<PAGE> 1
SEMIANNUAL REPORT / APRIL 30 2000
AIM EUROPEAN DEVELOPMENT FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
HOMMAGE A BLERIOT, NO. 2, FRAGMENT
BY ROBERT DELAUNAY
LOUIS BLERIOT, A FRENCH ENGINEER AND INVENTOR, WAS THE FIRST
PERSON TO FLY ACROSS THE ENGLISH CHANNEL FROM FRANCE, TRANS-
PORTED BY A 28-HORSEPOWER MONOPLANE OF HIS OWN DESIGN.
NEARLY 100 YEARS LATER, THE SAME SPIRIT OF ENTREPRENEURSHIP
AND COURAGE THAT LAUNCHED BLERIOT'S FLIGHT HAS SENT EUROPE'S
MARKETS SOARING.
-------------------------------------
AIM European Development Fund is for shareholders who seek long-term growth of
capital. The fund invests in a diversified portfolio of equity securities of
companies located in Europe with strong earnings momentum.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM European Development Fund's performance figures are historical, and they
reflect the reinvestment of distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
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 its Class A shares due to different sales- charge structure and
class expenses.
o International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in
the value of the U.S. dollar relative to the values of other currencies, the
custodial 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.
o Investing in single-sector or single-region mutual funds may involve greater
risk and potential reward than investing in a more diversified fund.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper European Fund Index represents an average of the
performance of the 30 largest European-region mutual funds tracked by
Lipper, Inc., an independent mutual fund performance monitor.
o The unmanaged MSCI Europe Index is a group of European securities tracked by
Morgan Stanley Capital International.
o An investment cannot be made in an index. Unless other wise indicated, index
results include reinvested dividends, and they do not include sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/00, including sales charges
================================================================================
CLASS A SHARES
Inception (11/03/97) 42.50%
1 year 72.83%*
*82.87%, excluding sales charges
CLASS B SHARES
Inception (11/03/97) 44.00%
1 year 76.40%*
* 81.40%, excluding CDSC
CLASS C SHARES
Inception (11/03/97) 44.74%
1 year 80.55%*
*81.55%, excluding CDSC
The fund's average annual total returns as of the close of the reporting period
are shown in the table above. In addition, industry regulations require us to
provide average annual total returns as of 3/31/00, the most recent calendar
quarter-end, which were: Class A shares, one year, 94.32%; inception (11/03/97),
50.79%. Class B shares, one year, 98.94%; inception (11/03/97), 52.55%. Class C
shares, one year, 102.87%; inception (11/03/97), 53.26%.
================================================================================
Past performance does not guarantee comparable future results.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
AIM EUROPEAN DEVELOPMENT FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
When we started AIM in 1976, we had only a table, two
[PHOTO OF chairs and a telephone. At the time, Bob Graham, Gary Crum
Charles T. and I had the idea of creating a mutual fund company that
Bauer, put people first. Our slogan, "people are the product,"
Chairman of means that people--our employees and our investors-- are
the Board of our company.
THE FUND Almost a quarter-century later, we've grown to more than
APPEARS HERE] seven million investors, $176 billion in assets under
management and 53 retail funds. Over that time, the industry
[Photo of Robert as a whole has grown from $51 billion in assets to more than
H. Graham $7 trillion today. I never dreamed we would see such
Appears Here] phenomenal growth. You are the main reason for our success,
and I want you to know how much I appreciate your loyalty
and trust over the past 24 years.
Usually in this letter I review market activity during
the period covered by the report. This time, I'd just like to
say thank you. I am retiring as chairman of the AIM Funds effective September
30, and as chairman of AIM effective December 31, 2000. Bob Graham, whose
picture appears under mine, will succeed me as AIM's chairman and chairman of
the AIM Funds. Gary Crum will remain president of A I M Capital Management,
Inc., leading our investment division. I am enormously proud to leave AIM in
such capable hands.
I'm also very proud of our team of employees, now more than 2,300 strong.
Because of their collective commitment to excellence and ethical business
practices, AIM has earned the trust of investors and financial advisors alike.
And every employee, from portfolio managers to client services representatives,
is dedicated to serving our shareholders.
Rest assured that nothing at AIM will change because of my retirement. You
can still depend on this company to manage your money responsibly and provide
you with top-notch service. As chairman of AIM and chairman of the AIM Funds,
Bob is committed to preserving the things that have made AIM great in the past
and positioning it to succeed in the future. And Gary is dedicated to
maintaining the quality and long-term performance you've come to expect from
AIM.
In the pages that follow, the managers of your fund comment on recent
market activity, how they have managed your fund over the past six months and
their outlook for the coming months. We trust you will find their comments
helpful.
If you have any questions or comments, please contact us through our Web
site, www.aimfunds.com, or call our Client Services department at 800-959-4246
during normal business hours. Information about your account is available at our
Web site and on our automated AIM Investor Line, 800-246-5463.
Thank you again for the support and trust you've shown us. I feel
privileged to have helped you with your financial goals, and I wish you success
in all your endeavors.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
AIM EUROPEAN DEVELOPMENT FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
EUROPEAN HIGH-TECH STOCKS SKYROCKET, MARKET
VOLATILITY INCREASES
EUROPEAN EQUITY MARKETS RALLIED, THEN SOLD OFF LATE IN THE REPORTING PERIOD. HOW
DID AIM EUROPEAN DEVELOPMENT FUND PERFORM?
