<PAGE> 1
ANNUAL REPORT / OCTOBER 31 2000
AIM GLOBAL INCOME FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
THE WATER LILY POND BY CLAUDE MONET
AIM GLOBAL INCOME FUND IS BRIDGING CONTINENTS TO BRING
SHAREHOLDERS NEW INVESTMENT OPPORTUNITIES. WIDE OCEANS ARE
NOW NO MORE OF A BARRIER TO GLOBAL INVESTING THAN THE TRAN-
QUIL POND DEPICTED IN MONET'S PAINTING. THE MANAGEMENT TEAM
HAS CONSTRUCTED A DIVERSE PORTFOLIO OF GOVERNMENT AND CORPO-
RATE BONDS FROM AROUND THE WORLD.
-------------------------------------
AIM Global Income Fund is for shareholders who seek a high level of current
income. The fund invests in a portfolio of debt issued by U.S. and foreign
governments and corporations.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Income 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 4.75% 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 The fund's average annual total returns (including sales charges) for the
period ended 9/30/00 (the most recent calendar quarter-end) are as follows.
Class A shares, one year, -5.66%; five years, 3.37%; inception (9/15/94),
5.25%. Class B shares, one year, -6.03%; five years, 3.57%; inception
(9/15/94), 5.56%. Class C shares, one year, -2.35%; inception (8/4/97),
0.97%.
o The 30-day yield is calculated using a formula defined by the Securities and
Exchange Commission. The formula is based on the portfolio's potential
earnings from dividends, interest, yield-to-maturity or yield-to-call of the
bonds in the portfolio, net of all expenses and annualized.
o The fund's annualized distribution rate reflects its most recent monthly
dividend distribution multiplied by 12 and divided by the most recent
month-end net asset value.
o Government securities (such as U.S. Treasury bills, notes and bonds) offer a
high degree of safety, and they guarantee the timely payment of principal
and interest if held to maturity. Fund shares are not insured, and their
value and yield will vary with market conditions.
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
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.
o The fund invests in higher-yielding, lower-rated corporate bonds, commonly
known as junk bonds, which have a greater risk of price fluctuation and loss
of principal and income than do U.S. government securities (such as U.S.
Treasury bills and bonds, the repayment of principal and interest of which
is guaranteed by the government if held to maturity).
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 Lehman Government/Credit Bond Index, which represents the
performance of intermediate- and long-term government and investment-grade
corporate debt securities, is compiled by Lehman Brothers, a well-known
global investment bank.
o The unmanaged Salomon Brothers World Government Bond Index represents the
performance of long-term foreign-government debt securities.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
represents the performance of the U.S. stock market.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they do not reflect sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NEITHER GUARANTEED
NOR INSURED 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 shareholders or to persons
who have received a current prospectus of the fund.
AIM GLOBAL INCOME FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
It's an honor to address you as the AIM Funds' new chairman.
[PHOTO OF I feel privileged to succeed Ted Bauer, who recently retired
Robert H. from the funds' board and will soon retire as A I M
Graham, Management Group's chairman after a long, successful career
Chairman of in the investment industry. Ted has always shown the highest
the Board of degree of integrity and commitment to excellence, and I have
THE FUND always admired him. I'm also proud to be part of the team
APPEARS HERE] that launched AIM almost 25 years ago. From the beginning,
AIM has been a very people-oriented, service-minded company,
and I plan to carry on the tradition for our shareholders,
financial advisors and employees.
UNCERTAIN MARKETS
The markets this year have been particularly volatile and
confusing for many investors, especially for those who have
only experienced the bull market of the 1990s. After almost
a decade of double-digit returns, the S&P 500 was down 1.81% year-to-date as of
October 31, 2000. But market returns in the 20% to 30% range, such as we have
seen in recent years, are not typical. If you expect these kinds of returns
every year, you'll be disappointed. Historically, markets decline in one out of
every four years. What we're seeing now is a normal downturn.
This appears to be a worldwide trend. Throughout 2000, overseas markets
generally have been more turbulent than their U.S. counterpart.
REASONS FOR OPTIMISM
While investors may need to temper their expectations, there are plenty of
reasons to be optimistic. Economic fundamentals remain strong, and many believe
that the Federal Reserve Board may have succeeded in bringing the economy to a
"soft landing." Gross domestic product growth slowed to 2.4% in the third
quarter from the rapid pace of about 7% a year ago. With this slowdown, it seems
unlikely that the Fed will raise interest rates in the near future, and stable
interest rates provide a solid environment for both stocks and bonds.
In Europe, the region's economic and investment future continues to look
bright despite the weak euro. Restructuring, merger activity and tax reform bode
well for European economies. In Asia, most analysts think the continuing
strength of the U.S. economy will help boost Asian stock markets.
THE VALUE OF ADVICE
The current environment illustrates the value of professional money management.
Knowing when to buy and sell takes expertise and discipline even in the best of
markets. During downturns, many investors may be tempted to make decisions based
on emotions instead of strategy. The wisest choice is to rely on a professional
money manager to make these decisions for you.
In these uncertain times, it's important to keep market volatility in
perspective. Mutual fund investing should be a long-term endeavor. Remember why
you're investing, whether it's for your retirement or your child's education,
and think about your time frame. If you're unsure about whether your investments
can meet your goals, visit your financial advisor for help.
In the following pages, your fund's portfolio managers discuss market
activity, how they managed your fund during the fiscal year and their near-term
outlook. 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 for your continued participation in The AIM Family of Funds
--Registered Trademark--.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
-------------------------------------
THE CURRENT
ENVIRONMENT
ILLUSTRATES THE VALUE
OF PROFESSIONAL
MONEY MANAGEMENT.
KNOWING WHEN TO BUY
AND SELL TAKES
EXPERTISE AND
DISCIPLINE EVEN IN THE
BEST OF MARKETS.
-------------------------------------
AIM GLOBAL INCOME FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
AIM GLOBAL INCOME FUND CONFRONTS ADVERSE BOND MARKET
GIVEN THIS YEAR'S MARKET VOLATILITY, HOW DID THE FUND PERFORM?
The fund continued to provide attractive current income to shareholders. As of
the end of the fiscal year on October 31, 2000, the fund's 30-day distribution
rates at net asset value were 7.27% for Class A shares and 6.73% for Class B and
Class C shares. The 30-day SEC yield at maximum offering price was 6.80% for
Class A shares and 6.64% for both Class B and Class C shares. Total returns for
the fiscal year, excluding sales charges, were -1.38% for Class A shares, -1.94%
for Class B shares and -1.84% for Class C shares. For the same period, the
return of its benchmark, the Salomon Brothers World Government Bond Index, was
-5.08%.
WHAT TRENDS HAVE AFFECTED BONDS THIS FISCAL YEAR?
A slowing economy, weaker corporate earnings and a strong dollar produced mixed
results. The best-performing sectors were U.S. government issues, especially
Treasuries, and bonds in emerging markets. The investment-grade market, both
domestic and foreign, did less well, and credit rated below-investment-grade
performed the worst. Foreign markets lost investment capital to the United
States because of the strong dollar. This left bond markets in Europe and Japan
struggling even though those countries' economies were reasonably healthy.
WHAT ABOUT DOMESTIC BONDS?
Toward the close of the reporting period, prices rose on Treasuries, government
agency bonds and mortgage securities, but lagged on corporate bonds, especially
high-yield issues. Since yields decline as prices rise, this pushed government
yields down and corporate yields up, widening yield spreads and hampering most
corporate sectors' performance. High-yield bonds exhibited some of the widest
spreads in a decade.
Early in 2000, the U.S. Treasury began buying back its own bonds, using the
federal surplus to reduce the public debt. Its "most wanted" were longer-term
bonds (15+ years). The declining supply of these boosted their prices, creating
an inverted yield curve (short-term yields higher than long-term yields) that
persisted all summer. By the end of September, only yields on bonds of a year or
less remained elevated; yields from one year to 30 years were nearly flat.
As the Federal Reserve Board (the Fed) continued raising interest rates
during the winter and spring to prevent rapid U.S. economic growth from sparking
inflation, investors' interest-rate anxiety kept the stock market jittery. This
intensified the demand for high-quality Treasuries and created one of the worst
markets for high-yield bonds since the early `90s.
The Fed stopped raising rates after May, as economic indicators began
showing declining growth. Corporate-bond performance slipped in September and
October because of profit concerns. High-yield bonds posted positive total
returns on the third quarter, but fell in October and remained in the red on the
year.
HOW HAVE FOREIGN BONDS FARED?
Both corporate and government bonds have been affected by the current worldwide
upswing in the economic cycle. Despite hiccups, world economies in general
performed so strongly this fiscal year that in almost every country, central
banks raised interest rates to control inflation. And whenever interest rates
rise, we see a dip in the selling prices of existing bonds. So in the aggregate,
global bonds have had negative returns. Losses were moderate in Japan and the
United Kingdom, but in continental Europe, bond prices were undercut by the
sinking value of the euro. In general, hedged positions gave positive results
while unhedged ones lost value, as hedging mitigated the slippage of foreign
currencies' value against the rising dollar.
-------------------------------------
READ THIS REPORT ONLINE!
Early in 2001, a new service will be
available--electronic delivery of fund
reports and prospectuses. Soon, you
can read the same AIM report you are
reading now--online. Once you sign up
for the service, we will send you a
link to the report via e-mail. If you
choose to receive your reports online,
you will not receive a paper copy by
mail. You may cancel the service at
any time by visiting our Web site.
Please visit our Web site at
www.aimfunds.com and go to "Your AIM
Account." Log into your account and
then click on the "View Other Account
Options" dropdown menu and select
"eDelivery."
-------------------------------------
-------------------------------------
THE BEST-PERFORMING SECTORS
WERE U.S. GOVERNMENT ISSUES,
ESPECIALLY TREASURIES, AND BONDS
IN EMERGING MARKETS.
-------------------------------------
See important fund and index disclosures inside front cover.
AIM GLOBAL INCOME FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
WHAT CHANGES WERE MADE TO ADDRESS THESE CHALLENGES?
In June, AIM Global Government Fund was merged into AIM Global Income Fund,
bringing with it a group of government fixed-income holdings. By staying
invested in a well-diversified portfolio of corporate holdings, the fund's
managers maintained a healthy asset allocation. This action also moderated the
effects of the portfolio's exposure to high-yield bonds, which faced a highly
adverse market this year even though high-yield issues usually thrive in
high-growth environments. As the year progressed, the fund managers continued
reducing the fund's exposure to foreign currencies through selective hedging to
protect its non-dollar component from the effects of the strengthening dollar.
WHAT INVESTMENTS DID YOU LIKE?
Because of their reliability, U.S. Treasury notes and bonds were especially
desirable. Other solid sovereign debt included bonds issued by the governments
of Canada, Uruguay and Greece. Among corporate holdings, we particularly liked:
o CSC Holdings, which owns and operates cable-television systems (including
Cablevision) and has ownership interests in companies that produce and
distribute national and regional entertainment and sports programming services.
o WMX Technologies, a major player in the waste-management industry.
o Time Warner Inc., the world's leading media company, active in publishing,
music, filmed entertainment, cable systems and cable networks.
WHAT IS YOUR OUTLOOK?
