.

CCC -- Debt rated 'CCC' has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The 'CCC' rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
'B' or 'B-' rating.

CC -- The rating 'CC' is typically applied to debt subordinated to senior debt
that is assigned an actual or implied 'CCC' rating.

C -- The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.

C1 -- The rating 'C1' is reserved for income bonds on which no interest is
being paid.

D -- Debt rated 'D' is in payment default. The 'D' rating category is used
when interest payments or principal or principal payments are not made on the
date due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The 'D'
rating also will be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.

PLUS (+) OR MINUS (-): The rating from 'AA' to 'CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
categories.

A-23
<PAGE> 51

APPENDIX B
- --------------------------------------------------------------------------------

DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED BY
U.S. GOVERNMENT AGENCIES OR INSTRUMENTALITIES

The following list includes certain common securities, issued or guaranteed by
U.S. Government Agencies or Instrumentalities and does not purport to be
exhaustive.

EXPORT-IMPORT BANK CERTIFICATES -- are certificates of beneficial interest and
participation certificates issued and guaranteed by the Export-Import Bank of
the United States.

FEDERAL FARM CREDIT SYSTEM NOTES AND BONDS -- are bonds issued by a
cooperatively owned, nationwide system of banks and associations supervised by
the Farm Credit Administration, an independent agency of the U.S. Government.

FEDERAL HOME LOAN BANK NOTES AND BONDS -- are notes and bonds issued by the
Federal Home Loan Bank System.

FHA DEBENTURES -- are debentures issued by the Federal Housing Authority of
the U.S. Government.

FHA INSURED NOTES -- are bonds issued by the Farmers Home Administration of
the U.S. Government.

FEDERAL HOME LOAN MORTGAGE CORPORATION ("FHLMC") BONDS -- are bonds issued and
guaranteed by FHLMC, a corporate instrumentality of the U.S. Government. The
Federal Home Loan Banks own all the capital stock of FHLMC, which obtains its
funds by selling mortgages (as well as participation interests in the mortgages)
and by borrowing funds through the issuance of debentures and otherwise.

FHLMC PARTICIPATION CERTIFICATES OR "FREDDIE MACS" -- represent undivided
interests in specified groups of conventional mortgage loans (and/or
participation interests in those loans) underwritten and owned by FHLMC. At
least 95% of the aggregate principal balance of the whole mortgage loans and/or
participations in a group formed by FHLMC typically consists of single-family
mortgage loans, and not more than 5% consists of multi-family loans. FHLMC
Participation Certificates are not guaranteed by, and do not constitute a debt
or obligation of, the U.S. Government or any Federal Home Loan Bank. FHLMC
Participation Certificates are issued in fully registered form only, in original
unpaid principal balances of $25,000, $100,000, $200,000, $500,000, $1 million
and $5 million. FHLMC guarantees to each registered holder of a Participation
Certificate, to the extent of such holder's pro rata share (i) the timely
payment of interest accruing at the applicable certificate rate on the unpaid
principal balance outstanding on the mortgage loans, and (ii) collection of all
principal on the mortgage loans without any offset or deductions. Pursuant to
these guaranties, FHLMC indemnifies holders of Participation Certificates
against any reduction in principal by reason of charges for property repairs,
maintenance, and foreclosure.

FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA") BONDS -- are bonds issued and
guaranteed by FNMA, a federally chartered and privately-owned corporation.

FNMA PASS-THROUGH CERTIFICATES OR "FANNIE MAES" -- are mortgage pass-through
certificates issued and guaranteed by FNMA. FNMA Certificates represent a
fractional undivided ownership interest in a pool of mortgage loans either
provided from FNMA's own portfolio or purchased from primary lenders. The
mortgage loans included in the pool are conventional, insured by the Federal
Housing Administration or guaranteed by the Veterans Administration. FNMA
Certificates are not backed by, nor entitled to, the full faith and credit of
the U.S. Government.

Loans not provided from FNMA's own portfolio are purchased only from primary
lenders that satisfy certain criteria developed by FNMA, including depth of
mortgage origination experience, servicing experience and financial capacity.
FNMA may purchase an entire loan pool from a single lender, and issue
Certificates backed by that loan pool alone, or may package a pool made up of
loans purchased from various lenders.

