<PAGE> 1
AIM INTERNATIONAL
EQUITY FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT APRIL 30, 1998
<PAGE> 2
------------------------------------------
AIM INTERNATIONAL EQUITY FUND
For shareholders who seek
long-term growth of capital.
The Fund invests in
a diversified portfolio
of international equity securities
of companies with strong
earnings momentum.
------------------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM International Equity Fund's performance figures are historical and
reflect reinvestment of all distributions and changes in net asset value.
Unless otherwise indicated, the Fund's performance is computed without a
sales charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund's Class B and Class C shares will differ from
that of Class A shares due to differing fees and expenses.
o Because Class C shares have been offered for less than one year (since
8/4/97), all total return figures for Class C shares reflect cumulative
total return that has not been annualized.
o The Fund's average annual total returns, including sales charges, for
periods ended 3/31/98 (the most recent calendar quarter-end) are as follows:
For Class A shares, one year, 14.55%; five years, 15.56%; since inception
4/7/92, 14.91%. For Class B shares, one year, 15.28%; since inception
9/15/94, 12.25%. For C shares, cumulative total return since inception
8/4/97, 5.29%.
o The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any particular security.
o Past performance cannot guarantee comparable future results.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o International investing presents certain risks not associated with investing
solely in the U.S. These include risks relating to fluctuations in the value
of the U.S. dollar relative to the value of other currencies, the custody
arrangements made for the Fund's foreign holdings, differences in
accounting, political risks, and the lesser degree of public information
required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor. The unmanaged Lipper International Fund Index represents an average
of the performance of the 30 largest international mutual funds.
o The Europe, Australia, and Far East Index (EAFE) is a group of unmanaged
foreign securities tracked by Morgan Stanley Capital International.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE
FDIC OR ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK OR ANY AFFILIATE;
AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
The Chairman's Letter
Dear Fellow Shareholder:
Last October, equity markets worldwide had just been shaken
[PHOTO OF by the currency crisis in Southeast Asia. By the April 30,
Charles T. 1998, end of this reporting period, most markets had
Bauer, recovered nicely, with domestic equities reaching new highs
Chairman of and European markets outdoing even the U.S.'s heady pace.
the Board of Only Asian markets remained in the doldrums. Bonds have
THE FUND turned in a solid performance with generous real returns,
APPEARS HERE] though not as spectacular as some had predicted when the
Asian crisis first broke.
However, by the close of this reporting period, many
market participants were uneasy. Some participants fretted
about signs of speculative fever, particularly in U.S. stock
markets, where equity prices continued to rise despite
evidence that earnings growth, especially for larger
companies, had slowed considerably. The growth of European
markets also exceeded everyone's expectations, and some
wondered how long the rise could continue. All were aware that the Asian story
was not yet completed, and no one was certain how serious its ultimate impact
would be.
Of course, bull markets do end, and markets became less ebullient shortly
after this reporting period closed. For investors, the best course is to remain
realistic and ready. A well-diversified portfolio is still one of the most
effective tools for coping with shifts in a market's direction because different
asset classes and different national markets tend to move independently of one
another. Of course, your financial consultant remains your best source of
information about how to allocate your investments based on your particular
goals and situation.
AIM FURTHER DIVERSIFIES ITS OFFERINGS
Shortly after the close of this reporting period, AIM broadened its offerings to
shareholders through the addition of the GT Global group of mutual funds. During
the next few months you will be receiving more details about this transaction
and the products it adds to The AIM Family of Funds--Registered Trademark--.
In addition to making a more varied group of investments available to our
shareholders, this transaction helps strengthen AIM's position as a major
participant in the money-management industry worldwide. Such strength will
enable us to continue expanding both the scope of our fund offerings and our
menu of services for our shareholders.
YOUR FUND MANAGERS COMMENT
On the pages that follow, the managers of your AIM Fund discuss how the Fund
performed during the six months covered by this report and give their near-term
market outlook. We hope you will find their discussion informative.
We are pleased to send you this report on your fund. If you have any
questions or comments, please contact our Client Services department at
800-959-4246 or visit our Web site at www.aimfunds.com. You can access
information about your account on our Web site and also on our automated AIM
Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
--------------------------
Despite recent activities,
the fiscal year
ended October 31
brought domestic equity investors
excellent returns
--------------------------
<PAGE> 4
The Managers' Overview
EUROPEAN MARKETS CONTINUE TO DOMINATE
INTERNATIONAL EQUITIES
A roundtable discussion with the Fund management team for AIM International
Equity Fund about the six-month reporting period ended April 30, 1998.
- --------------------------------------------------------------------------------
---------------------------
The impressive performance by
European stocks was the story among
international equities during the past
six months.
---------------------------
Q. HOW DID THE FUND PERFORM DURING THE SIX-MONTH REPORTING PERIOD?
A. The Fund posted another impressive period of performance. Total return was
17.27% for Class A shares, 16.78% for Class B shares, and 16.84% for Class C
shares for the six-month period ended April 30, 1998. The Fund's performance
surpassed both the Morgan Stanley Capital International (MSCI) Europe,
Australia and Far East Index (EAFE) of foreign stocks gain of 15.44% during
the reporting period and the Lipper International Fund Index advance of
16.53%.
================================================================================
FUND OUTPERFORMED BENCHMARKS
- --------------------------------------------------------------------------------
Cumulative Total Returns for period
10/31/97-4/30/98
17.27% 16.84% 16.78% 16.53% 15.44%
AIM Fund AIM Fund AIM Fund Lipper MSCI
Class A Class C Class B Int'l EAFE
shares shares shares Index Index
================================================================================
Q. WHAT ACCOUNTED FOR THE FUND'S STRONG PERFORMANCE DURING THE PAST SIX MONTHS?
A. The impressive performance by European stocks was the story among
international equities during the past six months. European markets
continued to rise dramatically as markets there comprised all of the 10
top-performing international markets during the six-month period ended April
30, 1998. Spain led the way with an astounding 54.57% return, followed by
Portugal with a 52.89% advance. Furthermore, all of the Fund's top 10
holdings were European companies. Almost 75% of the Fund's portfolio was
invested in European equities at the end of the reporting period, a figure
that is unlikely to increase.
Q. WHY DID EUROPEAN MARKETS PERFORM SO WELL DURING THE REPORTING PERIOD?
A. The European Economic and Monetary Union, or EMU, is scheduled to begin on
January 1, 1999. In order to qualify for the EMU, European nations must
adopt strict budgetary guidelines and improve their finances. This process
has lowered interest rates and kept inflation - the thief of wealth - at
bay. With 11 countries expected to join the EMU next year, this economic
restructuring has triggered a bull market never before seen in Europe.
Q. WERE THERE ANY OTHER FACTORS DRIVING THE EUROPEAN MARKETS?
A. We believe there were four fundamental, long-term themes that fueled this
incredible rally in Europe: privatization of state-run companies, increased
economic freedoms in Eastern Europe, corporate restructuring, and the growth
of investing in European markets.
Many state-run companies and industries have moved into private hands,
such as Telecom Italia S.p.A. and Portugal Telecom, two large holdings in
the Fund's portfolio. Additionally, the economic freedoms in Eastern Europe
have created a new market of consumers and sparked a wave of entrepreneurial
efforts in the former Communist Bloc countries. Once capitalism is planted
it can grow very quickly, and we have seen this since the fall of the Berlin
Wall.
The restructuring by "Corporate Europe" has made companies leaner and
more globally competitive. We have seen immediate results of this
restructuring as European earnings growth continued to be strong during the
reporting period. Finally, thousands of Europeans have discovered the
wonders of investing in equities. As money has flowed into European markets,
the markets themselves have become larger and more liquid than ever before.
Q. HOW WAS THE FUND'S ASSETS DISTRIBUTED THROUGHOUT THE REST OF THE WORLD?
A. With approximately three-quarters of the Fund now positioned in Europe,
there's not much else to spread around the globe. The Fund finished the
reporting period with 7.4% of its net assets in Japan, 4.0% in Asia and
Australia, and 7.7% in Latin America. These three regions were decimated by
the "Asian Flu" last fall and have been slow to recover. In the first
quarter, many of the Asian markets did bounce off their bottoms, some as
much as 40%, but keep in mind they were coming off very low levels. What
occurred in the last quarter of 1997 was devastating to those fragile
emerging markets, and we
See important Fund & index disclosures inside front cover.