As of the close of the fiscal year, the prospects looked encouraging. In the
United States, interest rates have stabilized as the Fed has taken a respite
from its monetary tightening policy. The nation's unemployment rate is at its
lowest level in three decades, productivity is high and inflation is moderate,
except for oil prices. It appears that the Fed's hoped-for "soft landing" may be
taking place, and that the economy is likely to grow at a healthy but more
moderate rate, a favorable environment for bonds.
The global economy continues to expand, though more slowly. Several
developing nations have achieved a level of economic restructuring that makes
their bonds attractive. We expect upward pressure to continue on interest rates
in Western Europe, which has been doing well economically. We also foresee the
dollar remaining strong, which suggests we continue hedging the majority of the
fund's non-dollar allocation. Markets may continue to be volatile because of a
degree of uncertainty surrounding near-term economic, political and
international trends and developments.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
[ART WORK]
As of 10/31/00, based on total net assets
<TABLE>
<CAPTION>
==================================================================================================================================
% of PORTFOLIO GEOGRAPHIC
TOP 10 HOLDINGS COUPON MATURITY PORTFOLIO COMPOSITION ALLOCATION
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury Notes 5.62% 05/08 3.18% Government Bonds 19.36% Europe 9.10%
2. U.S. Treasury Notes 7.25 08/04 3.12 Cash & Other 4.08% South America 2.70%
3. U.S. Treasury Bonds 6.13 08/29 3.00 Corporate Bonds 76.56% Asia, Australia and Other 2.26%
4. Canadian Government 6.00 06/08 2.96 North America 85.94%
(Canada), Bonds
5. U.S. Treasury Notes 6.50 02/02 1.80
6. U.S. Treasury Notes 5.63 02/01 1.78
7. Republic Orient (Uruguay), 7.88 07/27 1.61
Unsec. Yankee Bonds
8. Hellenic Republic, Bonds 6.00 05/10 1.23
9. Waste Management, Inc. 7.10 08/26 1.15
Unsec. Putable Bonds
10. Federal National Mortgage 6.38 08/07 1.14
Association, Sr. Unsub.
Notes
The fund's portfolio composition 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 GLOBAL INCOME FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM GLOBAL INCOME FUND VS. BENCHMARK INDEXES
9/15/94-10/31/00
in thousands
================================================================================
AIM Global AIM Global Salomon
Income Fund, Income Fund, Brothers World Lehman Government/
Class A Class B Govt. Bond Credit Bond
Shares Shares Index Index
--------------------------------------------------------------------------------
9/15/94 9524 10000 10000 10000
10/94 9613 10079 10233.9 9837.64
10/95 11158 11647 11789.6 11427.6
10/96 12298 12772 12421.9 12265.8
10/97 13411 13855 12746.5 13105.3
10/98 13940 14323 14345.9 14451.9
10/99 13670 13984 13993 14355.9
10/00 13481 13713 13282.9 15379.1
$13,481 $13,713 $13,283 $15,379
Source: Lipper, Inc.
Past performance cannot 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.
ABOUT THIS CHART
This chart compares your fund to benchmark indexes. It is intended to give you
an idea of how your fund performed compared to these indexes over the period
9/15/94-10/31/00. (Please note that the data for the indexes are for the period
8/31/94-10/31/00.) It is important to understand the differences between your
fund and an index. An index measures the performance of a hypothetical
portfolio. A market index such as the Salomon Brothers World Government Bond
Index or the Lehman Government/Credit Bond Index is unmanaged, incurring no
sales charges, expenses or fees. If you could buy all the securities that make
up a market index, you would incur expenses that would affect the return on your
investment.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/00, including sales charges
================================================================================
CLASS A SHARES
Inception (9/15/94) 5.00%
5 years 2.84
1 year -6.02*
*-1.38% excluding sales charges
CLASS B SHARES
Inception (9/15/94) 5.29%
5 years 3.03
1 year -6.52*
*-1.94% excluding CDSC
CLASS C SHARES
Inception (8/4/97) 0.59%
1 year -2.75*
*-1.84% excluding CDSC
================================================================================
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 that
of its Class A shares due to differing fees and expenses. For fund performance
calculations and descriptions of the indexes cited on this page, please see the
inside front cover.
AIM GLOBAL INCOME FUND
4
<PAGE> 7
ANNUAL REPORT / FOR CONSIDERATION
BOND FUNDS CAN DIVERSIFY YOUR PORTFOLIO
--------------------------------------------------------------------------------
CHANCES ARE YOU'VE HEARD MORE ABOUT STOCKS THAN BONDS.
--------------------------------------------------------------------------------
Soaring equity markets in the 1990s focussed media attention on stocks and stock
funds.
But don't overlook bond funds. Because bonds often behave differently than
stocks, adding bond funds to your portfolio can potentially:
o Reduce the risk associated with investing only in stock funds
o Enhance total returns
o Provide a steady source of income
Here are a few of bonds' more important characteristics.
HOW BONDS DIFFER FROM STOCKS
Stocks represent ownership in a company; bonds are debt obligations. When you
buy a bond, you lend money to a government, agency or company. In return, the
borrower agrees to pay you back on a specific date. The borrower also agrees to
pay you interest, usually at specific intervals, until the obligation is
retired.
A bond's maturity is determined by the date when the entire loan and the
last interest payment are due. If a bond was issued on January 1, 2000, and the
entire loan must be paid off by January 1, 2030, the bond has a maturity of 30
years.
SEVERAL FACTORS DETERMINE INTEREST RATES, BOND PRICES
Generally, bonds with longer maturities have higher interest rates. That's
because there is usually a greater risk that a borrower will default on a loan
over a long period than a short period. Also, it is almost impossible to predict
economic conditions many years in the future. Hence, bonds with longer
maturities usually must offer higher interest rates to attract buyers.
But probably the most important factor determining a bond's interest rate is
the perceived ability of the borrower to repay. Several credit rating agencies,
including Standard & Poor's (S&P), assess this ability and assign a rating to a
bond issue. S&P's highest rating is AAA; its lowest is D. Generally, the lower a
bond's rating, the higher its interest rate.
Prevailing interest rates also are important in determining the rates of
newly issued bonds and are a key factor affecting bond prices. For instance, if
you own a bond with an interest rate of 7% and the current interest rate for new
bonds of similar quality and maturity is 6%, your bond is likely to command a
price higher than its face value in the marketplace. Conversely, the market
price of your bond will likely drop below face value if interest rates for new
bonds of similar quality and maturity rise above 7%.
PRICES VS. YIELDS
Bond prices and yields move in opposite directions. That's because a bond's
yield is determined by dividing its interest rate by its current market value.
For example, if the market price of a bond with a face value of $1,000 and a 10%
interest rate drops to $500, its yield rises to 20%. In assessing bond-market
trends, analysts tend to quote yields rather than prices. Thus, if analysts
report that yields are falling, that means prices are rising; if yields are
rising, bond prices are falling. While the financial media tend to focus on the
U.S Treasury market, there are other types of bonds.
U.S. GOVERNMENT /AGENCY ISSUES
[ART WORK]
U.S. Treasury bills, notes and bonds are considered the safest fixed-income
investments because they are backed by the full faith and credit of the U.S.
government. Treasury bills have maturities of less than one year; Treasury notes
from one to 10 years; Treasury bonds have maturities exceeding 10 years.
Historically, the 30-year-Treasury has been the benchmark for the performance of
the bond market in general. Many analysts now prefer to use the 10-year Treasury
note.
Early in 2000, the U.S. Treasury began buying back its longer-maturity
bonds, including its 30-year issues. The federal-government surplus is allowing
the Treasury to retire some of its debt prematurely. The perception is that the
Treasury may eventually retire all of its 30-year bonds and discontinue issuing
them.
In addition to the Treasury, Congress has authorized certain
federal-government agencies, such as the Government National Mortgage
Association (Ginnie Mae), to issue marketable debt securities. Agency-like
corporations operating under government charters, such as the Federal National
Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation
(Freddie Mac), also issue bonds.
Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac,
have been the subject of controversy. Though shareholder-owned, Freddie Mac and
Fannie Mae operate under federal charters that help ensure that lenders such as
savings and loans have enough money to make new loans and keep mortgage rates
affordable. Those federal
AIM GLOBAL INCOME FUND
5
<PAGE> 8
ANNUAL REPORT / FOR CONSIDERATION
charters exempt GSEs from state and local corporate income taxes, give them a
$2.25 billion line of credit with the Treasury and allow them to borrow at lower
interest rates than similarly rated corporations. This "implied government
guarantee" has been called into question. A bill has been proposed to remove
their lines of credit with the Treasury. As the wheels of government tend to
move slowly, this GSE debate will likely not be resolved soon.
MUNICIPAL BONDS
[ART WORK]
Municipal bonds (munis) are issued by state and local governments, including
cities, school districts and similar entities. Income from these bonds is
generally exempt from federal income taxes. Additionally, municipal bonds issued
in a state are usually exempt from state income taxes in that state. Munis
include revenue bonds, which are supported with income from projects such as
toll roads; and general obligation (GO) bonds, funded by tax dollars.
Because they are supported by tax dollars, GO bonds tend to be more
susceptible to the political climate than revenue bonds. Sometimes, state and
local governments find it difficult to raise taxes to support bond issues. This
has been less of an issue recently as many state and local governments have had
revenue surpluses. Retiring revenue bonds is largely dependent on the project's
ability to generate sufficient income.
CORPORATE BONDS
[ART WORK]
Corporate bonds are issued by companies raising money for working capital or for
capital expenditures such as plant construction or equipment purchases. U.S.
government bonds are generally exempt from state income taxes, and municipal
bonds are usually exempt from federal income taxes. Corporate bonds are fully
taxable. Corporate bonds, whether investment- or non-investment-grade, generally
have higher yields than Treasury issues of the same maturity. The difference
between these yields is often referred to as the spread. When yield
differentials are significant, spreads are said to be wide; when they are close
together, spreads are narrow.
HIGH-YIELD BONDS
[ART WORK]
High yield or junk bonds are below investment-grade---that is, they have been
assigned a rating of BB or lower from a credit-rating agency such as Standard &
Poor's based on an evaluation of the issuer's ability to pay off its
indebtedness. High yield bonds are considered riskier than investment-grade
bonds, so they generally have higher interest rates. Junk bonds may include
municipal and corporate debt securities and the government bonds of certain
nations.
Unlike other types of bonds, high yield securities tend to benefit from a
robust, rapidly growing economy. When the issuers of high yield bonds experience
greater revenue intake, they are better able to meet their debt obligations.
Conversely, high-yield bonds tend to underperform during periods of economic
uncertainty when investors tend to prefer higher-quality bonds, particularly
Treasuries.
FOREIGN BONDS
[ART WORK]
Foreign bonds include debt securities issued by non-U.S. governments,
corporations, cities and other entities in both developed and developing
nations. They can be denominated in U.S. dollars or foreign currencies. They are
fully taxable in the United States, and the strength of the dollar relative to
other currencies will affect returns for U.S. investors. It is important to note
that investing in developing nations involves greater risk than investing in
developed markets.