Various types of mortgage loans, and loans with varying interest rates, may be
included in a single pool, although each pool will consist of mortgage loans
related to one-family or two-to-four family residential properties.
Substantially all FNMA mortgage pools currently consist of fixed interest rate
and growing equity mortgage loans, although FNMA mortgage pools may also consist
of adjustable interest rate mortgage loans or other types of mortgage loans.
Each mortgage loan must conform to FNMA's published requirements or guidelines
with respect to maximum principal amount, loan-to-value ratio, loan term,
underwriting standards and insurance coverage.

All mortgage loans are held by FNMA as trustee pursuant to a trust indenture
for the benefit of Certificate holders. The trust indenture gives FNMA
responsibility for servicing and administering the loans in a pool. FNMA
contracts with the lenders or other servicing institutions to perform all
services and duties customary to the servicing of mortgages, as well as duties
specifically prescribed by FNMA, all under FNMA supervision. FNMA may remove
service providers for cause.

The pass-through rate on FNMA Certificates is the lowest annual interest rate
borne by an underlying mortgage loan in the pool, less a fee to FNMA as
compensation for servicing and for FNMA's guarantee. Lenders servicing the
underlying mortgage loans receive as compensation a portion of the fee paid to
FNMA, the excess yields on pooled loans with coupon rates above the lowest rate
borne by any mortgage loan in the pool and certain other amounts collected, such
as late charges.

A-24
<PAGE> 52

The minimum size of a FNMA pool is $1 million of mortgage loans. Registered
holders purchase Certificates in amounts not less than $25,000.

FNMA Certificates are marketed by the servicing lender banks, usually through
securities dealers. The lender of a single lender pool typically markets all
Certificates based on that pool, and lenders of multiple lender pools market
Certificates based on a pro rata interest in the aggregate pool. The amount of
FNMA Certificates currently outstanding is limited.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA") CERTIFICATES OR "GINNIE
MAES" -- are mortgage-backed securities which represent a partial ownership
interest in a pool of mortgage loans issued by lenders such as mortgage bankers,
commercial banks and savings and loan associations. Each mortgage loan included
in the pool is either insured by the Federal Housing Administration or
guaranteed by the Veterans Administration. A "pool" or group of such mortgages
is assembled, and, after being approved by GNMA, is offered to investors through
securities dealers. GNMA is a U.S. Government corporation within the Department
of Housing and Urban Development.

GNMA Certificates differ from bonds in that the principal is paid back monthly
by the borrower over the term of the loan rather than returned in a lump sum at
maturity. GNMA Certificates are called "modified pass-through" securities
because they entitle the holder to receive its proportionate share of all
interest and principal payments owed on the mortgage pool, net of fees paid to
the issuer and GNMA, regardless of whether or not the mortgagor actually makes
the payment. Payment of principal of and interest on GNMA Certificates of the
"modified pass-through" type is guaranteed by GNMA and backed by the full faith
and credit of the U.S. Government.

The average life of a GNMA Certificate is likely to be substantially less than
the original maturity of the mortgage pools underlying the securities.
Prepayments of principal by mortgagors and mortgage foreclosures will usually
result in the return on the greater part of principal invested far in advance of
the maturity of the mortgages in the pool. Foreclosures impose little risk to
principal investment because of the GNMA guarantee.

As the prepayment rates of individual mortgage pools will vary widely, it is
not possible to accurately predict the average life of a particular issue of
GNMA Certificates. However, statistics published by the Federal Housing
Authority indicate that the average life of a single-family dwelling mortgage
with 25- to 30-year maturity, the type of mortgage which backs the vast majority
of GNMA Certificates, is approximately 12 years. It is therefore customary
practice to treat GNMA Certificates as 30-year mortgage-backed securities which
prepay fully in the twelfth year.

As a consequence of the fees paid to GNMA and the issuer of GNMA Certificates,
the coupon rate of interest of GNMA Certificates is lower than the interest paid
on the VA-guaranteed or FHA-insured mortgages underlying the Certificates.