2
<PAGE> 5
PORTFOLIO COMPOSITION
As of 4/30/98, based on total net assets
<TABLE>
<CAPTION>
====================================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 COUNTRIES TOP 10 INDUSTRIES
<S> <C> <C> <C> <C> <C>
1. Renault S.A. (France) 1.50% 1. France 16.59% 1. Banks (Major Regional) 12.47%
2. Nokia Oyj A.B. (Finland) 1.18 2. United Kingdom 14.09 2. Telecommunications (Cellular/Wireless) 5.65
3. Alcatel Alsthom (France) 1.12 3. Germany 7.43 3. Telephone 5.59
4. Telecom Italia Mobile S.p.A. (Italy) 1.10 4. Japan 7.39 4. Manufacturing (Diversified) 4.57
5. Nestle S.A. (Switzerland) 1.10 5. Switzerland 5.63 5. Services (Commercial & Consumer) 3.98
6. Novo Nordisk A/S-Class B (Denmark) 1.08 6. Canada 5.12 6. Computers (Software & Services) 3.82
7. Endesa S.A. (Spain) 1.07 7. Italy 4.91 7. Automobiles 3.77
8. Cap Gemini S.A. (France) 1.05 8. Netherlands 4.44 8. Insurance (Multi-line) 3.61
9. Telecom Italia S.p.A. (Italy) 1.04 9. Spain 3.94 9. Foods 3.24
10. Portugal Telecom S.A. (Portugal) 1.04 10. Mexico 3.00 10. Oil & Gas (Refining & Marketing) 2.96
Please keep in mind that the Fund's portfolio is subject to change and there is no assurance
the Fund will continue to hold any particular security.
====================================================================================================================================
</TABLE>
believe it's going to take quite some time for Asia to recover fully from
the economic crisis of last autumn.
Q. WHY IS JAPAN IN SUCH AN ECONOMIC MALAISE?
A. Although it seems apparent to the rest of the world that real economic
reform is needed in Japan, the Japanese government has been extremely
reluctant to institute any fiscal stimulus or tax cuts to get their economy
moving. Until the government takes some real action to jump-start the
economy, there is no real reason to be significantly weighted in Japan. We
continue to own recognizable Japanese companies such as Honda Motor Company
and Sony Corp., but the Japanese market has significantly underperformed
================================================================================
MORNINGSTAR RATINGS (CLASS A SHARES)
As of 4/30/98
- --------------------------------------------------------------------------------
AIM Int'l Funds in
Equity Fund International
Period Rating Category
- --------------------------------------------------------------------------------
Overall **** N/A
5 Years **** 326
3 Years **** 740
================================================================================
*Morningstar proprietary ratings reflect risk-adjusted performance through April
30, 1998. The ratings are subject to change every month. Ratings are calculated
from the funds' three-, five-, and 10-year returns (with fee adjustments) in
excess of 90-day Treasury bill returns, and a risk factor that reflects
performance below 90-day T-bill returns. If a fund scores in the top 10% of its
rating category it earns five stars, the next 22.5% receive four stars, the
middle 35% receive three stars, the next 22.5% receive two stars, and the bottom
10% receive one star.
================================================================================
the rest of the world for some time now. The Japanese market was off more
than 10% during the reporting period.
Q. IN WHICH INDUSTRIES WAS THE FUND POSITIONED?
A. The Fund's largest industry position was major regional banks with almost
12.5% of net assets. Although one may not think of banking as a growth
industry, we have seen excellent earnings growth in this industry,
especially in Europe. Banking positions owned by the Fund included the Royal
Bank of Canada, Switzerland's Credit Suisse Group, and France's Societe
Generale.
To no one's surprise during this age of communication breakthroughs, the
telecommunications sector demonstrated strong earnings during the reporting
period and commanded over 10% of the Fund's portfolio. The Fund was
attracted to such wireless telecommunications companies as Finland's Nokia
Oyj A.B. and Telecom Italia Mobile S.p.A. Finally, automobile companies
comprised almost 4% of the portfolio with the French automaker Renault S.A.
having the honor of being the Fund's largest single holding at 1.50% of the
portfolio's assets.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND IN THE NEAR TERM?
A. We are still very positive on Europe, and very cautious on the Pacific Rim.
Conditions worldwide remain very good for equities, although it is
unrealistic to expect continued equity returns of 20% or more. Things may
continue to worsen in Asia before those markets experience a recovery, so we
do not anticipate our Asian weightings to increase any time soon. In Europe,
though, we believe there will continue to be faster earnings growth with
better valuations than in the United States, because Europe's cash-to-price
earnings, price-to-book, price-to-dividend, and P/E ratios all are lower
than in the U.S. The economic outlook in Latin America seems positive as
well, although the markets there struggled during the six-month reporting
period.
The economic indicators in the U.S. remain positive, and that is good
for markets around the world because they often take their lead from the
U.S. As long as we continue to see the combination of low inflation and low
interest rates around the globe, the short-term outlook for global equities
will remain promising.
------------------
In Europe we believe there will
continue to be faster earnings growth
with better valuations than in
the United States.
------------------
See important Fund & index disclosures inside front cover.
3
<PAGE> 6
Long-Term Performance
AIM INTERNATIONAL EQUITY FUND CLASS A SHARES VS. BENCHMARK INDEXES
The chart below compares your Fund to benchmark indexes. It is intended to give
you a general idea of how your Fund performed compared to the stock market over
the period 4/7/92 to 4/30/98. It is important to understand the difference
between your Fund and an index. Your Fund's total return includes sales charges,
expenses, and management fees. An index measures the performance of hypothetical
portfolios, in this case the MSCI Europe, Australia, and Far East Index and the
Lipper International Fund Index. Unlike your Fund, these indexes are not
managed; therefore, there are no sales charges, expenses, or fees. You cannot
invest in an index. But if you could buy all the securities that make up a
particular index, you would incur expenses that would affect the return on your
investment.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 4/30/98, including sales charges
CLASS A SHARES
Inception (4/7/92) 14.97%
5 years 14.82
1 year 16.50
CLASS B SHARES
Inception (9/15/94) 12.39%
1 year 17.27
CLASS C SHARES
Inception (8/4/97) 6.77%*
*Total return provided is cumulative total return that has not been annualized.
================================================================================
GROWTH OF A $10,000 INVESTMENT
- --------------------------------------------------------------------------------
AIM INTERNATIONAL LIPPER MSCI EUROPE,
EQUITY FUND, INTERNATIONAL AUSTRALIA, AND
CLASS A SHARES FUND INDEX FAR EAST INDEX
- --------------------------------------------------------------------------------
(In Thousands)
4/92 9454 10000 10000
4/93 11044 11158.5 12219
4/94 13993 13809.4 14250
4/95 14146 13647.9 15046
4/96 17484 16011 16763.9
4/97 8916 17496.9 16616
4/98 23293 21265.4 19756.8
Past performance is no guarantee of comparable future results.
================================================================================
Your Fund's total return includes sales charges, expenses, and management fees.
The performance of the Fund's Class B and Class C shares will differ from Class
A shares due to differing fees and expenses. For Fund performance calculations
and descriptions of indexes cited on this page, please refer to the inside front
cover. Source:Towers Data Systems Hypo--Registered Trademark--
<PAGE> 7
For Consideration
THE ROTH IRA: THE POWER TO KEEP MORE
Contribute After-Tax Dollars Now . . . So You Can Get Federally Tax-Free Savings
Later
- --------------------------------------------------------------------------------
A new and potentially more powerful type of IRA--the Roth IRA--became available
on January 1, 1998. What makes it more powerful? The Roth IRA gives you the
opportunity to keep more of what you earn.
Are you eligible to open a Roth IRA? The answer is yes if you or your spouse
has earned income for the tax year for which you want to make the contribution,
and your adjusted gross income is below $110,000 if you are a single tax filer,
$160,000 if you file jointly.
TWO KEY ROTH IRA BENEFITS:
TAX-FREE AND PENALTY-FREE WITHDRAWALS
o Of earnings after five years. Earnings on your Roth IRA are federally
tax-free if your Roth IRA account has been open for five years and you are at
least 59 1/2 years old, or in the case of death or disability. You may also use
up to $10,000 of your earnings to buy a first home (after five years).
o Of contributions at any time. For instance, if you make annual contributions
of $2,000 for the next three years, you may take out up to $6,000 and use that
money for any purpose.
HOW YOU MIGHT PUT BOTH BENEFITS TO WORK FOR YOU
Here's an example of how you may take full advantage of a Roth IRA. You are 39
1/2 years old. You contribute $2,000 after-tax annually in your Roth IRA every
year for 20 years, earning an average annual return of 10%. After 20 years, your
account has grown to $126,005. Now at age 59 1/2 you can begin taking
withdrawals and pay no federal income tax or penalty on any of your $126,005. Or
you can keep your money invested and take it out whenever you need it.