BOND MUTUAL FUNDS ALSO VARIED
Just as there are different types of bonds, there are different types of bond
mutual funds. Some invest in only one type of bond, such as U.S. Treasury
securities. Others invest in a variety of issues, such as foreign-government
bonds and domestic corporate bonds. Some invest in a combination of stocks and
bonds. There are bond funds for both conservative and more aggressive investors.
When investing in bond funds, remember that an investment's return is linked
to its risk. For bond funds, risk is directly related to a fund's maturity and
credit structure. The higher the return, the higher the risk. Conversely,
relatively safe investments offer relatively lower returns.
A fund's prospectus and statement of additional information discuss in more
detail the types of bonds contained in its portfolio and risk factors associated
with these securities
Your financial advisor is the best person to contact if you have any
questions about investing in bonds or a bond fund.
AIM GLOBAL INCOME FUND
6
<PAGE> 9
SCHEDULE OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. DOLLAR DENOMINATED BONDS &
NOTES-67.01%
AIR FREIGHT-0.33%
Atlas Air, Inc., Sr. Unsec. Notes,
10.75%, 08/01/05 $ 530,000 $ 551,200
==============================================================
AIRLINES-1.46%
Air 2 US-Series C, Equipment Trust
Ctfs., 10.13%, 10/01/20 (Acquired
10/28/99; Cost $450,000)(a) 450,000 463,248
--------------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 10.38%, 12/15/22 500,000 531,790
--------------------------------------------------------------
Unsec. Notes, 7.90%, 12/15/09 1,000,000 928,400
--------------------------------------------------------------
Dunlop Standard Aerospace Holdings
PLC (United Kingdom), Sr. Unsec.
Yankee Sub. Notes, 11.88%,
05/15/09 530,000 530,000
==============================================================
2,453,438
==============================================================
AUTOMOBILES-0.43%
DaimlerChrysler N.A. Holding Corp.,
Gtd. Notes, 8.00%, 06/15/10 700,000 721,931
==============================================================
BANKS (MAJOR REGIONAL)-1.62%
BB&T Corp., Putable Sub. Notes,
6.38%, 06/30/05 125,000 118,456
--------------------------------------------------------------
Crestar Financial Corp., Sub.
Notes, 8.75%, 11/15/04 75,000 78,792
--------------------------------------------------------------
Midland Bank PLC (United Kingdom),
Yankee Sub. Notes, 7.65%,
05/01/25 280,000 282,176
--------------------------------------------------------------
Regions Financial Corp., Putable
Sub. Notes, 7.75%, 09/15/24 500,000 509,135
--------------------------------------------------------------
Republic New York Corp.,
Sub. Deb., 9.50%, 04/15/14 370,000 414,766
--------------------------------------------------------------
Sub. Notes, 9.70%, 02/01/09 400,000 443,140
--------------------------------------------------------------
UBS Preferred Funding Trust I, Gtd.
Bonds, 8.62%, 10/29/49 855,000 865,715
==============================================================
2,712,180
==============================================================
BANKS (MONEY CENTER)-2.79%
BSCH Issuance Ltd. (Cayman
Islands), Gtd. Sub. Notes, 7.63%,
09/14/10 800,000 790,728
--------------------------------------------------------------
First Union Corp., Putable Sub.
Deb.,
6.55%, 10/15/35 1,500,000 1,442,775
--------------------------------------------------------------
7.50%, 04/15/35 1,000,000 999,890
--------------------------------------------------------------
NCNB Corp., Sub. Notes, 9.38%,
09/15/09 1,300,000 1,444,651
==============================================================
4,678,044
==============================================================
BANKS (REGIONAL)-2.40%
Banponce Trust I-Series A, Gtd.
Notes, 8.33%, 02/01/27 360,000 323,086
--------------------------------------------------------------
Mercantile Bancorp., Inc., Unsec.
Sub. Notes, 7.30%, 06/15/07 400,000 393,464
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BANKS (REGIONAL)-(CONTINUED)
NBD Bank N.A. Michigan, Putable
Sub. Deb., 8.25%, 11/01/24 $1,350,000 $ 1,419,471
--------------------------------------------------------------
Riggs Capital Trust II-Series C,
Gtd. Sec. Bonds, 8.88%, 03/15/27 570,000 410,423
--------------------------------------------------------------
Union Planters Bank N.A., Unsec.
Sub. Notes, 6.50%, 03/15/08 155,000 138,911
--------------------------------------------------------------
Union Planters Capital Trust, Gtd.
Bonds, 8.20%, 12/15/26 400,000 347,792
--------------------------------------------------------------
US Bancorp, Sub. Deb., 7.50%,
06/01/26 1,000,000 997,690
==============================================================
4,030,837
==============================================================
BEVERAGES (ALCOHOLIC)-0.23%
J Seagram & Sons, Gtd. Deb., 9.65%,
08/15/18 300,000 387,036
==============================================================
BROADCASTING (TELEVISION, RADIO & CABLE)-7.88%
Adelphia Communications Corp., Sr.
Unsec. Notes, 10.88%, 10/01/10 700,000 661,500
--------------------------------------------------------------
AT&T Corp.-Liberty Media Corp.,
Bonds, 7.88%, 07/15/09 85,000 82,170
--------------------------------------------------------------
Sr. Unsec. Deb., 8.25%, 02/01/30 1,050,000 937,734
--------------------------------------------------------------
British Sky Broadcasting Group PLC
(United Kingdom), Sr. Unsec. Gtd.
Yankee Notes, 8.20%, 07/15/09 665,000 615,504
--------------------------------------------------------------
Charter Communications Holdings,
LLC/Charter Communications
Holdings Capital Corp., Sr.
Unsec. Disc. Notes, 9.92%,
04/01/11(b) 1,000,000 590,000
--------------------------------------------------------------
Clear Channel Communications, Inc.,
Unsec. Deb., 7.25%, 10/15/27 1,300,000 1,148,654
--------------------------------------------------------------
Comcast Cable Communications,
Unsec. Notes, 8.50%, 05/01/27 1,000,000 1,074,580
--------------------------------------------------------------
Cox Enterprises, Inc., Notes,
8.00%, 02/15/07 (Acquired
02/16/00; Cost $297,759)(a) 300,000 301,263
--------------------------------------------------------------
CSC Holdings Inc.,
Sr. Unsec. Deb.,
7.63%, 07/15/18 1,000,000 893,820
--------------------------------------------------------------
7.88%, 02/15/18 1,000,000 916,810
--------------------------------------------------------------
Sr. Unsec. Notes, 7.88%, 12/15/07 1,875,000 1,818,487
--------------------------------------------------------------
Series B, Sr. Notes, 8.13%,
07/15/09 1,300,000 1,273,480
--------------------------------------------------------------
Fox Family Worldwide, Inc., Sr.
Unsec. Disc. Notes, 10.25%,
11/01/07(b) 940,000 690,900
--------------------------------------------------------------
Knology Holdings, Inc., Sr. Disc.
Notes, 11.88%, 10/15/07(b) 700,000 316,750
--------------------------------------------------------------
Lenfest Communications, Inc., Sr.
Unsec. Sub. Notes, 8.25%,
02/15/08 650,000 656,591
--------------------------------------------------------------
TCI Communications, Inc., Sr. Deb.,
8.75%, 08/01/15 750,000 777,615
--------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BROADCASTING (TELEVISION, RADIO &
CABLE)-(CONTINUED)
United Pan-Europe Communications
N.V. (Netherlands)-Series B, Sr.
Unsec. Disc. Yankee Notes,
13.75%, 02/01/10(b) $1,200,000 $ 462,000
==============================================================
13,217,858
==============================================================
BUILDING MATERIALS-0.26%
Dayton Superior Corp., Sr. Unsec.
Gtd. Sub. Notes, 13.00%, 06/15/09 450,000 429,750
==============================================================
CHEMICALS-0.20%
Agrium, Inc., Unsec. Yankee Notes,
7.00%, 02/01/04 350,000 335,559
==============================================================
COMMUNICATIONS EQUIPMENT-0.07%
ProNet Inc., Sr. Sub. Notes,
11.88%, 06/15/05 250,000 111,250
==============================================================
COMPUTERS (NETWORKING)-0.28%
Exodus Communications, Inc., Sr.
Unsec. Notes, 11.25%, 07/01/08 510,000 466,650
==============================================================
COMPUTERS (PERIPHERALS)-0.11%
Equinix Inc., Sr. Unsec. Notes,
13.00%, 12/01/07 250,000 188,125
==============================================================
CONSTRUCTION (CEMENT & AGGREGATES)-0.13%
Schuff Steel Co., Sr. Unsec. Gtd.
Sub. Notes, 10.50%, 06/01/08 350,000 222,250
==============================================================
CONSUMER FINANCE-2.25%
American General Finance Corp., Sr.
Notes, 8.45%, 10/15/09 270,000 284,467
--------------------------------------------------------------
Capital One Bank, Unsec. Notes,
7.25%, 05/01/06 1,450,000 1,370,757
--------------------------------------------------------------
Capital One Financial Corp., Sr.
Notes, 8.25%, 06/15/05 550,000 554,774
--------------------------------------------------------------
Household Finance Corp., Unsec.
Notes, 6.88%, 03/01/07 900,000 867,339
--------------------------------------------------------------
MBNA Capital I-Series A, Gtd.
Bonds, 8.28%, 12/01/26 835,000 697,601
==============================================================
3,774,938
==============================================================
ELECTRIC COMPANIES-3.67%
CILCORP Inc., Bonds, 9.38%,
10/15/29 1,000,000 1,107,820
--------------------------------------------------------------
Cleveland Electric Illuminating Co.
(The),
1st Mortgage, 6.86%, 10/01/08 500,000 474,930
--------------------------------------------------------------
Series D, Sr. Sec. Notes, 7.88%,
11/01/17 1,500,000 1,474,065
--------------------------------------------------------------
El Paso Electric Co.
Series D, Sec. First Mortgage
Bonds, 8.90%, 02/01/06 500,000 525,570
--------------------------------------------------------------
Series E, Sec. First Mortgage
Bonds, 9.40%, 05/01/11 1,000,000 1,055,790
--------------------------------------------------------------
Niagara Mohawk Holdings Inc.-Series
H, Sr. Unsec. Disc. Notes, 8.50%,
07/01/10(b) 1,400,000 1,133,062
--------------------------------------------------------------
Public Service Company of New
Mexico-Series A, Sr. Unsec.
Notes, 7.10%, 08/01/05 120,000 118,354
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
ELECTRIC COMPANIES-(CONTINUED)
Texas-New Mexico Power Co., Sr.
Sec. Notes, 6.25%, 01/15/09 $ 300,000 $ 268,557
==============================================================
6,158,148
==============================================================
ELECTRICAL EQUIPMENT-1.08%
Emerson Electric Co., Unsec. Notes,
7.13%, 08/15/10 1,000,000 1,004,130
--------------------------------------------------------------
GE Global Insurance Holdings Corp.,
Notes, 7.75%, 06/15/30 800,000 813,544
==============================================================
1,817,674
==============================================================
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.74%
Israel Electric Corp. Ltd.