Despite market volatility, the fund continued to post strong returns. For the
six-month reporting period ended April 30, 2000, the fund returned 55.36% for
Class A shares, 54.75% for Class B shares and 54.78% for Class C shares based on
net asset value (without a sales charge). The fund significantly outperformed
its peer group -- the Lipper European Fund Index -- which returned 25.87% over
the same period. Total net assets more than doubled during the reporting period,
rising from $178.1 million on October 31, 1999, to $485.1 million on April 30,
2000.
DESCRIBE THE EUROPEAN MARKET ENVIRONMENT DURING THE REPORTING PERIOD.
Technology, media and telecommunications stocks, commonly referred to as TMTs,
catapulted European equity markets to new highs through the first 41/2 months of
the reporting period. Early first-quarter returns were particularly strong for
small-capitalization tech stocks. The TMT rally ended in late March, however, as
heavy profit-taking plunged European equity markets into one of their most
volatile day-to-day periods ever. Fortunately, sentiment began to improve late
in April as some TMT companies released news of stronger-than-expected earnings.
Swedish telephone equipment maker LM Ericsson, for instance, reported large
first-quarter pretax profits and high sales expectations for the rest of the
year. Finland's mobile-phone giant, Nokia, also performed well. Ironically,
until the 1980s, Nokia engaged in industries like rubber manufacturing before
finding its niche in the mobile-telephone industry. Nokia is now the world's
largest maker of mobile phones and provider of mobile and wired networks. Both
Ericsson and Nokia are top fund holdings.
If growth-oriented, TMT stocks were in favor for most of the period;
cyclical industries, consumer staples (foods, pharmaceuticals, etc.) and
basic-materials sectors were not.
The fund's heavy concentration in technology, media and telecommunication
stocks and its diversification across all capitalization levels greatly enhanced
fund returns.
WHAT SHAPED MARKET CONDITIONS OVER THE REPORTING PERIOD?
Europe's economic backdrop looked stronger than it has in years. Overall,
unemployment in Europe has declined and inflation has been kept in check. Also,
the introduction of a single currency, the euro (see sidebar), has helped
accelerate economic growth. Last October, for instance, in its semiannual World
Economic Outlook, the International Monetary Fund (the IMF) forecast 2.8% growth
for Euroland for 2000. In its latest outlook, the IMF predicts Euroland's 2000
growth rate to be 3.2%.
Recent tax reform is also changing the face of Europe. In Germany, there is
a proposal to eliminate the capital-gains tax on corporate asset sales,
currently 50%. This kind of reform will undoubtedly foster even greater
cross-country mergers and acquisitions.
MERGER-AND-ACQUISITION ACTIVITY APPEARS TO BE A DOMINANT TREND. HOW HAS THIS
AFFECTED THE FUND?
Merger mania has hit Europe. Once the domain of the United States, the dollar
volume of European deals quintupled from $200 billion annually in the early
1990s to almost $1 trillion in 1999.
Conditions in Europe have been ripe for takeovers as robust stock prices and
low inflation have made it difficult for companies to boost profits by raising
prices. In many high-tech industries, it is simpler to acquire a capability or a
technology than to actually build it. One of the largest cross-country
acquisitions was Vodafone AirTouch's hostile takeover of Germany's Mannesmann.
This acquisition makes Britain's Vodafone the largest com-
FUND PERFORMANCE
Six-month returns as of 4/30/00,
excluding sales charges
AIM EUROPEAN DEVELOPMENT FUND VS. BENCHMARK INDEXES
================================================================================
FUND CLASS A SHARES 55.36%
FUND CLASS B SHARES 54.75%
FUND CLASS C SHARES 54.78%
LIPPER EUROPEAN FUND INDEX 25.87%
MSCI EUROPE INDEX 8.31%
================================================================================
PORTFOLIO COMPOSITION
As of 4/30/00, based on total net assets
GEOGRAPHIC ALLOCATIONS
[PIE CHART]
<TABLE>
<CAPTION>
EURO NON EURO
---- --------
<S> <C> <C> <C>
GERMANY 13.67% UNITED KINGDOM 17.90%
FRANCE 16.65% SWITZERLAND 12.89%
FINLAND 6.16% SWEDEN 7.71%
NETHERLANDS 4.29% UNITED STATES 2.29%
SPAIN 2.15% DENMARK 1.95%
ITALY 1.54% NORWAY 1.10%
IRELAND 0.98% OTHER NON-EURO 9.82%
PORTUGAL 0.90%
</TABLE>
See important fund and index disclosures inside front cover.
AIM EUROPEAN DEVELOPMENT FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
pany in Europe. It is also the world's largest wireless service, with more than
40 million subscribers in 25 countries. What makes the Vodafone/Mannesmann
merger so compelling is that this means Europe is becoming more open to
cross-border consolidation. Vodafone is one of the fund's top holdings.
COULD YOU DISCUSS SOME OF YOUR HOLDINGS?
We continue to favor the TMT sector. For instance, Paris-based Societe
Television Francaise 1, commonly called TF1, is a fund holding. One of France's
leading television-production companies, TF1 produces programming for both
television and the Internet.
We also see strong earnings momentum in several German companies. German
electronics giant Siemens is streamlining its operations in a major
restructuring effort. Siemens is also due to combine its computer operations
with those of Japan's Fujitsu and its nuclear power business with that of
France's Framatome.
WHAT IS YOUR OUTLOOK FOR EUROPEAN MARKETS?
Recent market volatility aside, the outlook for Europe remains bright.