THE ROTH IRA: TO CONVERT OR NOT TO CONVERT
Can you convert your Traditional IRA to a Roth IRA? The answer is yes if you
meet these requirements:
You must pay taxes on the amount you convert. If you convert in 1998, you
can spread your tax payments over the next four years. This four-year allowance
will not be available after December 31, 1998.
You cannot convert to a Roth IRA if you are married and file your tax return
separately, or if your annual gross income is over $100,000.
SOME ROTH IRA CONVERSION GUIDELINES
If you can check most of these boxes, converting your Traditional IRA to a Roth
IRA may make sense for you.
- --------------------------------------------------------------------------------
o You have assets outside your retirement savings with which you can easily
afford to pay the taxes due when you convert.
o You have 10 years or more before you retire. The longer you invest tax-free,
the more you benefit.
o Your tax rate will probably be higher in retirement than it is now. If so,
you'll pay less taxes now to convert than you would pay at retirement if you
withdrew from a traditional IRA.
o You plan to convert in 1998. On January 1, 1999, the ability to spread tax
payments over four years disappears.
o You want to keep making contributions after age 70 1/2 and may wish to pass
your IRA assets on to your heirs after your death.
ROTH IRA CALCULATOR & ANALYZER
The Roth IRA Analyzer & Calculator at AIM's Internet Web site--
www.aimfunds.com-- can help you determine your IRA eligibility status and
whether it makes sense for you to convert an existing IRA into a Roth IRA.
MAKE YOUR IRA CONVERSION DECISION A TRULY INFORMED ONE
Talk to your financial consultant, who knows your specific needs and goals. You
may also wish to talk with a tax adviser.
This discussion does not constitute tax advice. Your tax adviser can provide
guidance concerning your particular situation.
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-90.98%
ARGENTINA-1.85%
Banco Rio de La Plata S.A.
(Banks-Major Regional) 415,000 $ 5,706,250
- ---------------------------------------------------------------
Perez Companc S.A.-Class B (Oil
& Gas-Refining & Marketing) 1,467,264 8,819,535
- ---------------------------------------------------------------
Telefonica de Argentina S.A.-ADR
(Telephone) 432,000 16,659,000
- ---------------------------------------------------------------
YPF Sociedad Anonima-ADR
(Oil-International Integrated) 508,200 17,723,475
- ---------------------------------------------------------------
48,908,260
- ---------------------------------------------------------------
AUSTRALIA-0.62%
Australia & New Zealand Banking
Group Ltd. (Banks-Major Regional) 1,791,423 12,505,981
- ---------------------------------------------------------------
Telstra Corp. Ltd. (Telephone) 1,700,640 3,993,273
- ---------------------------------------------------------------
16,499,254
- ---------------------------------------------------------------
AUSTRIA-0.37%
OMV A.G. (Oil & Gas-Refining &
Marketing) 66,000 9,795,589
- ---------------------------------------------------------------
BELGIUM-1.47%
Barco Industries
(Manufacturing-Diversified) 41,000 10,860,046
- ---------------------------------------------------------------
Colruyt N.V. (Retail-Food Chains) 22,000 13,379,102
- ---------------------------------------------------------------
UCB S.A. (Manufacturing-Diversified) 3,100 14,822,153
- ---------------------------------------------------------------
39,061,301
- ---------------------------------------------------------------
BRAZIL-2.35%
Companhia Energetica de Minas
Gerais (Electric Companies) 173,000 8,395,488
- ---------------------------------------------------------------
Petroleo Brasileiro S.A.-Petrobras-
Preferred (Oil & Gas-Exploration &
Production) 30,271 7,676,042
- ---------------------------------------------------------------
Telecomunicacoes Brasileiras S.A.
(Telecommunications-
Cellular/Wireless) 190,600 18,915,840
- ---------------------------------------------------------------
Telecomunicacoes de Sao Paulo
S.A.-TELESP-Preferred (Telephone) 59,100 20,102,217
- ---------------------------------------------------------------
Telecomunicacoes do Rio de Janeiro
S.A. (Telecommunications-
Cellular/Wireless) 44,988 7,080,698
- ---------------------------------------------------------------
62,170,285
- ---------------------------------------------------------------
CANADA-5.12%
Bank of Montreal (Banks-Major
Regional) 281,500 15,356,156
- ---------------------------------------------------------------
BCE Inc. (Telecommunications-
Cellular/Wireless) 302,700 12,892,562
- ---------------------------------------------------------------
Bombardier Inc. (Aerospace/Defense) 498,000 13,443,928
- ---------------------------------------------------------------
Canadian National Railway Co.
(Railroads) 170,000 11,060,625
- ---------------------------------------------------------------
Geac Computer Corp. Ltd.
(Services-Computer Systems)(a) 170,000 6,699,654
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
CANADA-(CONTINUED)
Imasco Ltd.
(Manufacturing-Diversified) 334,100 $ 12,582,638
- ---------------------------------------------------------------
Mitel Corp. (Communications
Equipment)(a) 690,000 9,796,132
- ---------------------------------------------------------------
Northern Telecom Ltd.-ADR
(Communications Equipment) 249,400 15,182,225
- ---------------------------------------------------------------
Royal Bank of Canada
(Banks-Major Regional) 200,000 11,945,309
- ---------------------------------------------------------------
Suncor, Inc. (Oil-International
Integrated) 380,000 13,102,074
- ---------------------------------------------------------------
Toronto-Dominion Bank
(Banks-Regional) 298,000 13,609,400
- ---------------------------------------------------------------
135,670,703
- ---------------------------------------------------------------
CHILE-0.45%
Cia. de Telecomunicaciones de
Chile S.A.-ADR (Telephone) 263,925 6,614,620
- ---------------------------------------------------------------
Quinenco S.A.-ADR
(Financial-Diversified) 513,900 5,299,594
- ---------------------------------------------------------------
11,914,214
- ---------------------------------------------------------------
DENMARK-1.08%
Novo Nordisk A/S-Class B (Health
Care-Drugs-Generic & Other) 176,600 28,651,023
- ---------------------------------------------------------------
FINLAND-1.18%
Nokia Oyj A.B.-Class A
(Communications Equipment) 464,000 31,129,205
- ---------------------------------------------------------------
FRANCE-16.03%
Accor S.A. (Lodging-Hotels) 91,000 24,812,677
- ---------------------------------------------------------------
Alcatel Alsthom
(Manufacturing-Diversified) 160,000 29,678,922
- ---------------------------------------------------------------
AXA S.A. (Insurance-Multi-Line) 132,000 15,503,577
- ---------------------------------------------------------------
Banque Nationale de Paris
(Banks-Major Regional) 250,000 21,086,342
- ---------------------------------------------------------------
Cap Gemini Sogeti S.A.
(Computers-Software & Services) 213,500 27,739,727
- ---------------------------------------------------------------
Compagnie Francaise d'Etudes et
de Construction Technip (Oil &
Gas-Refining & Marketing) 103,000 13,091,332
- ---------------------------------------------------------------
Danone (Foods) 89,000 21,024,788
- ---------------------------------------------------------------
Elf Aquitaine S.A. (Oil &
Gas-Refining & Marketing) 97,500 12,797,787
- ---------------------------------------------------------------
Essilor International S.A.
(Manufacturing-Specialized) 47,940 19,380,170
- ---------------------------------------------------------------
Lafarge S.A. (Engineering &
Construction) 212,000 20,032,607
- ---------------------------------------------------------------
Legrand S.A. (Housewares) 56,000 14,812,843
- ---------------------------------------------------------------
Pinault-Printemps-Redoute S.A.
(Retail-General Merchandise) 34,800 25,924,871
- ---------------------------------------------------------------
Promodes (Retail-Food Chains) 28,000 13,494,593
- ---------------------------------------------------------------
PSA Peugeot Citreon (Automobiles) 73,000 12,678,756
- ---------------------------------------------------------------
Renault S.A. (Automobiles)(a) 855,000 39,684,745
- ---------------------------------------------------------------
Rexel S.A. (Distributors-Food &
Health) 37,000 14,865,247
- ---------------------------------------------------------------
Schneider S.A. (Housewares) 287,000 21,485,610
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-(CONTINUED)
Societe BIC S.A. (Office
Equipment & Supplies) 136,550 $ 9,400,165
- ---------------------------------------------------------------
Societe Generale (Banks-Major
Regional) 87,000 18,120,778
- ---------------------------------------------------------------
Sodexho Alliance S.A.
(Services-Commercial & Consumer) 36,800 6,740,442
- ---------------------------------------------------------------
Suez Lyonnaise des Eaux
(Manufacturing-Diversified) 75,000 12,726,668
- ---------------------------------------------------------------
Total S.A.-Class B (Oil &
Gas-Refining & Marketing) 111,000 13,203,294
- ---------------------------------------------------------------
Valeo S.A. (Auto Parts & Equipment) 161,000 16,016,969
- ---------------------------------------------------------------
424,302,910
- ---------------------------------------------------------------
GERMANY-7.43%
Adidas A.G. (Footwear) 146,000 24,209,910
- ---------------------------------------------------------------
Allianz A.G.