(Israel),
Sr. Sec. Medium Term Yankee
Notes, 7.75%, 03/01/09 (Acquired
04/13/00-10/23/00; Cost
$949,217)(a) 1,000,000 939,350
--------------------------------------------------------------
Yankee Deb., 7.75%, 12/15/27
(Acquired 06/09/00; Cost
$307,293)(a) 350,000 301,689
==============================================================
1,241,039
==============================================================
ENGINEERING & CONSTRUCTION-0.38%
Washington Group International,
Inc., Sr. Unsec. Gtd. Notes,
11.00%, 07/01/10 (Acquired
06/28/00; Cost $744,465)(a) 750,000 639,375
==============================================================
ENTERTAINMENT-2.30%
Callahan Nordrhein Westfalen
(Denmark), Sr. Unsec. Yankee
Notes, 14.00%, 07/15/10 (Acquired
06/29/00-08/11/00; Cost
$523,438)(a) 525,000 509,250
--------------------------------------------------------------
Time Warner Inc.,
Deb.,
9.13%, 01/15/13 1,000,000 1,118,240
--------------------------------------------------------------
9.15%, 02/01/23 1,600,000 1,793,632
--------------------------------------------------------------
Gtd. Bonds, 6.95%, 01/15/28 500,000 447,950
==============================================================
3,869,072
==============================================================
FINANCIAL (DIVERSIFIED)-3.01%
AIG SunAmerica Global Financing I,
Sr. Unsec. Notes, 7.40%, 05/05/03
(Acquired 10/17/00; Cost
$335,415)(a) 330,000 335,577
--------------------------------------------------------------
AIG SunAmerica Global Financing II,
Sr. Sec. Notes, 7.60%, 06/15/05
(Acquired 06/08/00; Cost
$700,000)(a) 700,000 718,935
--------------------------------------------------------------
Citigroup Inc., Deb.,
Deb., 6.63%, 01/15/28 1,000,000 868,860
--------------------------------------------------------------
Unsec. Sub. Notes, 7.25%,
10/01/10 715,000 710,302
--------------------------------------------------------------
General Motors Acceptance Corp.,
Notes, 6.85%, 06/17/04 300,000 297,318
--------------------------------------------------------------
Heller Financial, Inc., Sr. Unsec.
Notes,
7.38%, 11/01/09 500,000 478,050
--------------------------------------------------------------
8.00%, 06/15/05 450,000 454,509
--------------------------------------------------------------
Pinnacle Partners, Sr. Notes,
8.83%, 08/15/04 (Acquired
08/02/00; Cost $1,000,000)(a) 1,000,000 1,016,010
--------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
FINANCIAL (DIVERSIFIED)-(CONTINUED)
Source One Mortgage Services Corp.,
Deb., 9.00%, 06/01/12 $ 150,000 $ 165,700
==============================================================
5,045,261
==============================================================
GAMING, LOTTERY & PARIMUTUEL COMPANIES-0.54%
Hollywood Casino Corp., Sr. Sec.
Gtd. Sub. Notes, 11.25%, 05/01/07 350,000 368,375
--------------------------------------------------------------
Park Place Entertainment Corp., Sr.
Unsec. Sub. Notes, 8.88%,
09/15/08(c) 550,000 541,750
==============================================================
910,125
==============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.15%
Warner Chilcott, Inc., Sr. Unsec.
Gtd. Sub. Notes, 12.63%,
02/15/08(c) 250,000 256,250
==============================================================
HOMEBUILDING-0.28%
K. Hovanian Enterprises Inc., Sr.
Unsec. Gtd. Notes, 10.50%,
10/01/07(c) 500,000 472,500
==============================================================
HOUSEHOLD PRODUCTS
(NON-DURABLES)-0.26%
Procter & Gamble Co. (The), Putable
Deb., 8.00%, 09/01/24 400,000 431,608
==============================================================
INSURANCE (LIFE/HEALTH)-0.09%
Torchmark Corp., Notes, 7.88%,
05/15/23 165,000 147,612
==============================================================
INSURANCE (PROPERTY-CASUALTY)-0.56%
Terra Nova Insurance PLC (United
Kingdom), Sr. Unsec. Gtd. Yankee
Notes,
7.00%, 05/15/08 500,000 469,825
--------------------------------------------------------------
7.20%, 08/15/07 500,000 477,245
==============================================================
947,070
==============================================================
INVESTMENT BANKING/BROKERAGE-2.18%
Lehman Brothers Holdings Inc.,
Notes, 8.50%, 08/01/15 1,390,000 1,440,513
--------------------------------------------------------------
Sr. Sub. Notes, 7.38%, 01/15/07 1,000,000 980,930
--------------------------------------------------------------
Series E, Medium Term Notes,
9.20%, 02/10/28(d) 1,100,000 90,761
--------------------------------------------------------------
Lehman Brothers Inc., Putable Sr.
Notes, 8.80%, 03/01/15 215,000 229,246
--------------------------------------------------------------
Merrill Lynch & Co., Unsec. Notes,
6.88%, 11/15/18 1,000,000 910,380
==============================================================
3,651,830
==============================================================
IRON & STEEL-0.03%
Acme Metals Inc., Sr. Unsec. Gtd.
Notes, 10.88%, 12/15/07(e) 438,000 59,130
==============================================================
LEISURE TIME (PRODUCTS)-0.17%
Marvel Enterprises, Inc., Sr.
Unsec. Gtd. Sub. Notes, 12.00%,
06/15/09 440,000 282,700
==============================================================
LODGING-HOTELS-0.06%
John Q. Hammons Hotels, Inc., Sec.
First Mortgage Notes, 9.75%,
10/01/05 100,000 93,750
==============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
MACHINERY (DIVERSIFIED)-0.26%
Actuant Corp., Sr. Unsec. Gtd. Sub.
Notes, 13.00%, 05/01/09 (Acquired
07/21/00; Cost $444,038)(a) $ 450,000 $ 438,750
==============================================================
MANUFACTURING (DIVERSIFIED)-0.96%
Glenoit Corp., Sr. Unsec. Gtd. Sub.
Notes, 11.00%, 04/15/07(e) 380,000 64,600
--------------------------------------------------------------
Honeywell International Inc.,
Notes, 7.50%, 03/01/10 1,500,000 1,550,100
==============================================================
1,614,700
==============================================================
MANUFACTURING (SPECIALIZED)-0.39%
First Wave Marine, Inc., Sr. Unsec.
Notes, 11.00%, 02/01/08 250,000 68,125
--------------------------------------------------------------
MMI Products, Inc.-Series B, Sr.
Unsec. Sub. Notes, 11.25%,
04/15/07 260,000 255,450
--------------------------------------------------------------
Tekni-Plex, Inc., Sr. Sub. Notes,
12.75%, 06/15/10(c) 365,000 333,975
==============================================================
657,550
==============================================================
METALS MINING-0.14%
Rio Algom Ltd. (Canada), Unsec.
Yankee Deb., 7.05%, 11/01/05 250,000 242,695
==============================================================
NATURAL GAS-3.65%
Coastal Corp. (The), Sr. Unsec.
Deb., 6.70%, 02/15/27 900,000 856,440
--------------------------------------------------------------
Dynegy Inc., Sr. Unsec. Deb.,
7.13%, 05/15/18 1,100,000 989,472
--------------------------------------------------------------
Enron Corp.-Series A, Medium Term
Notes, 8.38%, 05/23/05 1,300,000 1,353,820
--------------------------------------------------------------
KN Capital Trust III-Series B,
Unsec. Gtd. Bonds, 8.56%,
04/15/27 1,000,000 914,080
--------------------------------------------------------------
Northern Border Partners, L.P., Sr.
Unsec. Gtd. Notes, 8.88%,
06/15/10 (Acquired 09/07/00; Cost
$1,038,660)(a) 1,000,000 1,040,480
--------------------------------------------------------------
Nova Gas Transmission Ltd.
(Canada), Yankee Deb., 8.50%,
12/15/12 450,000 479,781
--------------------------------------------------------------
Sonat Inc., Unsec. Notes, 7.63%,
07/15/11 500,000 498,055
==============================================================
6,132,128
==============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-1.06%
Petroleum Geo-Services A.S.A.
(Norway), Yankee Notes, 7.50%,
03/31/07 1,820,000 1,778,013
==============================================================
OIL & GAS (EXPLORATION & PRODUCTION)-3.00%
Anadarko Petroleum Corp., Deb.,
7.73%, 09/15/96 1,200,000 1,198,980
--------------------------------------------------------------
Apache Crop., Sr. Unsec. Notes,
7.00%, 02/01/18 1,000,000 931,980
--------------------------------------------------------------
Statoil (Norway), Yankee Unsec.
Deb., 7.38%, 05/01/16 (Acquired
06/01/00; Cost $281,547)(a) 300,000 285,852
--------------------------------------------------------------
DevX Energy, Inc., Sr. Unsec. Gtd.
Sub. Notes, 12.50%, 07/01/08 160,000 112,800
--------------------------------------------------------------
ONEOK, Inc., Unsec. Notes, 7.75%,
08/15/06 400,000 404,220
--------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
OIL & GAS (EXPLORATION &
PRODUCTION)-(CONTINUED)
Parker & Parsley Petroleum Co., Sr.
Unsec. Notes, 8.25%, 08/15/07 $ 620,000 $ 607,929
--------------------------------------------------------------
Pogo Producing Co.-Series B, Sr.
Unsec. Sub. Notes, 10.38%,
02/15/09 500,000 527,500
--------------------------------------------------------------
Talisman Energy Inc. (Canada),
Yankee Deb., 7.13%, 06/01/07 250,000 244,150
--------------------------------------------------------------
Triton Energy Ltd. (Cayman
Islands), Sr. Yankee Notes,
8.88%, 10/01/07 (Acquired
09/27/00; Cost $325,000)(a) 325,000 325,000
--------------------------------------------------------------
Union Pacific Resources Group Inc.,
Unsec. Deb., 7.50%, 10/15/26 400,000 389,488
==============================================================
5,027,899
==============================================================
OIL & GAS (REFINING &
MARKETING)-1.48%
Giant Industries, Inc., Sr. Unsec.
Gtd. Sub. Notes, 9.00%, 09/01/07 346,000 323,510
--------------------------------------------------------------
Petroleos Mexicanos-Series P
(Mexico), Unsub. Yankee Notes,
9.50%, 09/15/27 800,000 813,760
--------------------------------------------------------------
Texas Petrochemical Corp., Sr.
Unsec. Sub. Notes, 11.13%,
07/01/06 560,000 462,000
--------------------------------------------------------------
Tosco Corp., Unsec. Deb., 7.80%,
01/01/27 900,000 877,842
==============================================================
2,477,112
==============================================================
OIL (DOMESTIC INTEGRATED)-1.37%
Amerada Hess Corp., Bonds, 7.88%,
10/01/29 900,000 920,241
--------------------------------------------------------------
Occidental Petroleum Corp., Sr.
Unsec. Notes, 8.45%, 02/15/29 1,300,000 1,375,803
==============================================================
2,296,044
==============================================================
OIL (INTERNATIONAL
INTEGRATED)-1.09%
YPF Sociedad Anonima (Argentina),
Yankee Bonds,
8.00%, 02/15/04 1,400,000 1,380,484
--------------------------------------------------------------
9.13%, 02/24/09 450,000 456,579
==============================================================
1,837,063
==============================================================
PAPER & FOREST PRODUCTS-0.25%
Domtar, Inc. (Canada), Unsec.