Enthusiasm for technology should remain strong, as Europe's Internet usage
growth rate is now higher than that in the United States. And despite the
uneasiness some investors feel toward the euro, government policies are
changing. This is evidenced by the socialist coalition in Germany proposing the
elimination of capital-gains taxes on corporate assets and other countries
considering tax-rate cuts. And in the new single-currency marketplace, European
companies realize that they must have critical mass to compete. Mergers and
acquisitions are still in an early stage in Europe; therefore, consolidation
will likely continue.
HOW LOW WILL THE EURO GO?
Introduced in January 1999, the euro (the single currency for 11 European
countries) initially strengthened, but has been in a downward spiral for much of
its young life. This year it fell below parity (level with the dollar) and
continued to set all-time lows in March and April; it even broke the U.S.$0.90
level at the beginning of May. Many investors thought that the ailing currency
would surely find support at parity or that European Central Bank (ECB) rate
hikes would prop it up. A strong U.S. economy has helped weaken the euro, and
perhaps the young and relatively inexperienced ECB does not yet command the
respect of a Greenspan Fed. The ECB has had the ominous task of applying a
single interest rate and a single growth policy for 11 countries--the largest of
which, Germany, has slow growth and the smaller of which, Ireland and Spain,
have very high growth. The euro's weakness, however, has helped boost earnings
for Euroland companies that export to the United States or that deal in
dollar-denominated goods. For instance, three Euroland tire makers (German's
Continental, France's Michelin and Italy's Pirelli) all reap the benefits of a
weak euro when they export their tires to the United States.
<TABLE>
<CAPTION>
==============================================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Nokia Oyj (Finland) 2.95% 1. Computers (Software & Services) 11.35%
2. Telefonaktiebolaget LM Ericsson A.B.-Class B (Sweden) 2.08 2. Communications Equipment 9.19
3. Tecan A.G. (Switzerland) 1.65 3. Broadcasting (Television, Radio & Cable) 6.45
4. Koninklijke (Royal) Philips Electronics N.V. (Netherlands) 1.65 4. Telephone 5.99
5. Straumann A.G. (Switzerland) 1.58 5. Electronics (Semiconductors) 5.72
6. ADVA A.G. Optical Networking (Germany) 1.57 6. Electronics (Component Distributors) 5.14
7. Siemens A.G. (Germany) 1.50 7. Services (Commercial & Consumer) 4.79
8. Havas Advertising S.A. (France) 1.50 8. Telecommunications (Cellular/Wireless) 4.38
9. Biacore International A.B. (Sweden) 1.48 9. Insurance (Multi-Line) 2.52
10. Vodafone AirTouch PLC (United Kingdom) 1.40 10. Machinery (Diversified) 2.39
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
==============================================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM EUROPEAN DEVELOPMENT FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
April 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-90.18%
DENMARK-1.95%
Navision Software A/S
(Computers-Software &
Services)(a) 42,300 $ 3,096,255
--------------------------------------------------------------
Vestas Wind Systems A/S
(Manufacturing-Specialized) 19,090 6,381,188
--------------------------------------------------------------
9,477,443
--------------------------------------------------------------
FINLAND-6.16%
Comptel Oyj (Computers-Software &
Services) 232,250 5,252,944
--------------------------------------------------------------
Elcoteq Network-Class A
(Manufacturing- Specialized) 71,000 2,267,313
--------------------------------------------------------------
Nokia Oyj (Communications
Equipment) 249,520 14,324,539
--------------------------------------------------------------
Perlos Oyj
(Electronics-Semiconductors) 167,700 6,217,368
--------------------------------------------------------------
Sonera Oyj
(Telecommunications-Cellular/
Wireless) 33,250 1,830,176
--------------------------------------------------------------
29,892,340
--------------------------------------------------------------
FRANCE-16.65%
ALTEN (Computers-Software &
Services)(a) 11,112 1,546,784
--------------------------------------------------------------
Altran Technologies S.A.
(Services-Commercial & Consumer) 21,900 4,479,055
--------------------------------------------------------------
Avenir Telecom
(Telecommunications-Cellular/
Wireless)(a) 19,500 4,944,445
--------------------------------------------------------------
AXA (Insurance-Multi-Line) 39,650 5,883,599
--------------------------------------------------------------
Banque Nationale de Paris
(Banks-Major Regional) 64,100 5,184,486
--------------------------------------------------------------
Galeries Lafayette
(Retail-Department Stores) 29,300 4,987,551
--------------------------------------------------------------
GFI Informatique
(Computers-Software & Services) 12,600 1,845,620
--------------------------------------------------------------
Havas Advertising S.A.
(Services-Advertising/ Marketing) 14,600 7,292,411
--------------------------------------------------------------
M6 Metropole Television
(Broadcasting-Television, Radio
& Cable) 9,400 5,383,560
--------------------------------------------------------------
NRJ S.A. (Broadcasting-Television,
Radio & Cable) 9,800 6,348,220
--------------------------------------------------------------
Pinault-Printemps-Redoute S.A.
(Retail-General Merchandise) 16,900 3,411,850
--------------------------------------------------------------
Royal Canin S.A. (Foods) 27,200 2,551,370
--------------------------------------------------------------
Societe Television Francaise 1
(Broadcasting-Television, Radio
& Cable) 7,600 5,206,603
--------------------------------------------------------------
SOITEC (Electronics-Component
Distributors)(a) 23,900 5,873,114
--------------------------------------------------------------
STMicroelectronics N.V.