(Insurance-Multi-Line) 43,500 13,383,869
- ---------------------------------------------------------------
Bayerische Vereinsbank A.G.
(Banks-Major Regional) 285,000 21,683,574
- ---------------------------------------------------------------
Continental A.G. (Auto Parts &
Equipment) 285,000 8,101,555
- ---------------------------------------------------------------
Dresdner Bank A.G. (Banks-Major
Regional) 240,000 12,989,243
- ---------------------------------------------------------------
Henkel KGaA (Chemicals-Diversified) 266,500 20,795,942
- ---------------------------------------------------------------
Mannesmann A.G.
(Machinery-Diversified) 32,250 25,597,235
- ---------------------------------------------------------------
Porsche A.G. (Automobiles) 3,300 8,258,737
- ---------------------------------------------------------------
SAP A.G. (Computers-Software &
Services) 27,000 12,791,929
- ---------------------------------------------------------------
SAP A.G.-Preferred
(Computers-Software & Services) 27,000 13,469,149
- ---------------------------------------------------------------
VEBA A.G. (Manufacturing-Diversified) 155,000 10,246,363
- ---------------------------------------------------------------
Volkswagen A.G. (Automobiles) 31,500 25,089,739
- ---------------------------------------------------------------
196,617,245
- ---------------------------------------------------------------
HONG KONG-2.19%
Cosco Pacific Ltd.
(Financial-Diversified) 9,772,000 6,623,160
- ---------------------------------------------------------------
Hong Kong & China Gas Co. Ltd.
(Natural Gas) 10,209,056 13,904,666
- ---------------------------------------------------------------
HSBC Holdings PLC (Banks-Major
Regional) 490,000 13,980,119
- ---------------------------------------------------------------
Hutchison Whampoa Ltd.
(Retail-Food Chains) 2,552,000 15,781,152
- ---------------------------------------------------------------
New World Infrastructure Ltd.
(Services-Commercial &
Consumer)(a) 1,484,200 3,190,283
- ---------------------------------------------------------------
Ng Fung Hong Ltd. (Foods) 4,986,000 4,505,809
- ---------------------------------------------------------------
57,985,189
- ---------------------------------------------------------------
HUNGARY-0.23%
Gedeon Richter (Health
Care-Drugs-Major Pharmaceuticals) 57,200 6,091,800
- ---------------------------------------------------------------
INDONESIA-0.28%
Gulf Indonesia Resources Ltd.
(Oil-International Integrated)(a) 488,400 7,509,150
- ---------------------------------------------------------------
IRELAND-1.43%
Allied Irish Banks PLC
(Banks-Regional) 915,000 12,751,284
- ---------------------------------------------------------------
Bank of Ireland (Banks-Major
Regional) 750,000 15,315,919
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
IRELAND-(CONTINUED)
Elan Corp. PLC-ADR (Health
Care-Drugs-Generic & Other)(a) 158,800 $ 9,865,450
- ---------------------------------------------------------------
37,932,653
- ---------------------------------------------------------------
ITALY-4.91%
Assicurazioni Generali
(Insurance-Multi-Line) 508,500 15,230,168
- ---------------------------------------------------------------
Credito Italiano S.p.A.
(Banks-Major Regional) 2,400,000 12,562,622
- ---------------------------------------------------------------
Ente Nazionale Idrocarburi
S.p.A. (Oil & Gas-Refining &
Marketing) 2,050,000 13,737,263
- ---------------------------------------------------------------
Istituto Mobiliare Italiano
S.p.A. (Banks-Major Regional) 825,000 13,439,114
- ---------------------------------------------------------------
Pirelli S.p.A. (Electrical
Equipment) 5,520,371 18,234,505
- ---------------------------------------------------------------
Telecom Italia Mobile S.p.A.
(Telecommunications-
Cellular/Wireless) 5,100,000 29,217,715
- ---------------------------------------------------------------
Telecom Italia S.p.A. (Telephone) 3,650,000 27,498,377
- ---------------------------------------------------------------
129,919,764
- ---------------------------------------------------------------
JAPAN-7.39%
Advantest Corp.
(Electronics-Instrumentation) 217,910 14,649,135
- ---------------------------------------------------------------
Bridgestone Corp. (Auto Parts &
Equipment) 477,000 10,881,033
- ---------------------------------------------------------------
Canon, Inc. (Office Equipment &
Supplies) 398,000 9,409,623
- ---------------------------------------------------------------
Fuji Photo Film Co. (Leisure
Time-Products) 265,000 9,427,827
- ---------------------------------------------------------------
Hitachi Cable, Ltd. (Metal
Fabricators) 1,254,000 6,242,058
- ---------------------------------------------------------------
Honda Motor Co., Ltd. (Automobiles) 391,000 14,176,297
- ---------------------------------------------------------------
Ibiden Co., Ltd.
(Electronics-Component
Distributors) 634,000 10,008,762
- ---------------------------------------------------------------
Minebea Co. Ltd.
(Electronics-Component
Distributors) 1,614,000 18,043,055
- ---------------------------------------------------------------
Murata Manufacturing Co., Ltd.
(Electronics-Component
Distributors) 326,000 9,554,196
- ---------------------------------------------------------------
Nippon Telegraph & Telephone
Corp. (Telephone) 15,790 13,835,184
- ---------------------------------------------------------------
Nippon Television Network Corp.
(Broadcasting-Television,
Radio & Cable) 26,530 7,835,358
- ---------------------------------------------------------------
NTT Data Communications Systems
Co. (Computers-Software & Services) 2,960 12,788,881
- ---------------------------------------------------------------
Rohm Co. (Electronics-Component
Distributors) 104,000 11,736,234
- ---------------------------------------------------------------
SMC Corp. (Machinery-Diversified) 100,000 8,308,785
- ---------------------------------------------------------------
Sony Corp. (Electronics-Component
Distributors) 234,000 19,460,231
- ---------------------------------------------------------------
TDK Corp. (Electrical Equipment) 244,000 19,278,193
- ---------------------------------------------------------------
195,634,852
- ---------------------------------------------------------------
MEXICO-3.00%
Cifra S.A. de C.V.-Series C
(Retail-General Merchandise)(a) 5,637,000 9,589,242
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEXICO-(CONTINUED)
Cifra S.A. de C.V.-Series V
(Retail-General Merchandise)(a) 656,432 $ 1,146,059
- ---------------------------------------------------------------
Coca-Cola Femsa S.A.-ADR
(Beverages-Non-Alcoholic) 554,600 9,428,200
- ---------------------------------------------------------------
Fomento Economico Mexicano, S.A.
de C.V.-Class B
(Beverages-Alcoholic) 1,282,350 9,487,139
- ---------------------------------------------------------------
Grupo Industrial Maseca S.A. de
C.V.-Class B (Foods) 5,457,500 3,934,723
- ---------------------------------------------------------------
Grupo Televisa S.A.-GDR
(Entertainment)(a) 374,200 15,342,200
- ---------------------------------------------------------------
Kimberly-Clark de Mexico, S.A.
de C.V.-Class A (Paper &
Forest Products) 2,700,000 13,247,924
- ---------------------------------------------------------------
Panamerican Beverages, Inc.-Class A
(Beverages-Non-Alcoholic) 370,000 14,753,750
- ---------------------------------------------------------------
TV Azteca, S.A. de C.V.-ADR
(Broadcasting-Television,
Radio & Cable) 136,200 2,536,725
- ---------------------------------------------------------------
79,465,962
- ---------------------------------------------------------------
NETHERLANDS-4.44%
CMG PLC (Computers-Software &
Services) 357,800 16,011,643
- ---------------------------------------------------------------
Getronics N.V.
(Computers-Software & Services) 417,000 18,454,433
- ---------------------------------------------------------------
Koninklijke Ahold N.V.
(Retail-Food Chains) 661,000 20,614,326
- ---------------------------------------------------------------
Koninklijke Numico N.V. (Foods) 153,000 5,112,371
- ---------------------------------------------------------------
Philips Electronics N.V.
(Household Furniture & Appliances) 225,000 19,825,751
- ---------------------------------------------------------------
Randstad Holdings N.V.
(Services-Commercial & Consumer) 137,000 6,727,588
- ---------------------------------------------------------------
Vendex International N.V.