Yankee Deb., 9.50%, 08/01/16 400,000 413,500
==============================================================
PHOTOGRAPHY/IMAGING-0.32%
Polaroid Corp., Sr. Unsec. Notes,
11.50%, 02/15/06 670,000 539,350
==============================================================
POWER PRODUCERS (INDEPENDENT)-0.82%
AES Corp. (The), Sr. Unsec. Notes,
9.38%, 09/15/10 200,000 199,860
--------------------------------------------------------------
9.50%, 06/01/09 700,000 714,000
--------------------------------------------------------------
Kincaid Generation LLC, Sec. Bonds,
7.33%, 06/15/20 (Acquired
04/30/98; Cost $495,220)(a) 494,000 461,450
==============================================================
1,375,310
==============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
PUBLISHING (NEWSPAPERS)-1.98%
News America Holdings, Inc.,
Putable Notes,
Putable Notes, 8.45%, 08/01/34 $1,500,000 $ 1,496,970
--------------------------------------------------------------
Sr. Gtd. Deb., 9.25%, 02/01/13 1,250,000 1,346,475
--------------------------------------------------------------
Sr. Unsec. Gtd. Putable Bonds,
7.43%, 10/01/26 500,000 487,205
==============================================================
3,330,650
==============================================================
RAILROADS-0.42%
CSX Corp., Sr. Unsec. Putable Deb.,
7.25%, 05/01/27 350,000 348,173
--------------------------------------------------------------
Railamerica Transportation Corp.,
Sr. Unsec. Gtd. Sub. Notes,
12.88%, 08/15/10(c) 375,000 350,625
==============================================================
698,798
==============================================================
REAL ESTATE INVESTMENT TRUSTS-0.55%
ERP Operating L.P., Unsec. Notes,
7.13%, 10/15/17 600,000 520,848
--------------------------------------------------------------
Health Care REIT, Inc., Sr. Unsec.
Notes, 7.63%, 03/15/08 200,000 168,208
--------------------------------------------------------------
Spieker Properties, Inc., Unsec.
Deb., 7.35%, 12/01/17 250,000 227,532
==============================================================
916,588
==============================================================
RETAIL (SPECIALTY)-0.26%
Amazon.com, Inc., Conv. Deb.,
4.75%, 02/01/09 (Acquired
01/29/99; Cost $501,875)(a) 500,000 316,875
--------------------------------------------------------------
CSK Auto Inc.-Series A, Sr. Gtd.
Sub. Deb, 11.00%, 11/01/06 130,000 57,850
--------------------------------------------------------------
Neff Corp., Sr. Unsec. Gtd. Sub.
Notes, 10.25%, 06/01/08 200,000 70,000
==============================================================
444,725
==============================================================
SAVINGS & LOAN COMPANIES-0.89%
Dime Capital Trust I-Series A, Gtd.
Bonds, 9.33%, 05/06/27 250,000 228,095
--------------------------------------------------------------
Sovereign Bancorp, Inc., Medium
Term Sub. Notes, 8.00%, 03/15/03 600,000 581,268
--------------------------------------------------------------
St. Paul Bancorp, Inc., Sr. Unsec.
Notes, 7.13%, 02/15/04 200,000 195,794
--------------------------------------------------------------
Washington Mutual Cap I, Sec. Gtd.
Bonds, 8.38%, 06/01/27 200,000 180,384
--------------------------------------------------------------
Washington Mutual, Inc., Sub.
Notes, 8.25%, 04/01/10 300,000 303,810
==============================================================
1,489,351
==============================================================
SERVICES (COMMERCIAL &
CONSUMER)-0.13%
Avis Group Holdings, Inc., Sr.
Unsec. Gtd. Sub. Notes, 11.00%,
05/01/09 200,000 215,000
==============================================================
SERVICES (EMPLOYMENT)-0.14%
MSX International, Inc., Sr. Unsec.
Gtd. Sub. Notes, 11.38%, 01/15/08 260,000 240,500
==============================================================
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
SOVEREIGN DEBT-3.43%
Banque Cent de Tunisie (Tunisia),
Unsec. Yankee Bonds, 8.25%,
09/19/27 $1,750,000 $ 1,491,875
--------------------------------------------------------------
Newfoundland (Province of)
(Canada), Unsec. Yankee Deb.,
9.00%, 06/01/19 500,000 570,685
--------------------------------------------------------------
Quebec (Province of)
(Canada)-Series A, Medium Term
Putable Yankee Notes, 6.29%,
03/06/26 1,000,000 994,030
--------------------------------------------------------------
Republica Orient (Uruguay), Unsec.
Yankee Bonds, 7.88%, 07/15/27 3,000,000 2,692,500
==============================================================
5,749,090
==============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.60%
Crown Castle International Corp.,
Sr. Unsec. Notes, 10.75%,
08/01/11 300,000 309,750
--------------------------------------------------------------
Nextel International, Inc., Sr.
Notes, 12.75%, 08/01/10(c) 330,000 301,950
--------------------------------------------------------------
Spectrasite Holdings, Inc., Sr.
Unsec. Disc. Notes, 11.25%,
04/15/09(b) 775,000 403,000
==============================================================
1,014,700
==============================================================
TELECOMMUNICATIONS (LONG DISTANCE)-2.31%
360networks Inc. (Canada), Sr.
Unsec. Yankee
Sr. Unsec. Yankee Notes, 12.00%,
08/01/09 230,000 182,850
--------------------------------------------------------------
Sr. Yankee Notes, 12.50%,
12/15/05 430,000 378,400
--------------------------------------------------------------
Call-Net Enterprises, Inc.
(Canada), Sr. Unsec. Disc. Yankee
Notes, 8.94%, 08/15/08(b) 330,000 100,650
--------------------------------------------------------------
ECONOPHONE, Inc., Sr. Unsec. Notes,
13.50%, 07/15/07 750,000 378,750
--------------------------------------------------------------
Esprit Telecom Group PLC (United
Kingdom), Sr. Unsec. Yankee
Notes, 11.50%, 12/15/07 225,000 52,875
--------------------------------------------------------------
MCI Communications Corp., Sr.
Unsec. Putable Deb., 7.13%,
06/15/27 1,500,000 1,480,140
--------------------------------------------------------------
Primus Telecommunications Group,
Inc., Sr. Unsec. Notes, 11.25%,
01/15/09 750,000 386,250
--------------------------------------------------------------
Sprint Corp., Putable Deb., 9.00%,
10/15/19 200,000 218,836
--------------------------------------------------------------
Tele1 Europe B.V. (Netherlands),
Sr. Unsec. Yankee Notes, 13.00%,
05/15/09 500,000 432,500
--------------------------------------------------------------
Versatel Telecom International N.V.
(Netherlands), Sr. Yankee Notes,
13.25%, 05/15/08 340,000 260,100
==============================================================
3,871,351
==============================================================
TELEPHONE-3.85%
AT&T Canada Inc. (Canada), Sr.
Unsec. Yankee Notes, 7.65%,
09/15/06 370,000 363,336
--------------------------------------------------------------
CFW Communications Co., Sr. Notes,
13.00%, 08/15/10(c)(f) 535,000 473,475
--------------------------------------------------------------
Deutsche Telekom International
Finance B.V. (Netherlands),
Unsec. Unsub. Yankee Bonds,
8.00%, 06/15/10 800,000 818,040
--------------------------------------------------------------
ICG Services, Inc., Sr. Unsec.
Disc. Notes, 10.00%,
02/15/08(b)(e) 600,000 75,000
--------------------------------------------------------------
Intermedia Communications,
Inc.-Series B, Sr. Disc. Notes,
11.25%, 07/15/07(b) 700,000 584,500
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
TELEPHONE-(CONTINUED)
Koninklijke (Royal) KPN N.V.
(Netherlands), Sr. Unsec. Unsub.
Yankee Notes, 7.50%, 10/01/05
(Acquired 09/27/00; Cost
$899,424)(a) $ 900,000 $ 894,654
--------------------------------------------------------------
NTL Communications Corp.-Series B,
Sr. Unsec. Notes, 12.38%,
10/01/08(b) 825,000 482,625
--------------------------------------------------------------
NTL Inc.-Series B, Sr. Disc. Notes,
11.50%, 02/01/06(b) 450,000 420,750
--------------------------------------------------------------
Qwest Capital Funding, Unsec. Gtd.
Notes, 7.90%, 08/15/10 (Acquired
08/24/00; Cost $902,898)(a) 900,000 917,946
--------------------------------------------------------------
Verizon Global Funding
Corp.,-Series REGS, Conv. Euro
Bonds, 4.25%, 09/15/05 500,000 553,703
--------------------------------------------------------------
Williams Communications Group,
Inc., Sr. Unsec. Notes, 10.70%,
10/01/07 450,000 387,000
--------------------------------------------------------------
XO Communications, Inc., Sr. Unsec.
Notes, 10.75%, 11/15/08 550,000 484,000
==============================================================
6,455,029
==============================================================
TRUCKERS-0.19%
Travelcenters of America, Inc., Sr.
Unsec. Gtd. Sub. Notes, 10.25%,
04/01/07 290,000 314,650
==============================================================
WASTE MANAGEMENT-1.53%
Allied Waste North America
Inc.-Series B, Sr. Unsec. Gtd.
Sub. Notes, 10.00%, 08/01/09 300,000 261,000
--------------------------------------------------------------
Browning-Ferris Industries, Inc.,
Deb., 9.25%, 05/01/21 350,000 292,250
--------------------------------------------------------------
Waste Management, Inc.,
Sr. Unsec. Notes, 7.13%, 12/15/17 90,000 77,397
--------------------------------------------------------------
Unsec. Putable Notes, 7.10%,
08/01/26 2,000,000 1,937,120
==============================================================
2,567,767
==============================================================
Total U.S. Dollar Denominated
Bonds & Notes (Cost
$118,237,884) 112,442,503
==============================================================
<CAPTION>
PRINCIPAL
AMOUNT(g)
<S> <C> <C>
NON-U.S. DOLLAR DENOMINATED BONDS &
NOTES-13.36%
CANADA-6.31%
AT&T Canada Inc. (Telephone), Sr.
Unsec. Notes, 7.15%, 09/23/04 CAD 800,000 518,620
--------------------------------------------------------------
Bell Mobility Cellular Inc.
(Telecommunications-Cellular/Wireless),
Deb., 6.55%, 06/02/08 CAD 750,000 470,433
--------------------------------------------------------------
Canadian Government (Sovereign
Debt), Bonds, 6.00%, 06/01/08 CAD 7,520,000 4,970,574
--------------------------------------------------------------
Canadian Pacific Ltd.-Series D
(Manufacturing-Diversified),
Unsec. Medium Term Notes, 5.85%,
03/30/09 (Acquired 03/24/99; Cost
$661,308)(a) CAD 1,000,000 603,817
--------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(g) VALUE
<S> <C> <C>
CANADA-(CONTINUED)
Clearnet Communications Inc.
(Telecommunications-
Cellular/Wireless),
Sr. Disc. Notes,
10.40%, 05/15/08(b) CAD 1,200,000 $ 661,952
--------------------------------------------------------------
11.75%, 08/13/07(b) CAD 1,100,000 650,003
--------------------------------------------------------------
Clearnet Communications Inc.