(Electronics-Semiconductors) 34,000 6,492,879
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-(CONTINUED)
Total Fina Elf (Oil & Gas-Refining
& Marketing) 40,137 $ 6,094,628
--------------------------------------------------------------
Transiciel S.A. (Computers-Software
& Services) 24,100 3,218,763
--------------------------------------------------------------
80,744,938
--------------------------------------------------------------
GERMANY-13.67%
ADVA A.G. Optical Networking
(Communications Equipment)(a) 13,900 7,638,317
--------------------------------------------------------------
Brokat Infosystems A.G.
(Computers-Software &
Services)(a) 26,800 3,267,274
--------------------------------------------------------------
ce Consumer Electronic A.G.
(Electronics-Component
Distributors) 22,100 3,719,717
--------------------------------------------------------------
Epcos A.G. (Electronics-Component
Distributors)(a) 46,300 6,550,242
--------------------------------------------------------------
Gfk A.G. (Services-Commercial &
Consumer)(a) 65,719 2,630,810
--------------------------------------------------------------
Heyde A.G. (Computers-Software &
Services)(a) 24,200 3,742,917
--------------------------------------------------------------
Infineon Technologies A.G.
(Electronics- Semiconductors)(a) 66,750 4,600,233
--------------------------------------------------------------
Intershop Communications A.G.
(Computers- Software &
Services)(a) 12,650 5,622,132
--------------------------------------------------------------
Kamps A.G. (Retail-Food Chains) 92,000 3,009,073
--------------------------------------------------------------
Marschollek, Lautenschlaeger und
Partner A.G. (Services-Commercial
& Consumer) 8,000 4,236,029
--------------------------------------------------------------
Medion A.G. (Electronics-Component
Distributors) 42,500 3,731,317
--------------------------------------------------------------
Siemens A.G.
(Manufacturing-Diversified) 49,400 7,294,431
--------------------------------------------------------------
Singulus Technologies A.G.
(Machinery-Diversified)(a) 28,600 3,249,933
--------------------------------------------------------------
Software A.G. (Computers-Software &
Services)(a) 18,000 2,079,803
--------------------------------------------------------------
Telegate A.G. (Telephone)(a) 39,000 4,932,026
--------------------------------------------------------------
66,304,254
--------------------------------------------------------------
IRELAND-0.98%
Ryanair Holdings PLC-ADR
(Airlines)(a) 116,200 4,735,150
--------------------------------------------------------------
ITALY-1.54%
Gruppo Editoriale L'Espresso
(Publishing) 248,816 3,508,778
--------------------------------------------------------------
Telecom Italia Mobile S.p.A.
(Telecommunications-
Cellular/Wireless) 415,000 3,964,453
--------------------------------------------------------------
7,473,231
--------------------------------------------------------------
NETHERLANDS-4.29%
CMG PLC (Computers-Software &
Services) 68,100 4,367,995
--------------------------------------------------------------
Exact Holding N.V.
(Computers-Software &
Services)(a) 30,000 1,692,228
--------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-(CONTINUED)
Koninklijke (Royal) Philips
Electronics N.V. (Electrical
Equipment) 179,680 $ 8,021,613
--------------------------------------------------------------
KPNQwest N.V.
(Telecommunications-Long
Distance)(a) 100,500 4,178,575
--------------------------------------------------------------
United Pan-Europe Communications
N.V. (Broadcasting-Television,
Radio & Cable)(a) 70,400 2,563,918
--------------------------------------------------------------
20,824,329
--------------------------------------------------------------
NORWAY-1.10%
TGS Nopec Geophysical Co. ASA (Oil
& Gas-Exploration &
Production)(a) 484,000 5,355,239
--------------------------------------------------------------
PORTUGAL-0.90%
PT MULTIMEDIA-Servicos de
Telecomunicacoes e Multimedia
SGPS S.A. (Broadcasting-
Television, Radio & Cable)(a) 62,400 4,357,214
--------------------------------------------------------------
SPAIN-2.15%
NH Hoteles, S.A. (Investment
Management)(a) 561,600 6,310,154
--------------------------------------------------------------
Telefonica S.A. (Telephone)(a) 183,900 4,095,803
--------------------------------------------------------------
10,405,957
--------------------------------------------------------------
SWEDEN-7.71%
Biacore International A.B.
(Electronics-Instrumentation)(a) 197,400 7,160,955
--------------------------------------------------------------
Enea Data A.B. (Computers-Software
& Services) 16,600 2,925,706
--------------------------------------------------------------
Europolitan Holdings A.B.
(Telecommunications-
Cellular/Wireless) 289,800 4,431,588
--------------------------------------------------------------
NetCom A.B.-Class B
(Telecommunications-
Cellular/Wireless)(a) 85,500 6,079,194
--------------------------------------------------------------
OM Grupppen A.B. (Investment
Banking/ Brokerage) 162,000 6,726,644
--------------------------------------------------------------
Telefonaktiebolaget LM Ericsson
A.B.-Class B (Communications
Equipment) 113,500 10,097,053
--------------------------------------------------------------
37,421,140
--------------------------------------------------------------
SWITZERLAND-12.89%
ABB Ltd. (Engineering &
Construction) 41,100 4,617,039
--------------------------------------------------------------
Adecco S.A. (Services-Commercial &
Consumer) 7,200 5,914,659
--------------------------------------------------------------
Ares-Serono Group-Class B (Health
Care- Drugs-Generic & Other)(a) 1,520 4,672,511
--------------------------------------------------------------
Charles Voegele Holding A.G.