(Retail-General Merchandise) 215,000 13,793,377
- ---------------------------------------------------------------
VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd
Bezit (Publishing) 525,000 16,996,682
- ---------------------------------------------------------------
117,536,171
- ---------------------------------------------------------------
NORWAY-0.53%
Petroleum Geo-Services A.S.A.
(Oil-International Integrated)(a) 215,000 13,955,515
- ---------------------------------------------------------------
PHILIPPINES-0.29%
Philippine Long Distance
Telephone Co. (Telephone) 168,960 4,523,836
- ---------------------------------------------------------------
Philippine Long Distance
Telephone Co.-ADR (Telephone) 119,200 3,218,400
- ---------------------------------------------------------------
7,742,236
- ---------------------------------------------------------------
PORTUGAL-2.57%
Banco Comercial Portugues, S.A.
(Banks-Major Regional) 440,000 15,428,230
- ---------------------------------------------------------------
Cimpor-Cimentos de Portugal S.A.
(Construction-Cement & Aggregates) 215,000 7,952,615
- ---------------------------------------------------------------
Electricidade de Portugal,
S.A.-ADR (Electric Companies) 140,800 7,321,600
- ---------------------------------------------------------------
Portugal Telecom S.A. (Telephone) 510,000 27,410,559
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
PORTUGAL-(CONTINUED)
Telecel-Comunicacaoes Pessoais,
S.A. (Telecommunications-Cellular/
Wireless)(a) 55,000 $ 9,868,421
- ---------------------------------------------------------------
67,981,425
- ---------------------------------------------------------------
SINGAPORE-0.26%
Overseas Union Bank Ltd.
(Banks-Major Regional) 1,846,800 6,999,874
- ---------------------------------------------------------------
SPAIN-3.94%
Banco Bilbao Vizcaya, S.A.
(Banks-Major Regional) 432,000 22,238,214
- ---------------------------------------------------------------
Banco Popular Espanol S.A.
(Banks-Major Regional) 144,300 11,843,401
- ---------------------------------------------------------------
Endesa S.A. (Electric Companies) 1,171,000 28,448,457
- ---------------------------------------------------------------
Iberdrola S.A. (Electric Companies) 1,100,000 17,695,338
- ---------------------------------------------------------------
Telefonica de Espana (Telephone) 565,000 23,594,222
- ---------------------------------------------------------------
Telefonica de Espana-Rights,
expiring 05/30/98 (Telephone)(a) 565,000 445,174
- ---------------------------------------------------------------
104,264,806
- ---------------------------------------------------------------
SWEDEN-1.73%
Hennes & Mauritz A.B.-Class B
(Retail-Specialty-Apparel) 133,992 6,974,784
- ---------------------------------------------------------------
Sparbanken Sverige A.B.-Class A
(Banks-Major Regional) 530,000 16,566,778
- ---------------------------------------------------------------
Svenska Handelsbanken-Class A
(Banks-Major Regional) 490,000 22,215,190
- ---------------------------------------------------------------
45,756,752
- ---------------------------------------------------------------
SWITZERLAND-5.63%
Clariant A.G. (Chemicals-Specialty) 19,200 20,662,358
- ---------------------------------------------------------------
Credit Suisse Group (Banks/Major
Regional) 122,300 26,893,450
- ---------------------------------------------------------------
Holderbank Financiere Glarus
A.G.-Class B (Construction-Cement
& Aggregates) 12,000 12,698,074
- ---------------------------------------------------------------
Nestle S.A. (Foods) 15,000 29,086,426
- ---------------------------------------------------------------
Rieter Holdings Ltd.
(Machinery-Diversified) 23,000 13,808,889
- ---------------------------------------------------------------
Schweizerischer Bankverein
(Banks-Major Regional) 71,000 24,649,164
- ---------------------------------------------------------------
Zurich Versicherungs-Gesellschaft
(Insurance-Multi-Line) 35,000 21,316,719
- ---------------------------------------------------------------
149,115,080
- ---------------------------------------------------------------
TAIWAN-0.12%
Taiwan Semiconductor
Manufacturing Co.-ADR
(Electronics-Semiconductors)(a) 131,300 3,225,056
- ---------------------------------------------------------------
UNITED KINGDOM-14.09%
Airtours PLC
(Services-Commercial &
Consumer) 1,399,350 12,257,912
- ---------------------------------------------------------------
Bodycote International PLC
(Chemicals-Specialty) 410,000 8,214,985
- ---------------------------------------------------------------
British Aerospace PLC
(Aerospace/Defense) 425,000 14,202,034
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
British Petroleum Co. PLC (Oil &
Gas-Refining & Marketing) 437,200 $ 6,906,345
- ---------------------------------------------------------------
Cable & Wireless PLC
(Telecommunications-
Cellular/Wireless) 1,755,000 20,106,377
- ---------------------------------------------------------------
Compass Group PLC
(Services-Commercial & Consumer) 970,000 16,791,064
- ---------------------------------------------------------------
EMAP PLC (Publishing) 965,000 19,641,924
- ---------------------------------------------------------------
General Electric Co. PLC
(Manufacturing-Diversified) 1,769,800 14,651,953
- ---------------------------------------------------------------
GKN PLC
(Manufacturing-Diversified) 530,000 15,308,560
- ---------------------------------------------------------------
Granada Group PLC (Leisure
Time-Products) 435,000 7,493,636
- ---------------------------------------------------------------
Hays PLC (Services-Commercial &
Consumer) 1,050,050 17,816,737
- ---------------------------------------------------------------
Kingfisher PLC
(Retail-Department Stores) 1,003,800 18,232,371
- ---------------------------------------------------------------
Ladbroke Group PLC (Leisure
Time-Products) 2,500,000 13,745,859
- ---------------------------------------------------------------
Lloyds TSB Group PLC
(Banks-Major Regional) 570,000 8,537,025
- ---------------------------------------------------------------
Misys PLC (Services-Commercial &
Consumer) 390,000 18,752,906
- ---------------------------------------------------------------
Pearson PLC (Specialty Printing) 950,000 14,887,759
- ---------------------------------------------------------------
Provident Financial PLC
(Consumer Finance) 909,333 15,193,391
- ---------------------------------------------------------------
Railtrack Group PLC (Shipping) 1,461,448 26,703,669
- ---------------------------------------------------------------
Rentokil Initial PLC
(Services-Commercial & Consumer) 2,760,000 17,783,525
- ---------------------------------------------------------------
Royal & Sun Alliance Insurance
Group PLC (Insurance-Multi-Line) 1,350,000 15,082,605
- ---------------------------------------------------------------
Siebe PLC (Electronics-
Component/Distributors) 370,000 8,267,502
- ---------------------------------------------------------------
Smiths Industries PLC
(Machinery-Diversified) 256,000 3,684,317
- ---------------------------------------------------------------
Unilever PLC (Foods) 2,064,000 21,989,495
- ---------------------------------------------------------------
Vodafone Group PLC
(Telecommunications-
Cellular/Wireless) 1,865,000 20,430,842
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
WPP Group PLC
(Services-Advertising/Marketing) 2,575,000 $ 16,343,879
- ---------------------------------------------------------------
373,026,672
- ---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$1,675,471,312) 2,408,862,946
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
FOREIGN CONVERTIBLE BONDS-0.77%
FRANCE-0.57%
AXA-UAP (Insurance-Multi-Line),
Conv. Sr. Deb., 4.50%,
01/01/99(b) FRF 33,885,000 $ 14,958,838
- ---------------------------------------------------------------
HONG KONG-0.20%
New World Infrastructure Ltd.
(Services-Commercial &
Consumer), Conv. Bonds, 5.00%,
07/15/01 (acquired 04/10/97 -
04/11/97; cost $2,056,313)(c) $ 1,750,000 1,758,750
- ---------------------------------------------------------------
New World Infrastructure Ltd.
(Services-Commercial &
Consumer), Conv. Bonds, 5.00%,
07/15/01 $ 3,650,000 3,668,250
- ---------------------------------------------------------------
5,427,000
- ---------------------------------------------------------------
Total Foreign Convertible
Bonds (Cost $14,910,209) 20,385,838
- ---------------------------------------------------------------
REPURCHASE AGREEMENTS-6.19%(d)
Dean Witter Reynolds, 5.55%,
05/01/98(e) 42,092 42,092
- ---------------------------------------------------------------
Goldman Sachs & Co., 5.53%,
05/01/98(f) 505,897 505,897
- ---------------------------------------------------------------
Lehman Brothers Inc.,
5.32%, 05/01/98(g) 70,494,103 70,494,103
- ---------------------------------------------------------------
5.30%, 05/01/98(h) 93,000,000 93,000,000
- ---------------------------------------------------------------
Total Repurchase Agreements
(Cost $164,042,092) 164,042,092 164,042,092
- ---------------------------------------------------------------
TOTAL INVESTMENTS-97.94% 2,593,290,876
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-2.06% 54,413,600
- ---------------------------------------------------------------
NET ASSETS-100.00% $2,647,704,476
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Deb. - Debenture
FRF - French Franc
GDR - Global Depositary Receipt
Sr. - Senior
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(c)Restricted security. May be resold to qualified institutional buyers in
accordance with provisions of Rule 144A under the Securities Act of 1933, as
amended. The valuation of this security has been determined in accordance
with procedures established by the Board of Directors. The aggregate market
value of this security represented 0.07% of the Fund's net assets.