(Telecommunications-
Cellular/Wireless),
Sr. Unsec. Disc. Notes,
10.75%, 02/15/09(b) CAD 1,300,000 683,068
--------------------------------------------------------------
Export Development Corp. (Sovereign
Debt), Sr. Unsec. Unsub. Notes,
6.50%, 12/21/04 NZD 415,000 159,086
--------------------------------------------------------------
Ontario (Province of) (Sovereign
Debt), Unsec. Unsub. Notes,
6.25%, 12/03/08 NZD 1,500,000 555,287
--------------------------------------------------------------
Poco Petroleums Ltd. (Oil &
Gas-Exploration & Production),
Medium Term Notes, 6.60%,
09/11/07 CAD 750,000 477,711
--------------------------------------------------------------
Rogers Cablesystems
(Broadcasting-Television, Radio &
Cable), Sr. Sec. Second Priority
Deb., 9.65%, 01/15/14 CAD 300,000 209,193
--------------------------------------------------------------
TransCanada PipeLines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 375,000 304,555
--------------------------------------------------------------
Westcoast Energy Inc.-Series V
(Natural Gas), Unsec. Deb.,
6.45%, 12/18/06 CAD 500,000 327,185
==============================================================
10,591,484
==============================================================
FRANCE-0.23%
Vivendi Environment (Waste
Management), Sr. Conv. Gtd.
Bonds, 1.50%, 01/01/05 EUR 150,000 385,291
==============================================================
GREECE-1.23%
Hellenic Republic (Sovereign Debt),
Bonds, 6.00%, 05/19/10 GRD 2,400,000 2,060,680
==============================================================
NETHERLANDS-1.35%
Grapes Communications N.V.
(Telecommunications-Cellular/Wireless),
Sr. Notes, 13.50%, 05/15/10
(Acquired 05/03/00; Cost
$589,420)(a)(f) EUR 650,000 300,634
--------------------------------------------------------------
Koninklijke (Royal) KPN N.V.
(Telephone), Sr. Unsec. Unsub.
Euro Bonds, 6.25%, 10/04/05 EUR 1,000,000 842,243
--------------------------------------------------------------
Mannesmann Finance B.V. (Machinery-
Diversified), Gtd. Unsec. Unsub.
Euro Notes, 4.75%, 05/27/09 EUR 690,000 516,342
--------------------------------------------------------------
Tecnost International N.V.
(Telephone)- Series E, Gtd.
Medium Term Notes, 6.13%,
07/30/09 EUR 290,000 228,548
--------------------------------------------------------------
Tele1 Europe B.V.
(Telecommunications-Long
Distance), Sr. Euro Notes,
11.88%, 12/01/09 EUR 500,000 371,183
==============================================================
2,258,950
==============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(g) VALUE
<S> <C> <C>
NEW ZEALAND-0.63%
Inter-American Development Bank
(Banks-Money Center), Unsec.
Bonds, 5.75%, 04/15/04 NZD 2,000,000 $ 755,289
--------------------------------------------------------------
International Bank for
Reconstruction &
Development-Class E (Banks-Money
Center), Unsec. Medium Term
Notes, 5.50%, 04/15/04 NZD 800,000 300,844
==============================================================
1,056,133
==============================================================
NORWAY-0.10%
Enitel ASA (Telecommunications-Long
Distance), Sr. Unsec. Unsub. Euro
Notes, 12.50%, 04/15/10(h) EUR 300,000 165,487
==============================================================
UNITED KINGDOM-1.12%
Airtours PLC (Services-Commercial &
Consumer), Conv. Sub. Notes,
5.75%, 01/05/04 (Acquired
12/09/98; Cost $494,636)(a) GBP 299,000 357,482
--------------------------------------------------------------
British Sky Broadcasting Group PLC
(Broadcasting-Television, Radio &
Cable), Sr. Gtd. Unsec. Unsub.
Notes, 7.75%, 07/09/09 GBP 450,000 639,689
--------------------------------------------------------------
Jazztel PLC (Telephone), Sr. Unsec.
Notes, 13.25%, 12/15/09 EUR 285,000 176,332
--------------------------------------------------------------
Sutton Bridge Financial Ltd.
(Electric Companies), Gtd. Euro
Bonds, 8.63%, 06/30/22 (Acquired
05/29/97; Cost $733,585)(a) GBP 450,000 701,723
==============================================================
1,875,226
==============================================================
UNITED STATES OF AMERICA-2.39%
Federal National Mortgage
Association (Sovereign Debt), Sr.
Unsub. Notes, 6.38%, 08/15/07 AUD 3,785,000 1,905,621
--------------------------------------------------------------
John Hancock Global Fund
(Insurance-Life/ Health), Sr.
Sec. Sub Medium Term Notes,
6.75%, 02/15/06 AUD 900,000 458,652
--------------------------------------------------------------
KFW International Finance
(Investment Banking/ Brokerage),
Gtd. Unsec. Unsub. Euro Medium
Term Notes, 7.25%, 07/16/07 AUD 3,100,000 1,653,137
==============================================================
4,017,410
==============================================================
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $26,030,027) 22,410,661
==============================================================
<CAPTION>
SHARES
<S> <C> <C>
STOCKS & OTHER EQUITY
INTERESTS-1.03%
BANKS (MAJOR REGIONAL)-0.05%
Societe Generale-Class A 1,400 79,485
==============================================================
BANKS (REGIONAL)-0.70%
First Republic Capital Corp.-Series
A-Pfd. (Acquired 05/26/99; Cost
$750,000)(a) 750 672,187
--------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
BANKS (REGIONAL)-(CONTINUED)
Westpac Banking Corp., STRYPES
Trust-$3.14 Conv. Pfd. 16,000 $ 495,000
==============================================================
1,167,187
==============================================================
BROADCASTING (TELEVISION, RADIO & CABLE)-0.00%
Knology Holdings Inc.-Wts.,
expiring 10/22/07 (Acquired
03/12/98; Cost $0)(a)(h) 700 1,750
==============================================================
BUILDING MATERIALS-0.01%
Dayton Superior Corp.-Wts.,
expiring 06/15/09 (Acquired
08/07/00; Cost $0)(a)(h) 450 9,225
==============================================================
COMMUNICATIONS EQUIPMENT-0.00%
Loral Space & Communications
Ltd.(i) 254 1,445
==============================================================
COMPUTERS (PERIPHERALS)-0.02%
Equinix Inc.-Wts., expiring
12/01/07 (Acquired 05/30/00; Cost
$0)(a)(h) 250 27,562
==============================================================
ELECTRICAL EQUIPMENT-0.00%
Electronic Retailing Systems
International, Inc.-Wts.,
expiring 02/01/04(h) 290 290
==============================================================
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-0.04%
Glaxo Wellcome PLC (United Kingdom) 2,607 75,071
==============================================================
RAILROADS-0.00%
Railamerica Transportation
Corp.-Wts., expiring 08/15/10
(Acquired 10/01/00; Cost
$0)(a)(h) 375 3,844
==============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.09%
WebLink Wireless, Inc.(i) 20,100 159,544
==============================================================
TELECOMMUNICATIONS (LONG DISTANCE)-0.07%
Enitel ASA (Norway)-Wts., expiring
04/03/05 (Acquired 07/14/00; Cost
$0)(a)(h) 300 1,909
--------------------------------------------------------------
Tele1 Europe B.V.-ADR
(Netherlands)(i) 8,806 69,347
--------------------------------------------------------------
Versatel Telecom International
N.V.-ADR (Netherlands)(i) 2,450 49,000
==============================================================
120,256
==============================================================
TELEPHONE-0.05%
Esat Telecom Group PLC
(Ireland)-Wts., expiring 02/01/07
(Acquired 06/17/97; Cost
$0)(a)(h) 350 81,550
==============================================================
Total Stocks & Other Equity
Interests (Cost $1,982,723) 1,727,209
==============================================================
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. GOVERNMENT AGENCY
SECURITIES-0.44%
FEDERAL HOME LOAN MORTGAGE CORP.
("FHLMC")-0.44%
Pass Through Certificates
8.50%, 03/01/10 (Cost $757,293) $ 724,249 743,935
==============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-13.61%
U.S. TREASURY BILLS-1.78%
5.63%,02/28/01(j) $3,000,000 2,991,810
==============================================================
U.S. TREASURY BONDS-3.00%
6.13%,08/15/29 4,850,000 5,028,577
==============================================================
U.S. TREASURY NOTES-8.83%
6.50%, 02/28/02 3,000,000 3,011,760
--------------------------------------------------------------
7.25%, 08/15/04 5,000,000 5,235,450
--------------------------------------------------------------
5.63%, 05/15/08 5,400,000 5,328,342
--------------------------------------------------------------
5.75%, 08/15/10 1,250,000 1,249,225
==============================================================
14,824,777
==============================================================
Total U.S. Treasury Securities
(Cost $22,749,828) 22,845,164
==============================================================
ASSET-BACKED SECURITIES-1.13%
AIRLINES-0.29%
Airplanes Pass Through Trust-Series
D, Gtd. Sub. Euro Bonds, 10.88%,
03/15/12 227,171 171,527
--------------------------------------------------------------
United Air Lines, Inc.-Series 95A2,
Pass Through Ctfs., 9.56%,
10/19/18 300,000 321,198
==============================================================
492,725
==============================================================
FINANCIAL (DIVERSIFIED)-0.72%
Beaver Valley II Funding Corp.,
Sec. Lease Obligations Deb.,
9.00%, 06/01/17 200,000 210,804
--------------------------------------------------------------
Citicorp Lease-Class A2, Series
1999-1, Pass Through Ctfs.,
8.04%, 12/13/19 (Acquired
06/01/00-07/14/00; Cost
$997,449)(a) 1,000,000 995,930
==============================================================
1,206,734
==============================================================
POWER PRODUCERS (INDEPENDENT)-0.12%
Panda Funding Corp., Series A-1,
Pooled Project Bonds, 11.63%,
08/20/12 197,179 194,221
==============================================================
Total Asset-Backed Securities
(Cost $1,965,123) 1,893,680
==============================================================
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-0.69%
STIC Liquid Assets Portfolio(k) 579,213 579,213
--------------------------------------------------------------
STIC Prime Portfolio(k) 579,213 579,213
==============================================================
Total Money Market Funds (Cost
$1,158,426) 1,158,426
==============================================================
TOTAL INVESTMENTS-97.27% (Cost
$172,881,304) 163,221,578
==============================================================
OTHER ASSETS LESS LIABILITIES-2.73% 4,585,991
==============================================================
NET ASSETS-100.00% $167,807,569
______________________________________________________________
==============================================================
</TABLE>
13
<PAGE> 16
Notes to Schedule of Investments:
(a) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The aggregate market value of these securities at 10/31/00
was $12,961,594, which represented 7.75% of the Fund's net assets.
(b) Discounted bond at purchase. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(c) Represents a security sold under Rule 144A, which is exempt from
registration and may be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1993, as amended.
(d) Zero coupon bond issued at a discount. The interest rate shown represents
the rate of original issue discount.