(Retail-Department Stores)(a) 16,150 3,140,929
--------------------------------------------------------------
Compagnie Financiere Richemont A.G.
(Tobacco) 2,575 6,263,716
--------------------------------------------------------------
Kudelski S.A.
(Electronics-Component
Distributors)(a) 490 5,046,502
--------------------------------------------------------------
Micronas Semiconductor Holding A.G.
(Electronics-Semiconductors)(a) 4,700 2,496,662
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SWITZERLAND-(CONTINUED)
Mikron Holding A.G.
(Machinery-Diversified) 8,200 $ 5,926,851
--------------------------------------------------------------
Schindler Holding A.G. (Machinery-
Diversified)(a) 1,700 2,426,880
--------------------------------------------------------------
Straumann A.G. (Health
Care-Specialized Services)(a) 7,110 7,661,051
--------------------------------------------------------------
Tecan A.G. (Health Care-Medical
Products & Supplies) 9,300 8,023,106
--------------------------------------------------------------
Zurich Allied A.G.
(Insurance-Multi-Line) 14,900 6,340,610
--------------------------------------------------------------
62,530,516
--------------------------------------------------------------
UNITED KINGDOM-17.90%
ARM Holdings PLC (Electronics-
Semiconductors)(a) 454,250 4,634,534
--------------------------------------------------------------
Autonomy Corp. PLC
(Computers-Software &
Services)(a) 20,000 2,660,000
--------------------------------------------------------------
Bookham Technology PLC
(Communications Equipment)(a) 77,600 3,535,554
--------------------------------------------------------------
Capita Group PLC
(Services-Commercial & Consumer) 232,850 5,973,649
--------------------------------------------------------------
COLT Telecom Group PLC
(Telephone)(a) 81,000 3,443,170
--------------------------------------------------------------
Dialog Semiconductor PLC
(Electronics-Semiconductors)(a) 30,000 3,302,574
--------------------------------------------------------------
J.D. Wetherspoon PLC (Leisure
Time-Products) 728,000 4,722,982
--------------------------------------------------------------
Jazztel PLC-ADR (Telephone)(a) 77,700 4,040,400
--------------------------------------------------------------
JJB Sports PLC (Retail-General
Merchandise) 345,000 3,131,413
--------------------------------------------------------------
Kewill Systems PLC
(Computers-Software &
Services)(a) 239,200 5,041,141
--------------------------------------------------------------
Kingston Communication (Hull) PLC
(Telecommunications-Long
Distance)(a) 306,300 3,831,179
--------------------------------------------------------------
Logica PLC (Computers-Software &
Services) 129,400 3,900,184
--------------------------------------------------------------
Marconi PLC (Communications
Equipment) 231,100 2,885,183
--------------------------------------------------------------
Matalan PLC (Retail-Discounters) 785,000 5,563,536
--------------------------------------------------------------
NDS Group PLC-ADR
(Broadcasting-Television, Radio &
Cable)(a) 44,000 2,486,000
--------------------------------------------------------------
Pace Micro Technology PLC
(Communications Equipment) 524,000 6,121,565
--------------------------------------------------------------
Redstone Telecom PLC (Telephone)(a) 416,000 2,818,723
--------------------------------------------------------------
Sage Group PLC (The)
(Computers-Software & Services) 330,500 3,660,252
--------------------------------------------------------------
Shell Transport & Trading Co. (Oil-
International Integrated) 718,700 5,849,299
--------------------------------------------------------------
Shire Pharmaceuticals Group PLC
(Health Care-Drugs-Generic &
Other)(a) 88,420 1,254,697
--------------------------------------------------------------
Trintech Group PLC-ADR
(Computers-Software &
Services)(a) 43,000 1,161,000
--------------------------------------------------------------
Vodafone AirTouch PLC (Telephone) 1,483,186 6,803,788
--------------------------------------------------------------
86,820,823
--------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED STATES-2.29%
NTL Inc. (Telephone)(a) 38,250 $ 2,926,125
--------------------------------------------------------------
UnitedGlobalCom Inc.-Class A
(Broadcasting-Television, Radio
& Cable)(a) 92,700 4,924,688
--------------------------------------------------------------
Viatel, Inc.