(d)Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreements. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e)Joint repurchase agreement entered into 04/30/98 with a maturing value of
$300,046,250. Collateralized by $307,111,000 U.S. Government obligations, 0%
to 9.40% due 06/10/98 to 09/26/19 with an aggregate market value at 04/30/98
of $306,000,308.
(f)Joint repurchase agreement entered into 04/30/98 with a maturing value of
$500,076,806. Collaterized by $495,889,000 U.S. obligations, 0% to 7.75% due
07/23/98 to 01/15/08 with an aggregate market value at 04/30/98 of
$510,500,080.
(g)Joint repurchase agreement entered into 04/30/98 with a maturing value of
$450,066,250. Collateralized by $522,302,000 U.S. Government obligations, 0%
to 7.45% due 08/14/98 to 10/08/27 with an aggregate market value at 04/30/98
of $459,005,491.
(h)Joint repurchase agreement entered into 04/30/98 with a maturing value of
$450,066,500. Collateralized by $557,597,000 U.S. Government obligations, 0%
to 8.60% due 05/26/98 to 11/12/27 with an aggregate market value at 04/30/98
of $459,003,592.
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$1,854,423,613) $2,593,290,876
- ------------------------------------------------------------
Foreign currencies, at value (cost
$39,795,295) 39,909,798
- ------------------------------------------------------------
Receivables for:
Investments sold 55,680,888
- ------------------------------------------------------------
Capital stock sold 21,561,568
- ------------------------------------------------------------
Dividends and interest 7,650,132
- ------------------------------------------------------------
Investment for deferred compensation plan 30,987
- ------------------------------------------------------------
Other assets 78,119
- ------------------------------------------------------------
Total assets 2,718,202,368
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 56,007,863
- ------------------------------------------------------------
Capital stock reacquired 10,478,190
- ------------------------------------------------------------
Deferred compensation 30,987
- ------------------------------------------------------------
Accrued advisory fees 1,866,012
- ------------------------------------------------------------
Accrued administrative services fees 9,020
- ------------------------------------------------------------
Accrued directors' fees 3,171
- ------------------------------------------------------------
Accrued distribution fees 1,116,490
- ------------------------------------------------------------
Accrued transfer agent fees 449,100
- ------------------------------------------------------------
Accrued operating expenses 537,059
- ------------------------------------------------------------
Total liabilities 70,497,892
- ------------------------------------------------------------
Net assets applicable to shares outstanding $2,647,704,476
============================================================
NET ASSETS:
Class A $1,795,441,087
============================================================
Class B $ 810,320,352
============================================================
Class C $ 41,943,037
============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 200,000,000
- ------------------------------------------------------------
Outstanding 92,375,514
============================================================
Class B:
Authorized 200,000,000
- ------------------------------------------------------------
Outstanding 42,646,310
============================================================
Class C:
Authorized 200,000,000
- ------------------------------------------------------------
Outstanding 2,206,392
============================================================
Class A:
Net asset value and redemption price per
share $ 19.44
============================================================
Offering price per share:
(Net asset value of $19.44
divided by 94.50%) $ 20.57
============================================================
Class B:
Net asset value and offering price per
share $ 19.00
============================================================
Class C:
Net asset value and offering price per
share $ 19.01
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $1,376,801 foreign
withholding tax) $ 11,416,813
- -----------------------------------------------------------
Interest 4,046,927
- -----------------------------------------------------------
Total investment income 15,463,740
- -----------------------------------------------------------
EXPENSES:
Advisory fees 10,734,834
- -----------------------------------------------------------
Administrative services fees 52,690
- -----------------------------------------------------------
Custodian fees 875,718
- -----------------------------------------------------------
Directors' fees 11,494
- -----------------------------------------------------------
Distribution fees-Class A 2,392,026
- -----------------------------------------------------------
Distribution fees-Class B 3,573,314
- -----------------------------------------------------------
Distribution fees-Class C 105,364
- -----------------------------------------------------------
Transfer agent fees-Class A 1,302,309
- -----------------------------------------------------------
Transfer agent fees-Class B 857,137
- -----------------------------------------------------------
Transfer agent fees-Class C 23,095
- -----------------------------------------------------------
Other 370,732
- -----------------------------------------------------------
Total expenses 20,298,713
- -----------------------------------------------------------
Less: Fees waived by advisor (458,632)
- -----------------------------------------------------------
Expenses paid indirectly (15,154)
- -----------------------------------------------------------
Net expenses 19,824,927
- -----------------------------------------------------------
Net investment income (loss) (4,361,187)
- -----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT
SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) from:
Investment securities 45,242,054
- -----------------------------------------------------------
Foreign currencies (4,049,506)
- -----------------------------------------------------------
41,192,548
- -----------------------------------------------------------
Net unrealized appreciation (depreciation)
of:
Investment securities 351,178,968
- -----------------------------------------------------------
Foreign currencies (11,635)
- -----------------------------------------------------------
351,167,333
- -----------------------------------------------------------
Net gain from investment securities and
foreign
currencies 392,359,881
- -----------------------------------------------------------
Net increase in net assets resulting from
operations $387,998,694
===========================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 1998 and the year ended October 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (4,361,187) $ 328,254
- -----------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies 41,192,548 (16,556,015)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 351,167,333 193,195,060
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 387,998,694 176,967,299
- -----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (5,802,803) (1,250,230)
- -----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (31,812,536)
- -----------------------------------------------------------------------------------------------
Class B -- (11,361,858)
- -----------------------------------------------------------------------------------------------
Share transactions-net:
Class A (44,913,515) 363,888,653
- -----------------------------------------------------------------------------------------------
Class B 16,973,074 282,384,176
- -----------------------------------------------------------------------------------------------
Class C 24,421,262 13,462,792
- -----------------------------------------------------------------------------------------------
Net increase in net assets 378,676,712 792,278,296
- -----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 2,269,027,764 1,476,749,468
- -----------------------------------------------------------------------------------------------
End of period $2,647,704,476 $2,269,027,764
===============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,894,342,763 $1,897,861,942
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (4,300,475) 5,863,515
- -----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies 18,739,029 (22,453,519)
- -----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 738,923,159 387,755,826
- -----------------------------------------------------------------------------------------------
$2,647,704,476 $2,269,027,764
===============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM International Equity Fund (the "Fund") is a series portfolio of AIM
International Funds, Inc. (the "Company"). The Company is a Maryland corporation
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of six
separate portfolios: AIM International Equity Fund, AIM Asian Growth Fund, AIM
European Development Fund, AIM Global Aggressive Growth Fund, AIM Global Growth
Fund and AIM Global Income Fund. The Fund currently offers three different
classes of shares: Class A shares, Class B shares and Class C shares. Class A
shares are sold with a front-end sales charge. Class B and Class C shares are
sold with a contingent deferred sales charge. Matters affecting each portfolio
or class are voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is to provide long-term growth
of capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations-A security listed or traded on an exchange (except
convertible bonds) is valued at the last sales price on the exchange where
the security is principally traded or, lacking any sales on a particular day,
at the mean between the closing bid and asked prices on that day. If a mean
is not available, as is the case in some foreign markets, the closing bid
will be used absent a last sales price. Securities traded in the over-the-
counter market (but not including securities reported on the NASDAQ National
Market System) are valued at the mean
11
<PAGE> 14
between the last bid and asked prices based upon quotes furnished by market
makers for such securities. Securities reported on the NASDAQ National Market
System are valued at the last sales price on the valuation date or absent a
last sales price, at the mean of the closing bid and asked prices. Debt
obligations (including convertible bonds) are valued on the basis of prices
provided by an independent pricing service. Prices provided by the pricing
service may be determined without exclusive reliance on quoted prices, and
may reflect appropriate factors, such as yield, type of issue, coupon rate
and maturity date. Securities for which market quotations are either not
readily available or are questionable are valued at fair value as determined
in good faith by or under the supervision of the Company's officers in a
manner specifically authorized by the Board of Directors. Investments with
maturities of 60 days or less are valued on the basis of amortized cost which
approximates market value. Generally, trading in foreign securities is
substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values of such securities used in computing the
net asset value of the Fund's shares are determined as of such times. Foreign
currency exchange rates are also generally determined prior to the close of
the New York Stock Exchange. Occasionally, events affecting the values of
such securities and such exchange rates may occur between the times at which
they are determined and the close of the New York Stock Exchange which would
not be reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities occur during such period,
then these securities will be valued at their fair value as determined in
good faith by or under the supervision of the Board of Directors.