(e) Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(f) Consists of more than one class of securities traded together as a unit. In
addition to the security listed, each unit includes common or preferred
shares of the issuer.
(g) Foreign denominated security. Par value is denominated in currency
indicated.
(h) Acquired as part of a unit with or in exchange for other securities.
(i) Non-income producing security.
(j) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(k) The money market fund and the Fund are affiliated by having the same
investment advisor.
Investment Abbreviations:
ADR - American Depositary Receipt
AUD - Australian Dollar
CAD - Canadian Dollar
Conv. - Convertible
Ctfs. - Certificates
Deb. - Debentures
Disc. - Discounted
GBP - British Pound Sterling
GDR - Global Depositary Receipt
GRD - Greek Drachma
Gtd. - Guaranteed
NZD - New Zealand Dollar
Pfd. - Preferred
REGS - Regulation S
REIT - Real Estate Investment Trust
Sec. - Secured
Sr. - Senior
STRYPES - Structured Yield Product Exchangeable for Stock
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
Wts. - Warrants
See Notes to Financial Statements.
14
<PAGE> 17
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$172,881,304) $163,221,578
------------------------------------------------------------
Foreign currencies, at value (cost $304,158) 303,880
------------------------------------------------------------
Cash 2,061
------------------------------------------------------------
Receivables for:
Foreign currency contracts closed 203,267
------------------------------------------------------------
Investments sold 7,716,014
------------------------------------------------------------
Capital stock sold 99,409
------------------------------------------------------------
Dividends and interest 3,486,150
------------------------------------------------------------
Foreign currency contracts outstanding 626,792
------------------------------------------------------------
Investment for deferred compensation plan 26,673
------------------------------------------------------------
Other assets 25,431
============================================================
Total assets $175,711,255
============================================================
LIABILITIES:
Payables for:
Investments purchased 7,015,313
------------------------------------------------------------
Capital stock reacquired 202,651
------------------------------------------------------------
Dividends 282,126
------------------------------------------------------------
Foreign currency contracts closed 14,848
------------------------------------------------------------
Deferred compensation plan 26,673
------------------------------------------------------------
Accrued advisory fees 92,153
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 74,082
------------------------------------------------------------
Accrued directors' fees 1,571
------------------------------------------------------------
Accrued transfer agent fees 86,707
------------------------------------------------------------
Accrued operating expenses 103,327
============================================================
Total liabilities 7,903,686
============================================================
Net assets applicable to shares outstanding $167,807,569
____________________________________________________________
============================================================
NET ASSETS:
Class A $105,636,419
____________________________________________________________
============================================================
Class B $ 60,391,218
____________________________________________________________
============================================================
Class C $ 1,779,932
____________________________________________________________
============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 200,000,000
------------------------------------------------------------
Outstanding 11,851,374
____________________________________________________________
============================================================
Class B:
Authorized 200,000,000
------------------------------------------------------------
Outstanding 6,777,381
____________________________________________________________
============================================================
Class C:
Authorized 200,000,000
------------------------------------------------------------
Outstanding 199,782
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 8.91
------------------------------------------------------------
Offering price per share:
(Net asset value of $8.91 divided by
95.25%) $ 9.35
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 8.91
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 8.91
____________________________________________________________
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 9,182,039
------------------------------------------------------------
Dividends (net of foreign withholding tax of
$1,117) 132,351
------------------------------------------------------------
Dividends from affiliated money market funds 294,558
============================================================
Total investment income 9,608,948
============================================================
EXPENSES:
Advisory fees 818,240
------------------------------------------------------------
Administrative services fees 50,000
------------------------------------------------------------
Custodian fees 55,257
------------------------------------------------------------
Distribution fees -- Class A 356,923
------------------------------------------------------------
Distribution fees -- Class B 437,547
------------------------------------------------------------
Distribution fees -- Class C 17,521
------------------------------------------------------------
Transfer agent fees -- Class A 188,159
------------------------------------------------------------
Transfer agent fees -- Class B 115,184
------------------------------------------------------------
Transfer agent fees -- Class C 4,613
------------------------------------------------------------
Directors' fees 8,021
------------------------------------------------------------
Other 174,229
============================================================
Total expenses 2,225,694
============================================================
Less: Fees waived (531,491)
------------------------------------------------------------
Expenses paid indirectly (2,184)
============================================================
Net expenses 1,692,019
============================================================
Net investment income 7,916,929
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FOREIGN CURRENCY CONTRACTS:
Net realized gain (loss) from:
Investment securities (11,769,828)
------------------------------------------------------------
Foreign currencies 100,234
------------------------------------------------------------
Foreign currency contracts 1,532,812
============================================================
(10,136,782)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 572,832
------------------------------------------------------------
Foreign currencies (21,180)
------------------------------------------------------------
Foreign currency contracts 622,544
============================================================
1,174,196
============================================================
Net gain (loss) on investment securities,
foreign currencies and foreign currency
contracts (8,962,586)
============================================================
Net increase in net assets resulting from
operations $ 1,045,657
____________________________________________________________
============================================================
</TABLE>
See Notes to Financial Statements.
15
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 7,916,929 $ 6,368,021
------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and foreign currency contracts (10,136,782) (4,008,006)
------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies and foreign
currency contracts 1,174,196 (4,471,227)
==========================================================================================
Net increase (decrease) in net assets resulting from
operations (1,045,657) (2,111,212)
==========================================================================================
Distributions to shareholders from net investment income:
Class A (697,810) (3,538,334)
------------------------------------------------------------------------------------------
Class B (427,241) (2,065,556)
------------------------------------------------------------------------------------------
Class C (22,193) (102,985)
------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (4,541,889) (483,962)
------------------------------------------------------------------------------------------
Class B (2,529,211) (310,211)
------------------------------------------------------------------------------------------
Class C (95,826) (15,757)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 60,321,560 (1,856,726)
------------------------------------------------------------------------------------------
Class B 29,421,207 1,178,036
------------------------------------------------------------------------------------------
Class C 41,717 263,914
==========================================================================================
Net increase (decrease) in net assets 80,424,657 (9,042,793)
==========================================================================================
NET ASSETS:
Beginning of year 87,382,912 96,425,705
==========================================================================================
End of year $ 167,807,569 $87,382,912
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 317,756,543 $95,576,239
------------------------------------------------------------------------------------------
Undistributed net investment income (45,909) (45,192)
------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and foreign currency
contracts (140,850,904) (3,069,640)
------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and foreign currency
contracts (9,052,161) (5,078,495)
==========================================================================================
$ 167,807,569 $87,382,912
__________________________________________________________________________________________
==========================================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Income 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 high current income. Its secondary
objective is protection of principal and growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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 as of the
close of the customary trading session 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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$396,525, undistributed net realized gains decreased by $127,644,482 and paid
in capital increased by $127,247,958 as a result of differing book/tax
treatment of foreign currency transactions and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
C. Distributions -- Distributions from income are declared and paid monthly and
are recorded on ex-dividend date. Distributions from 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 $140,223,848 as of October 31, 2000 which may be carried
forward to offset future taxable gains, if any, which expires, if not
previously utilized, in the year 2008.
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 the 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an
17
<PAGE> 20
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.
Outstanding foreign currency contracts at October 31, 2000 were as follows:
<TABLE>
<CAPTION>
SETTLEMENT CONTRACT TO UNREALIZED
DATE DELIVER RECEIVE VALUE APPRECIATION
---------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
12/29/00 AUD 6,200,000 $ 3,404,793 $ 3,215,929 $188,864
12/11/00 AUD 1,500,000 835,740 777,863 57,877
11/06/00 CAD 5,675,000 3,837,571 3,716,192 121,379
01/10/01 CAD 6,500,000 4,334,200 4,263,460 70,740
12/29/00 EUR 4,500,000 3,945,825 3,829,545 116,280
12/29/00 NZD 4,400,000 1,817,420 1,745,768 71,652
----------- ----------- ----------- --------
$28,775,000 $18,175,549 $17,548,757 $626,792
=========== =========== =========== ========
</TABLE>
G. Bond Premiums -- It has been the policy of the Fund not to amortize market
premiums on bonds for financial reporting purposes. In November 2000, a
revised AICPA Audit and Accounting Guide, Audits of Investment Companies, was
issued and is effective for fiscal years beginning after December 15, 2000.
The revised Guide will require the Fund to amortize premium and discount on
all fixed-income securities. Upon initial adoption, the Fund will be required
to adjust the cost of its fixed-income securities by the cumulative amount of
amortization that would have been recognized had amortization been in effect
from the purchase date of each holding. Adopting this accounting principle
will not effect the Fund's net asset value, but will change the
classification of certain amounts between interest income and realized and
unrealized gain/loss in the Statement of Operations. The Fund expects that
the impact of the adoption of this principle will not be material to the
financial statements.
H. 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 0.70% of the first $1
billion of the Fund's average daily net assets, plus 0.65% of the Fund's average
daily net assets in excess of $1 billion. AIM has contractually agreed to waive
fees and reimburse expenses (excluding interest, taxes, dividend expense on
short sales, extraordinary items and increases in expenses due to offset
arrangements, if any) for Class A, Class B and Class C shares to the extent
necessary to limit total operating expenses of Class A shares to 1.25% (e.g. if
AIM waives 0.42% of Class A expenses, AIM will also waive 0.42% of Class B and
Class C expenses). During the year ended October 31, 2000, AIM waived fees of
$531,491.
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 year ended October 31, 2000, AIM was
paid $50,000 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 year ended October 31, 2000, AFS was
paid $180,411 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
0.50% 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 year ended October 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $356,923
$437,547 and $17,521, respectively, as compensation under the Plans.
AIM Distributors received commissions of $26,727 from sales of the Class A
shares of the Fund during the year ended October 31, 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 year ended October 31, 2000,
AIM Distributors received $6,061 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 year ended October 31, 2000, the Fund paid legal fees of $4,080 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
For the year ended October 31, 2000, the Fund received reductions in transfer
agency fees from AFS (an affiliate of AIM) of $1,638 and reductions in custodian
fees of $546 under expense offset arrangements which resulted in a reduction of
the Fund's total expenses of $2,184.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid to directors who are not an
"interested person" of AIM. The Company invests directors'
18
<PAGE> 21
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 Citibank, N.A. 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 year ended October 31,
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.
NOTE 6-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to not less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities. During
the year ended October 31, 2000, there were no securities on loan.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$218,113,120 and $207,030,385, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 1,448,230
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (11,108,220)
=========================================================
Net unrealized appreciation (depreciation)
of investment securities $ (9,659,990)
_________________________________________________________
=========================================================
Cost of investments for tax purposes is $172,881,568.