(Telecommunications-Long
Distance)(a) 84,700 3,239,775
--------------------------------------------------------------
11,090,588
--------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$355,695,175) 437,433,162
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-6.03%
STIC Liquid Assets Portfolio(b) 14,627,566 $ 14,627,566
--------------------------------------------------------------
STIC Prime Portfolio(b) 14,627,566 14,627,566
--------------------------------------------------------------
Total Money Market Funds (Cost
$29,255,132) 29,255,132
--------------------------------------------------------------
TOTAL INVESTMENTS-96.21% (Cost
$384,950,307) 466,688,294
--------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-3.79% 18,398,784
--------------------------------------------------------------
NET ASSETS-100.00% $485,087,078
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$384,950,307) $466,688,294
------------------------------------------------------------
Foreign currencies, at value (cost
$23,421,451) 23,021,607
------------------------------------------------------------
Receivables for:
Investments sold 6,078,174
------------------------------------------------------------
Capital stock sold 4,394,230
------------------------------------------------------------
Dividends and interest 564,188
------------------------------------------------------------
Investment for deferred compensation plan 11,557
------------------------------------------------------------
Other assets 56,870
------------------------------------------------------------
Total assets 500,814,920
------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 13,106,672
------------------------------------------------------------
Capital stock reacquired 1,612,076
------------------------------------------------------------
Deferred compensation plan 11,557
------------------------------------------------------------
Accrued advisory fees 376,639
------------------------------------------------------------
Accrued administrative services fees 11,317
------------------------------------------------------------
Accrued distribution fees 324,898
------------------------------------------------------------
Accrued transfer agent fees 102,312
------------------------------------------------------------
Accrued directors' fees 1,505
------------------------------------------------------------
Accrued operating expenses 180,866
------------------------------------------------------------
Total liabilities 15,727,842
------------------------------------------------------------
Net assets applicable to shares outstanding $485,087,078
============================================================
NET ASSETS:
Class A $268,004,842
============================================================
Class B $171,021,414
============================================================
Class C $ 46,060,822
============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 200,000,000
------------------------------------------------------------
Outstanding 10,507,613
============================================================
Class B:
Authorized 200,000,000
------------------------------------------------------------
Outstanding 6,822,055
============================================================
Class C:
Authorized 200,000,000
------------------------------------------------------------
Outstanding 1,836,071
============================================================
Class A:
Net asset value and redemption price per
share $ 25.51
------------------------------------------------------------
Offering price per share:
(Net asset value of $25.51 divided by
94.50%) $ 26.99
============================================================
Class B:
Net asset value and offering price per share $ 25.07
============================================================
Class C:
Net asset value and offering price per share $ 25.09
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$92,371) $ 1,304,718
------------------------------------------------------------
Interest 14,853
------------------------------------------------------------
Total investment income 1,319,571
------------------------------------------------------------
EXPENSES:
Advisory fees 1,771,395
------------------------------------------------------------
Administrative services fees 54,194
------------------------------------------------------------
Custodian fees 184,749
------------------------------------------------------------
Distribution fees -- Class A 370,491
------------------------------------------------------------
Distribution fees -- Class B 662,790
------------------------------------------------------------
Distribution fees -- Class C 155,931
------------------------------------------------------------
Transfer agent fees -- Class A 212,220
------------------------------------------------------------
Transfer agent fees -- Class B 191,304
------------------------------------------------------------
Transfer agent fees -- Class C 45,007
------------------------------------------------------------
Directors' fees 2,655
------------------------------------------------------------
Other 196,222
------------------------------------------------------------
Total expenses 3,846,958
------------------------------------------------------------
Less expenses paid indirectly (3,599)
------------------------------------------------------------
Net expenses 3,843,359
------------------------------------------------------------
Net investment income (loss) (2,523,788)
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES AND FOREIGN CURRENCIES
Net realized gain (loss) from:
Investment securities 39,656,172
------------------------------------------------------------
Foreign currencies (821,867)
------------------------------------------------------------
38,834,305
------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 43,680,963
------------------------------------------------------------
Foreign currencies (71,234)
------------------------------------------------------------
43,609,729
------------------------------------------------------------
Net gain on investment securities and foreign
currencies 82,444,034
------------------------------------------------------------
Net increase in net assets resulting from
operations $79,920,246
============================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 2000 and the year ended October 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
2000 1999
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (2,523,788) $ (1,719,011)
------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies 38,834,305 (5,794,428)
------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 43,609,729 43,126,751
------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 79,920,246 35,613,312
------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (80,229)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 122,036,127 2,449,615
------------------------------------------------------------------------------------------
Class B 75,355,389 3,977,973
------------------------------------------------------------------------------------------
Class C 29,614,749 (246,455)
------------------------------------------------------------------------------------------
Net increase in net assets 306,926,511 41,714,216
------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 178,160,567 136,446,351
------------------------------------------------------------------------------------------
End of period $485,087,078 $178,160,567
==========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $379,760,080 $152,753,815
------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (2,533,777) (9,989)
------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies 26,204,512 (12,629,793)
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 81,656,263 38,046,534
------------------------------------------------------------------------------------------
$485,087,078 $178,160,567
==========================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
April 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM European Development 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. 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 shares and Class C shares are sold
with a contingent deferred sales charge. Matters affecting each portfolio or
class will be 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 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 the 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 its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price on the valuation
date or absent a last sales price, at the closing bid price. 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 prices are not provided by
any of the above methods are valued based upon quotes furnished by
independent sources and are valued at the last bid price in the case of
equity securities and in the case of debt obligations, the mean between the
last bid and asked prices. Securities for which market quotations are 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 of the Company.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the
New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed
each day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the
customary trading session of the NYSE 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. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales 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 the accrual basis. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to use a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
D. 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 $12,347,305 which may be
carried forward to offset future taxable gains, if any, which expires, if
not previously utilized, in the year 2007.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
9
<PAGE> 12
F. 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.
G. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 investment advisory agreement,
the Fund pays an advisory fee to AIM 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. Under the terms of a
sub-advisory agreement between AIM and INVESCO Global Asset Management Limited
("IGAM"), AIM pays IGAM a fee at an annual rate of 0.20% of the first $500
million of the Fund's average daily net assets, plus 0.175% of the Fund's
average daily net assets in excess of $500 million.
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended April 30, 2000, AIM
was paid $54,194 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the six months ended April 30, 2000, AFS
was paid $244,477 for such services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Company has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.35% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C 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 Class C shares to selected dealers and financial institutions who furnish
continuing 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. During the six months ended April
30, 2000, the Class A, Class B and Class C shares paid AIM Distributors
$370,491, $662,790 and $155,931, respectively, as compensation under the Plans.