B. Foreign Currency Translations--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the date of valuation. Purchases and sales of portfolio securities
and income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts--A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
D. Securities Transactions, Investment Income and Distributions--Securities
transactions are accounted for on a trade date basis. Realized gains or
losses are computed on the basis of specific identification of the securities
sold. Interest income is recorded as earned from settlement date and is
recorded on an accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
E. Federal Income Taxes--The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed to
shareholders. Therefore, no provision for federal income taxes is recorded in
the financial statements. The Fund has a capital loss carryforward of
$14,969,471 (which may be carried forward to offset future capital gains, if
any) which expires, if not previously utilized, through the year 2005.
F. Expenses--Distribution and transfer agency expenses directly attributable to
a class of shares are charged to that class' operations. All other expenses
which are attributable to more than one class are allocated among the
classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.95% of
the first $1 billion of the Fund's average daily net assets, plus 0.90% of the
Fund's average daily net assets in excess of $1 billion. AIM is currently
voluntarily waiving a portion of its advisory fees paid by the Fund to AIM to
the extent necessary to reduce the fees paid by the Fund at net asset levels
higher than those currently incorporated in the present advisory fee schedule.
Under the voluntary waiver, AIM will receive a fee calculated at the annual rate
of 0.95% of the first $500 million of the Fund's average daily net assets, plus
0.90% of the Fund's average daily net assets in excess of $500 million to and
including $1 billion, plus 0.85% of the Fund's average daily net assets in
excess of $1 billion. The waiver of fees is voluntary and the Board of Directors
of the Company would be advised of any decision by AIM to discontinue the
waiver. During the six months ended April 30, 1998, AIM waived fees of $458,632.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended April 30, 1998, AIM
was reimbursed $52,690 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency services to the Fund. During the six months ended April 30,
1998, AFS was paid $998,792 for such services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor of the Class
A, Class B and Class C shares of the Fund. The Company has adopted distribution
plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class
A shares and Class C shares (the "Class A and Class C Plan"), and the Fund's
Class B shares (the "Class B Plan") (collectively, the "Plans"). The Fund,
pursuant to the Class A and C Plan, pays AIM Distributors compensation at the
annual rate of 0.30% of the average daily net assets of Class A shares and 1.00%
of the average daily net assets of Class C shares. The Fund, pursuant to the
Class B Plan, pays AIM Distributors compensation at an annual rate of 1.00% of
the average daily net assets attributable to the Class B shares. Of these
amounts, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class A, Class B or C shares to selected dealers and financial
institutions who furnish continuing
12
<PAGE> 15
personal shareholder services to their customers who purchase and own the
appropriate class of shares of the Fund. Any amounts not paid as a service fee
under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. AIM Distributors may, from time to
time, assign, transfer, or pledge to one or more designees, its rights to all or
a designated portion of (a) compensation received by AIM Distributors from the
Fund pursuant to the Class B Plan (but not AIM Distributors' duties and
obligations pursuant to the Class B Plan) and (b) any contingent deferred sales
charges received by AIM Distributors related to the Class B shares. During the
six months ended April 30, 1998, the Class A and Class B and Class C shares paid
AIM Distributors $2,392,026, $3,573,314 and $105,364, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $314,771 from sales of the Class A
shares of the Fund during the six months ended April 30, 1998. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
1998, AIM Distributors received commissions of $74,322 in contingent deferred
sales charges imposed on redemptions of Fund shares. Certain officers and
directors of the Company are officers and directors of AIM, AFS and AIM
Distributors.
During the six months ended April 30, 1998, the Fund incurred legal fees of
$2,872 for services rendered by the law firm of Kramer, Levin, Naftalis &
Frankel as counsel to the Company's directors. A member of that firm is a
director of the Company.
NOTE 3-INDIRECT EXPENSES
During the six months ended April 30, 1998, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $13,194 and $1,960, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $15,154 during the six months ended April 30, 1998.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
During the six months ended April 30, 1998, the Fund did not borrow under the
line of credit agreement. The funds which are party to the line of credit are
charged a commitment fee of 0.05% on the unused balance of the committed line.
The commitment fee is allocated among the funds based on their respective
average net assets for the period.
Pursuant to an amendment to the line of credit agreement effective May 1,
1998, the Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the
limits set by the prospectus for borrowings.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 1998 was
$664,094,127 and $742,599,080, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of April 30, 1998 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $768,024,595
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (36,019,695)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $732,004,900
=========================================================
</TABLE>
Cost of investments for tax purposes is $1,861,285,976.
NOTE 7-CAPITAL STOCK
Changes in the Fund's capital stock outstanding during the six months ended
April 30, 1998 and the year ended October 31, 1997 were as follows:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1998 1997
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Sold:
Class A 108,917,465 $ 1,914,533,895 105,291,824 $ 1,764,668,535
- ----------------------------------------------------------------------------------------
Class B 5,530,453 95,396,155 21,599,075 352,871,134
- ----------------------------------------------------------------------------------------
Class C* 11,381,107 199,489,258 1,372,281 23,795,456
- ----------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Class A 332,410 5,441,423 2,035,986 31,231,975
- ----------------------------------------------------------------------------------------
Class B -- -- 707,879 10,688,975
- ----------------------------------------------------------------------------------------
Reacquired:
Class A (111,677,282) (1,964,888,833) (84,633,652) (1,432,011,857)
- ----------------------------------------------------------------------------------------
Class B (4,615,967) (78,423,081) (4,913,096) (81,175,933)
- ----------------------------------------------------------------------------------------
Class C* (9,963,335) (175,067,996) (583,661) (10,332,664)
- ----------------------------------------------------------------------------------------
(95,149) $ (3,519,179) 40,876,636 $ 659,735,621
========================================================================================
</TABLE>
* Class C commenced sales on August 4, 1997.
13
<PAGE> 16
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A capital stock
outstanding during the six months ended April 30, 1998 and each of the years in
the five-year period ended October 31, 1997, for a share of Class B capital
stock outstanding during the six months ended April 30, 1998, each of the years
in the three-year period ended October 31, 1997 and the period September 15,
1994 (date sales commenced) through October 31, 1994, and for a share of Class C
capital stock outstanding during the six months ended April 30, 1998 and the
period August 4, 1997 (date sales commenced) through October 31, 1997.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
OCTOBER 31,
APRIL 30, ----------------------------------------------------------------
1998 1997 1996 1995 1994 1993
---------- ---------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.64 $ 15.37 $ 13.65 $ 13.50 $ 12.18 $ 8.88
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Income from investment operations:
Net investment income (loss) (0.01)(a) 0.04(a) 0.04(a) 0.01 0.02 0.02
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Net gains on securities (both realized and
unrealized) 2.87 1.68 2.07 0.62 1.31 3.29
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Total from investment operations 2.86 1.72 2.11 0.63 1.33 3.31
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Less distributions:
Dividends from net investment income (0.06) (0.02) (0.01) (0.04) (0.01) (0.01)
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Distributions from net realized gains -- (0.43) (0.38) (0.44) -- --
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Total distributions (0.06) (0.45) (0.39) (0.48) (0.01) (0.01)
- ------------------------------------------------ ---------- ---------- ----------- --------- --------- ---------
Net asset value, end of period $ 19.44 $ 16.64 $ 15.37 $ 13.65 $ 13.50 $ 12.18
================================================ ========== ========== =========== ========= ========= =========
Total return(b) 17.27% 11.43% 15.79% 5.24% 10.94% 37.36%
================================================ ========== ========== =========== ========= ========= =========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,795,441 $1,577,390 $ 1,108,395 $ 654,764 $ 708,159 $ 372,282
================================================ ========== ========== =========== ========= ========= =========
Ratio of expenses to average net assets(c) 1.46%(d)(e) 1.47% 1.58% 1.67% 1.64% 1.78%
================================================ ========== ========== =========== ========= ========= =========
Ratio of net investment income (loss) to average
net assets(f) (0.13)%(d) 0.24% 0.25% 0.10% 0.22% 0.28%
================================================ ========== ========== =========== ========= ========= =========
Portfolio turnover rate 30% 50% 66% 68% 67% 62%
================================================ ========== ========== =========== ========= ========= =========
Average brokerage commission rate(g) $ 0.0229 $ 0.0168 $ 0.0192 N/A N/A N/A
================================================ ========== ========== =========== ========= ========= =========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and are not annualized for periods less than
one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.50% (annualized), 1.51%, 1.60% and 1.68% for 1998-1995.