The yield which will be earned on GNMA Certificates may vary from their coupon
rates for the following reasons: (i) Certificates may be issued at a premium or
discount, rather than at par; (ii) Certificates may trade in the secondary
market at a premium or discount after issuance; (iii) interest is earned and
compounded monthly which has the effect of raising the effective yield earned on
the Certificates; and (iv) the actual yield of each Certificate is affected by
the prepayment of mortgages included in the mortgage pool underlying the
Certificates and the rate at which principal so prepaid is reinvested. In
addition, prepayment of mortgages included in the mortgage pool underlying a
GNMA Certificate purchased at a premium may result in a loss to the Fund.

Due to the large amount of GNMA Certificates outstanding and active
participation in the secondary market by securities dealers and investors, GNMA
Certificates are highly liquid instruments. Prices of GNMA Certificates are
readily available from securities dealers and depend on, among other things, the
level of market rates, the Certificate's coupon rate and the prepayment
experience of the pool of mortgages backing each Certificate.

GENERAL SERVICES ADMINISTRATION ("GSA") PARTICIPATION CERTIFICATES -- are
participation certificates issued by the General Services Administration of the
U.S. Government.

MARITIME ADMINISTRATION BONDS -- are bonds issued and provided by the
Department of Transportation of the U.S. Government.

NEW COMMUNITIES DEBENTURES -- are debentures issued in accordance with the
provisions of Title IV of the Housing and Urban Development Act of 1968, as
supplemented and extended by Title VII of the Housing and Urban Development Act
of 1970, the payment of which is guaranteed by the U.S. Government.

PUBLIC HOUSING NOTES AND BONDS -- are short-term project notes and long-term
bonds issued by public housing and urban renewal agencies in connection with
programs administered by the Department of Housing and Urban Development of the
U.S. Government, the payment of which is secured by the U.S. Government.

SBA DEBENTURES -- are debentures fully guaranteed as to principal and interest
by the Small Business Administration of the U.S. Government.

SLMA DEBENTURES -- are debentures backed by the Student Loan Marketing
Association.

TITLE XI BONDS -- are bonds issued in accordance with the provisions of Title
XI of the Merchant Marine Act of 1936, as amended, the payment of which is
guaranteed by the U.S. Government.

WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY BONDS -- are bonds issued by
the Washington Metropolitan Area Transit Authority and are guaranteed by the
Secretary of Transportation of the U.S. Government.

A-25
<PAGE> 53
APPLICATION INSTRUCTIONS

SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
GIVE SOCIAL SECURITY GIVE TAXPAYER I.D.
ACCOUNT TYPE NUMBER OF: ACCOUNT TYPE NUMBER OF:
<S> <C> <C> <C>
Individual Individual Trust, Estate, Pension Trust, Estate, Pension
Plan Trust Plan Trust and not
personal TIN of fiduciary

Joint Individual First individual listed in the
"Account Registration" portion
of the Application

Unif. Gifts to Minor Corporation, Partnership, Corporation, Partnership,
Minors/Unif.
Transfers to Minors Other Organization Other Organization

Legal Guardian Ward, Minor or
Incompetent

Sole Proprietor Owner of Business Broker/Nominee Broker/Nominee
</TABLE>

- --------------------------------------------------------------------------------

Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.

BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.

An investor is subject to backup withholding if:

(1) the investor fails to furnish a correct TIN to the Fund, or

(2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or

(3) the investor is notified by the IRS that the investor is subject to backup
withholding because the investor failed to report all of the interest and
dividends on such investor's tax return (for reportable interest and
dividends only), or

(4) the investor fails to certify to the Fund that the investor is not subject
to backup withholding under (3) above (for reportable interest and
dividend accounts opened after 1983 only), or

(5) the investor does not certify his TIN. This applies only to reportable
interest, dividend, broker or barter exchange accounts opened after 1983,
or broker accounts considered inactive during 1983.

Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.

Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:

- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947

Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.

IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.

MCF-02/98
B-1
<PAGE> 54
NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."

SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").

SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").

MCF-02/98
B-2
<PAGE> 55

[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--

Investment Advisor
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173

Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, Texas 77210-4739

Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739

Independent Accountants
KPMG Peat Marwick LLP
700 Louisiana
Houston, TX 77002

For more complete information about any other Fund in The AIM
Family of Funds--Registered Trademark--, including charges and expenses,
please call (800) 347-4246 or write to A I M Distributors, Inc. and
request a free prospectus. Please read the prospectus carefully before you
invest or send money.

GLO-PRO-1