AIM Distributors received commissions of $285,769 from sales of the Class A
shares of the Fund during the six months ended April 30, 2000. 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,
2000, AIM Distributors received $6,523 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, 2000, the Fund paid legal fees of
$1,651 for services rendered by Kramer, Levin, Naftalis & Frankel LLP 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, 2000, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $2,220 and $1,379, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $3,599 during the six months ended April 30, 2000.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid to directors who are not an
"interested person" of AIM. The Company invests 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) $1,000,000,000 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. During the six
months ended April 30, 2000, 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 0.09% 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.
10
<PAGE> 13
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, 2000 was
$412,019,362 and $224,063,747, respectively. The amount of unrealized
appreciation (depreciation) of investment securities, for tax purposes, as of
April 30, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $101,238,009
---------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (19,733,841)
---------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 81,504,168
===========================================================================
</TABLE>
Cost of investments for tax purposes is $385,184,126.
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the six months ended April 30, 2000
and the year ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 2000 OCTOBER 31, 1999
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 8,182,114 $ 226,706,844 7,243,646 $ 103,416,688
------------------------------------------------------------------------------------------------------------------------
Class B 3,571,988 98,378,969 3,045,028 43,081,822
------------------------------------------------------------------------------------------------------------------------
Class C 1,566,080 42,307,253 2,148,542 29,835,245
------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A -- -- 5,672 76,739
------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (3,714,461) (104,670,717) (7,125,444) (101,043,812)
------------------------------------------------------------------------------------------------------------------------
Class B (890,787) (23,023,580) (2,797,703) (39,103,849)
------------------------------------------------------------------------------------------------------------------------
Class C (466,711) (12,692,504) (2,160,106) (30,081,700)
------------------------------------------------------------------------------------------------------------------------
8,248,223 $ 227,006,265 359,635 $ 6,181,133
========================================================================================================================
</TABLE>
NOTE 8-FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a Share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------
NOVEMBER 3, 1997
(DATE OPERATIONS
COMMENCED)
SIX MONTHS ENDED YEAR ENDED TO
APRIL 30, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
---------------- ----------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 16.42 $ 12.96 $ 10.00
----------------------------------------------------------- -------- ------- -------
Income from investment operations:
Net investment income (loss) (0.10) (0.11) (0.08)
----------------------------------------------------------- -------- ------- -------
Net gains on securities (both realized and unrealized) 9.19 3.58 3.04
----------------------------------------------------------- -------- ------- -------
Total from investment operations 9.09 3.47 2.96
----------------------------------------------------------- -------- ------- -------
Less distributions from net investment income -- (0.01) --
----------------------------------------------------------- -------- ------- -------
Net asset value, end of period $ 25.51 $ 16.42 $ 12.96
=========================================================== ======== ======= =======
Total return(b) 55.36% 26.81% 29.60%
=========================================================== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $268,005 $99,148 $76,686
=========================================================== ======== ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.73%(c) 1.88% 1.98%(d)
----------------------------------------------------------- -------- ------- -------
Without fee waivers and/or expense reimbursements 1.73%(c) 1.88% 2.15%(d)
=========================================================== ======== ======= =======
Ratio of net investment income (loss) to average net assets (1.03)%(c) (0.69)% (0.58)%(d)
=========================================================== ======== ======= =======
Portfolio turnover rate 67% 122% 93%
=========================================================== ======== ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average net assets of $212,872,400.
(d) Annualized.
11
<PAGE> 14
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------
NOVEMBER 3, 1997
(DATE OPERATIONS
SIX MONTHS ENDED YEAR ENDED COMMENCED)
APRIL 30, OCTOBER 31, TO
2000 1999 OCTOBER 31, 1998(a)
---------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 16.20 $ 12.87 $ 10.00
----------------------------------------------------------- -------- ------- -------
Income from investment operations:
Net investment income (loss) (0.17) (0.22) (0.18)(a)
----------------------------------------------------------- -------- ------- -------
Net gains on securities (both realized and unrealized) 9.04 3.55 3.05
----------------------------------------------------------- -------- ------- -------
Total from investment operations 8.87 3.33 2.87
----------------------------------------------------------- -------- ------- -------
Net asset value, end of period $ 25.07 $ 16.20 $ 12.87
=========================================================== ======== ======= =======
Total return(b) 54.75% 25.87% 28.70%
=========================================================== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $171,021 $67,074 $50,121
=========================================================== ======== ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.72%(d)
----------------------------------------------------------- -------- ------- -------
Without fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.89%(d)
=========================================================== ======== ======= =======
Ratio of net investment income (loss) to average net assets (1.76)%(c) (1.44)% (1.32)%(d)
=========================================================== ======== ======= =======
Portfolio turnover rate 67% 122% 93%
=========================================================== ======== ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $133,286,248.
(d) Annualized.
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------
NOVEMBER 3, 1997
(DATE OPERATIONS
SIX MONTHS ENDED YEAR ENDED COMMENCED)
APRIL 30, OCTOBER 31, TO
2000 1999 OCTOBER 31, 1998(a)
---------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 16.21 $ 12.88 $10.00
----------------------------------------------------------- ------- ------- ------
Income from investment operations:
Net investment income (loss) (0.15) (0.23) (0.18)
----------------------------------------------------------- ------- ------- ------
Net gains on securities (both realized and unrealized) 9.03 3.56 3.06
----------------------------------------------------------- ------- ------- ------
Total from investment operations 8.88 3.33 2.88
----------------------------------------------------------- ------- ------- ------
Net asset value, end of period $ 25.09 $ 16.21 $12.88
=========================================================== ======= ======= ======
Total return(b) 54.78% 25.85% 28.80%
=========================================================== ======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $46,061 $11,938 $9,639
=========================================================== ======= ======= ======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.72%(d)
----------------------------------------------------------- ------- ------- ------
Without fee waivers and/or expense reimbursements 2.46%(c) 2.63% 2.89%(d)
=========================================================== ======= ======= ======
Ratio of net investment income (loss) to average net assets (1.76)%(c) (1.44)% (1.32)%(d)
=========================================================== ======= ======= ======
Portfolio turnover rate 67% 122% 93%
=========================================================== ======= ======= ======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $31,357,491.