(d) Ratios are annualized and based on average net assets of $1,607,899,814.
(e) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(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 (0.17)% (annualized), 0.20%, 0.22% and 0.09% for
1998-1995.
(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.
14
<PAGE> 17
NOTE 8-FINANCIAL HIGHLIGHTS-continued
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------------- -------------------------
OCTOBER 31,
APRIL 30, ------------------------------------------- APRIL 30, OCTOBER 31,
1998 1997 1996 1995 1994 1998 1997
--------- -------- -------- ------ ------ --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.27 $ 15.13 $ 13.54 $13.49 $13.42 $ 16.27 $ 17.64
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Income from investment operations:
Net investment income (loss) (0.08)(a) (0.09)(a) (0.07)(a) (0.09) (0.01) (0.09)(a) (0.02)(a)
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Net gains (losses) on securities (both
realized and unrealized) 2.81 1.66 2.04 0.61 0.08 2.83 (1.35)
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Total from investment operations 2.73 1.57 1.97 0.52 0.07 2.74 (1.37)
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Less distributions:
Dividends from net investment income -- -- -- (0.03) -- -- --
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Distributions from net realized gains -- (0.43) (0.38) (0.44) -- -- --
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Total distributions -- (0.43) (0.38) (0.47) -- -- --
- ---------------------------------------- -------- -------- -------- ------ ------ ------- -------
Net asset value, end of period $ 19.00 $ 16.27 $ 15.13 $13.54 $13.49 $ 19.01 $ 16.27
======================================== ======== ======== ======== ====== ====== ======= =======
Total return(b) 16.78% 10.61% 14.88% 4.35% 0.52% 16.84% (7.77)%
======================================== ======== ======== ======== ====== ====== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $810,320 $678,809 $368,355 $51,964 $4,833 $41,943 $12,829
======================================== ======== ======== ======== ====== ====== ======= =======
Ratio of expenses to average net
assets(c) 2.23%(d)(e) 2.25% 2.35% 2.55% 2.53%(f) 2.21%(d)(e) 2.27%(f)
======================================== ======== ======== ======== ====== ====== ======= =======
Ratio of net investment income (loss) to
average net assets(g) (0.90)%(d) (0.53)% (0.53)% (0.78)% (0.67)%(f) (0.88)%(d) (0.55)%(f)
======================================== ======== ======== ======== ====== ====== ======= =======
Portfolio turnover rate 30% 50% 66% 68% 67% 30% 50%
======================================== ======== ======== ======== ====== ====== ======= =======
Average brokerage commission rate(h) $ 0.0229 $ 0.0168 $ 0.0192 N/A N/A $0.0229 $0.0168
======================================== ======== ======== ======== ====== ====== ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and are not annualized for
periods less than one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
2.27% (annualized), 2.28%, 2.37% and 2.56% for 1998-1995 for Class B and
2.25% (annualized) and 2.30% (annualized) for 1998-1997 for Class C.
(d) Ratios are annualized and based on average net assets of $720,585,336 and
$21,247,464 for Class B and Class C, respectively.
(e) Ratios include indirectly paid expenses. Excluding indirectly paid expenses,
the ratios of expenses to average net assets would have been the same for
Class B and Class C.
(f) Annualized.
(g) 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 are (0.94)% (annualized), (0.57)%, (0.55)% and (0.79)%, for
1998-1995 for Class B and (0.92)% (annualized) and (0.57)% (annualized) for
1998-1997 for Class C.
(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.
15
<PAGE> 18
Directors & Officers
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; John J. Arthur A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Carol F. Relihan Houston, TX 77046
Senior Vice President and Secretary
Owen Daly II TRANSFER AGENT
Director Gary T. Crum
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Dana R. Sutton Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley
President, Mercantile Bankshares Vice President State Street Bank and Trust Company
225 Franklin Street
Jack Fields Melville B. Cox Boston, MA 02110
Chief Executive Officer Vice President
Texana Global, Inc.; COUNSEL TO THE FUND
Formerly Member Jonathan C. Schoolar
of the U.S. House of Representatives Vice President Ballard Spahr
Andrews & Ingersoll, LLP
Carl Frischling Renee A. Bamford 1735 Market Street
Partner Assistant Secretary Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel
P. Michelle Grace COUNSEL TO THE DIRECTORS
Robert H. Graham Assistant Secretary
President and Chief Executive Officer Kramer, Levin, Naftalis & Frankel
A I M Management Group Inc. Jeffrey H. Kupor 919 Third Avenue
Assistant Secretary New York, NY 10022
John F. Kroeger
Formerly Consultant Nancy L. Martin DISTRIBUTOR
Wendell & Stockel Associates, Inc. Assistant Secretary
A I M Distributors, Inc.
Lewis F. Pennock Ofelia M. Mayo 11 Greenway Plaza
Attorney Assistant Secretary Suite 100
Houston, TX 77046
Ian W. Robinson Lisa A. Moss
Consultant; Formerly Executive Assistant Secretary
Vice President and
Chief Financial Officer Kathleen J. Pflueger
Bell Atlantic Management Assistant Secretary
Services, Inc.
Samuel D. Sirko
Louis S. Sklar Assistant Secretary
Executive Vice President
Hines Interests Stephen I. Winer
Limited Partnership Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
16
<PAGE> 19
HOW AIM MAKES INVESTING
EASY FOR YOU
o LOW INITIAL INVESTMENT. You can get your investment program started for as
little as $500. Subsequent investments can be made for only $50.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. Distributions may
be received in cash or reinvested in the Fund free of charge. Over time, the
power of compounding can significantly increase the value of your assets.
o AUTOMATIC INVESTMENT PLAN. You may build your investment by regularly
purchasing additional shares. Pre-authorized checks for $50 or more can be
drafted monthly from your personal checking account.
o EASY ACCESS TO YOUR MONEY. Your shares may be redeemed at net asset value
any day the New York Stock Exchange is open. The price of shares sold may be
more or less than their original cost, depending on market conditions.
o SYSTEMATIC WITHDRAWAL PLAN. You may elect to receive checks of at least $50
monthly or quarterly through a systematic withdrawal plan.
o EXCHANGE PRIVILEGE. As your goals change, you may exchange all or part of
your assets for those of other funds within the same share class of The AIM
Family of Funds--Registered Trademark--. The exchange privilege may be
modified or discontinued for any of the AIM funds. Certain restrictions
apply.
o RETIREMENT PLANS. You may purchase shares of the fund for your Individual
Retirement Account (IRA) or any other type of retirement plan, and earn
tax-deferred dollars for your retirement.
o TOLL-FREE ACCESS. Current shareholders can call our AIM Investor Line at
800-246-5463 for 24-hour-a-day account information. Or, of course, you may
contact your financial consultant for assistance.
o WWW.AIMFUNDS.COM. As a current shareholder, you can check account balances
24 hours a day over the Internet. State-of-the-art encryption lets you send
us questions that include confidential information without the fear of
eavesdropping, tampering, or forgery.
------------
Current shareholders
can call our
AIM Investor Line at
800-246-5463
for 24-hour-a-day
account information.
------------
<PAGE> 20
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
FOR AGGRESSIVE GROWTH
[PHOTO OF 11 AIM Aggressive Growth Fund*
GREENWAY PLAZA AIM Asian Growth Fund
APPEARS HERE] AIM Capital Development Fund
AIM Constellation Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
FOR GROWTH OF CAPITAL
AIM Advisor International Value Fund
AIM Blue Chip Fund
AIM Global Growth Fund
AIM International Equity Fund
AIM Select Growth Fund**
AIM Value Fund
AIM Weingarten Fund
FOR GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
FOR HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
FOR CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
FOR CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided *AIM Aggressive Growth Fund was closed to new
leadership in the mutual fund industry since 1976 investors on June 5, 1997. ** On May 1, 1998, AIM
and managed approximately $89 billion in assets Growth Fund was renamed AIM Select Growth Fund.
for more than 4.4 million shareholders, including For more complete information about any AIM
individual investors, corporate clients, and Fund(s), including sales charges and expenses, ask
financial institutions, as of March 31, 1998. The your financial consultant or securities dealer for
AIM Family of Funds--Registered Trademark-- is a free prospectus(es). Please read the
distributed nationwide, and AIM today ranks among prospectus(es) carefully before you invest or send
the nation's top 15 mutual fund companies in money.
assets under management, according to Lipper
Analytical Services, Inc.
INVEST WITH DISCIPLINE-SM-
</TABLE>