(d) Annualized.
12
<PAGE> 15
<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; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II SUB-ADVISOR
Director Edgar M. Larsen
Cortland Trust Inc. Senior Vice President INVESCO Global Asset
Management Limited
Edward K. Dunn Jr. Dana R. Sutton Cedar House
Chairman, Mercantile Mortgage Corp.; Vice President and Treasurer 41 Cedar Avenue
Formerly Vice Chairman and President, Hamilton, HM12 Bermuda
Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley
President, Mercantile Bankshares Vice President TRANSFER AGENT
Jack Fields Melville B. Cox A I M Fund Services, Inc.
Chief Executive Officer Vice President P.O. Box 4739
Texana Global, Inc.; Houston, TX 77210-4739
Formerly Member Mary J. Benson
of the U.S. House of Representatives Assistant Vice President and CUSTODIAN
Assistant Treasurer
Carl Frischling State Street Bank and Trust Company
Partner Sheri Morris 225 Franklin Street
Kramer, Levin, Naftalis & Frankel LLP Assistant Vice President and Boston, MA 02110
Assistant Treasurer
Robert H. Graham COUNSEL TO THE FUND
President and Chief Executive Officer Renee A. Friedli
A I M Management Group Inc. Assistant Secretary Ballard Spahr
Andrews & Ingersoll, LLP
Prema Mathai-Davis P. Michelle Grace 1735 Market Street
Chief Executive Officer, YWCA of the U.S.A. Assistant Secretary Philadelphia, PA 19103
Lewis F. Pennock Nancy L. Martin COUNSEL TO THE DIRECTORS
Attorney Assistant Secretary
Kramer, Levin, Naftalis & Frankel LLP
Louis S. Sklar Ofelia M. Mayo 919 Third Avenue
Executive Vice President Assistant Secretary New York, NY 10022
Hines Interests
Limited Partnership Lisa A. Moss DISTRIBUTOR
Assistant Secretary
A I M Distributors, Inc.
Kathleen J. Pflueger 11 Greenway Plaza
Assistant Secretary Suite 100
Houston, TX 77046
Samuel D. Sirko
Assistant Secretary
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS-Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund AIM Advisor International Value Fund provided leadership in the
AIM Blue Chip Fund AIM Asian Growth Fund mutual fund industry since 1976
AIM Capital Development Fund AIM Developing Markets Fund and managed approximately $176
AIM Constellation Fund(1) AIM Euroland Growth Fund(5) billion in assets for more than
AIM Dent Demographic Trends Fund AIM European Development Fund 7.4 million shareholders,
AIM Emerging Growth Fund AIM International Equity Fund including individual investors,
AIM Large Cap Growth Fund AIM Japan Growth Fund corporate clients and financial
AIM Large Cap Opportunities Fund AIM Latin American Growth Fund institutions, as of March 31,
AIM Mid Cap Equity Fund 2000.
AIM Mid Cap Growth Fund GLOBAL GROWTH FUNDS The AIM Family of
AIM Mid Cap Opportunities Fund(2) AIM Global Aggressive Growth Fund Funds--Registered Trademark-- is
AIM Select Growth Fund AIM Global Growth Fund distributed nationwide, and AIM
AIM Small Cap Growth Fund(3) AIM Global Trends Fund(6) today is the eighth-largest
AIM Small Cap Opportunities Fund(4) mutual fund complex in the
AIM Value Fund GLOBAL GROWTH & INCOME FUNDS United States in assets under
AIM Weingarten Fund AIM Global Utilities Fund management, according to
Strategic Insight, an
GROWTH & INCOME FUNDS GLOBAL INCOME FUNDS independent mutual fund monitor.
AIM Advisor Flex Fund AIM Global Income Fund
AIM Advisor Real Estate Fund AIM Strategic Income Fund
AIM Balanced Fund
AIM Basic Value Fund THEME FUNDS
AIM Charter Fund AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
INCOME FUNDS AIM Global Health Care Fund
AIM Floating Rate Fund AIM Global Infrastructure Fund
AIM High Yield Fund AIM Global Resources Fund
AIM High Yield Fund II AIM Global Telecommunications and Technology Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
TAX-FREE INCOME FUNDS
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Mid
Cap Opportunities Fund closed to new investors on March 21, 2000. (3) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (4) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (5) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65% of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (6) Effective
August 27, 1999, AIM Global Trends Fund was restructured to operate as a
traditional mutual fund. Before that date, the fund operated as a fund of funds.
For more complete information about any AIM fund(s), including sales charges and
expenses, ask your financial advisor or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money. If used as sales material after July 20, 2000, this report must be
accompanied by a current Quarterly Review of Performance for AIM Funds.
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[DALBAR LOGO APPEARS HERE] --Registered Trademark--
INVEST WITH DISCIPLINE
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