</TABLE>
NOTE 8-CAPITAL STOCK
Changes in capital stock outstanding during the years October 31, 2000 and 1999
were as follows:
<TABLE>
<CAPTION>
2000 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 2,364,069 $ 22,041,534 2,496,536 $ 26,051,117
----------------------------------------------------------------------------------------------------------------------
Class B 696,358 6,483,160 1,275,307 13,306,447
----------------------------------------------------------------------------------------------------------------------
Class C 70,602 655,664 101,598 1,053,223
======================================================================================================================
Issued as reinvestment of dividends:
Class A 423,455 3,901,231 315,101 3,238,097
----------------------------------------------------------------------------------------------------------------------
Class B 225,452 2,081,717 188,786 1,938,556
----------------------------------------------------------------------------------------------------------------------
Class C 9,446 87,470 9,111 93,556
======================================================================================================================
Issued in connection with acquisition:*
Class A 7,153,743 65,569,432 -- --
----------------------------------------------------------------------------------------------------------------------
Class B 4,551,701 41,673,944 -- --
----------------------------------------------------------------------------------------------------------------------
Class C 22,050 202,039 -- --
======================================================================================================================
Reacquired:
Class A (3,345,608) (31,190,637) (3,041,035) (31,145,940)
----------------------------------------------------------------------------------------------------------------------
Class B (2,239,193) (20,817,614) (1,370,398) (14,066,967)
----------------------------------------------------------------------------------------------------------------------
Class C (96,253) (903,456) (85,444) (882,865)
======================================================================================================================
9,835,822 $ 89,784,484 (110,438) $ (414,776)
______________________________________________________________________________________________________________________
======================================================================================================================
</TABLE>
* As of the close of business on June 16, 2000, the Fund acquired all the net
assets of AIM Global Government Income Fund pursuant to a plan of
reorganization approved by AIM Global Government Income Fund's shareholders on
May 31, 2000. The acquisition was accomplished by a tax-free exchange of
11,727,494 shares of the Fund for 13,800,813 shares of AIM Global Government
Income Fund outstanding as of the close of business on June 16, 2000. AIM
Global Government Income Fund's net assets at that date of $107,445,415,
including ($5,147,862) of unrealized (depreciation), were combined with those
of the Fund. The aggregate net assets of the Fund immediately before the
acquisition were $75,391,518.
19
<PAGE> 22
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------
2000 1999 1998 1997 1996(a)
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.72 $ 10.60 $ 10.93 $ 10.85 $ 10.74
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.66 0.67 0.71 0.72 0.79
--------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.79) (0.86) (0.27) 0.21 0.25
====================================================================================================================
Total from investment operations (0.13) (0.19) 0.44 0.93 1.04
====================================================================================================================
Less distributions:
Dividends from net investment income (0.13) (0.61) (0.61) (0.72) (0.81)
--------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (0.07) (0.13) (0.12)
--------------------------------------------------------------------------------------------------------------------
Returns of capital (0.55) (0.08) (0.09) -- --
====================================================================================================================
Total distributions (0.68) (0.69) (0.77) (0.85) (0.93)
====================================================================================================================
Net asset value, end of period $ 8.91 $ 9.72 $ 10.60 $ 10.93 $ 10.85
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(b) (1.38)% (1.94)% 3.95% 9.05% 10.22%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $105,636 $51,077 $58,115 $30,924 $21,926
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.25%(c) 1.25% 1.23% 1.25% 1.25%
--------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.71%(c) 1.67% 1.73% 1.86% 2.02%
====================================================================================================================
Ratio of net investment income to average net assets 6.97%(c) 6.54% 6.38% 6.54% 7.27%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 184% 93% 47% 61% 83%
____________________________________________________________________________________________________________________
====================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $71,384,527.
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000 1999 1998 1997 1996(a)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.72 $ 10.59 $ 10.92 $ 10.84 $ 10.73
-------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.61 0.62 0.65 0.67 0.74
-------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.79) (0.85) (0.27) 0.21 0.24
===================================================================================================================
Total from investment operations (0.18) (0.23) 0.38 0.88 0.98
===================================================================================================================
Less distributions:
Dividends from net investment income (0.12) (0.56) (0.55) (0.67) (0.75)
-------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (0.07) (0.13) (0.12)
-------------------------------------------------------------------------------------------------------------------
Returns of capital (0.51) (0.08) (0.09) -- --
===================================================================================================================
Total distributions (0.63) (0.64) (0.71) (0.80) (0.87)
===================================================================================================================
Net asset value, end of period $ 8.91 $ 9.72 $ 10.59 $ 10.92 $ 10.84
___________________________________________________________________________________________________________________
===================================================================================================================
Total return(b) (1.94)% (2.37)% 3.38% 8.48% 9.66%
___________________________________________________________________________________________________________________
===================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $60,391 $34,423 $36,525 $25,121 $16,787
___________________________________________________________________________________________________________________
===================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.75%(c) 1.75% 1.75% 1.76% 1.75%
-------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.21%(c) 2.17% 2.25% 2.37% 2.53%
===================================================================================================================
Ratio of net investment income to average net assets 6.47%(c) 6.04% 5.87% 6.03% 6.77%
___________________________________________________________________________________________________________________
===================================================================================================================
Portfolio turnover rate 184% 93% 47% 61% 83%
___________________________________________________________________________________________________________________
===================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $43,754,699.
20
<PAGE> 23
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------
AUGUST 4, 1997
YEAR ENDED (DATE SALES
OCTOBER 31, COMMENCED)
----------------------------- TO OCTOBER 31,
2000 1999 1998 1997(a)
------- ------- ------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.71 $ 10.59 $ 10.92 $10.76
---------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.60 0.62 0.66 0.15
---------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.77) (0.86) (0.28) 0.17
===============================================================================================================
Total from investment operations (0.17) (0.24) 0.38 0.32
===============================================================================================================
Less distributions:
Dividends from net investment income (0.12) (0.56) (0.55) (0.13)
---------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (0.07) (0.03)
---------------------------------------------------------------------------------------------------------------
Returns of capital (0.51) (0.08) (0.09) --
===============================================================================================================
Total distributions (0.63) (0.64) (0.71) (0.16)
===============================================================================================================
Net asset value, end of period $ 8.91 $ 9.71 $ 10.59 $10.92
_______________________________________________________________________________________________________________
===============================================================================================================
Total return(b) (1.84)% 2.47% 3.39% 2.99%
_______________________________________________________________________________________________________________
===============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 1,780 $ 1,884 $ 1,785 $ 242
_______________________________________________________________________________________________________________
===============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.75%(c) 1.75% 1.73% 1.76%(d)
---------------------------------------------------------------------------------------------------------------
Without fee waivers 2.21%(c) 2.17% 2.22% 2.37%(d)
===============================================================================================================
Ratio of net investment income to average net assets 6.47%(c) 6.04% 5.88% 6.03%(d)
_______________________________________________________________________________________________________________
===============================================================================================================
Portfolio turnover rate 184% 93% 47% 61%
_______________________________________________________________________________________________________________
===============================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $1,752,139.
(d) Annualized.
21
<PAGE> 24
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
AIM International Funds, Inc.:
We have audited the accompanying statement of assets and
liabilities of the AIM Global Income Fund (a portfolio of
AIM International Funds, Inc.), including the schedule of
investments, as of October 31, 2000, and the related
statement of operations for the year then ended, the
statement of changes in net assets for each of the years
in the two-year period then ended and the financial
highlights for each of the periods in the five-year
period then ended. These financial statements and
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States of
America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as
of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Global
Income Fund as of October 31, 2000, the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended and the financial highlights for each of the
periods in the five-year period then ended, in conformity
with accounting principles generally accepted in the
United States of America.
KPMG LLP
December 6, 2000
Houston, Texas
22
<PAGE> 25
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Global Income Fund (the "Fund"), a
portfolio of AIM International Funds, Inc., a Maryland corporation (the
"Company"), was held on May 3, 2000. The meeting was held for the following
purposes:
(1)* To elect the following Directors: Charles T. Bauer, Bruce L. Crockett, Owen
Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H.
Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2)* To approve an Agreement and Plan of Reorganization which provides for the
reorganization of the Company as a Delaware business trust.
(3) To approve a new Master Investment Advisory Agreement with A I M Advisors,
Inc.
(4) To approve changing the fundamental investment restrictions of the Fund.
(5) To approve changing the investment objective of the Fund so that it is
non-fundamental.
(6) To ratify the selection of KPMG LLP as independent accountants of the Fund
for the fiscal year ending in 2000.
The results of the voting on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
DIRECTORS/MATTER VOTES FOR AGAINST ABSTENTIONS
---------------- ----------- ------- -----------
<S> <C> <C> <C> <C>
(1)* Charles T. Bauer............................................ 158,870,829 N/A 4,812,986
Bruce L. Crockett........................................... 159,101,349 N/A 4,582,466
Owen Daly II................................................ 158,885,093 N/A 4,798,722
Edward K. Dunn, Jr. ........................................ 159,073,001 N/A 4,610,814
Jack M. Fields.............................................. 159,065,031 N/A 4,618,784
Carl Frischling............................................. 158,952,763 N/A 4,731,052
Robert H. Graham............................................ 159,111,735 N/A 4,572,080
Prema Mathai-Davis.......................................... 159,002,065 N/A 4,681,750
Lewis F. Pennock............................................ 159,038,704 N/A 4,645,111
Louis S. Sklar.............................................. 159,052,236 N/A 4,631,579
(2)* Adjournment of approval of an Agreement and Plan of
Reorganization which provides for the reorganization of the
Company as a Delaware business trust........................ 114,017,566 1 49,666,248**
(3) Approval of a new Master Investment Advisory Agreement with
A I M Advisors, Inc......................................... 3,948,589 64,650 883,795**
(4)(a) Approval of changing or eliminating the Fundamental
Restrictions on Issuer Diversification...................... 3,887,827 103,684 905,523**
(4)(b) Approval of changing the Fundamental Restriction on
Borrowing Money and Issuing Senior Securities............... 3,860,892 126,397 909,745**
(4)(c) Approval of changing the Fundamental Restriction on
Underwriting Securities..................................... 3,874,617 116,797 905,620**
(4)(d) Approval of changing the Fundamental Restriction on Industry
Concentration............................................... 3,892,118 99,812 905,104**
(4)(e) Approval of changing the Fundamental Restriction on
Purchasing or Selling Real Estate........................... 3,856,707 120,482 919,845**
(4)(f) Approval of changing the Fundamental Restriction on
Purchasing or Selling Commodities........................... 3,850,391 128,977 917,666**
(4)(g) Approval of changing the Fundamental Restriction on Making
Loans....................................................... 3,853,479 129,853 913,702**
(4)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's Assets in an Open-End Fund...... 3,847,771 119,344 929,919**
(4)(i) Approval of Eliminating the Fundamental Restriction on
Margin Transactions......................................... 3,826,808 154,888 915,338**
(4)(j) Approval of Eliminating the Fundamental Restriction on
Investments in Oil, Gas or Other Mineral Exploration or
Development Programs........................................ 3,856,493 123,197 917,344**
(5) Approval of changing the Investment Objective so that it is
Non-Fundamental............................................. 3,863,969 111,395 921,670**
(6) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 4,629,841 32,865 234,328
</TABLE>
The Special Meeting of Shareholders of the Company was reconvened on May
31, 2000. The following matter was then considered:
<TABLE>
<CAPTION>
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ----------- --------- -----------
<S> <C> <C> <C> <C>
(2)* Adjournment of approval of an Agreement and Plan of
Reorganization which provides for the reorganization of the
Company as a Delaware business trust........................ 133,442,713 3,500,075 36,919,454**
</TABLE>
23
<PAGE> 26
The Special Meeting of Shareholders of the Company was reconvened on June
16, 2000. The following matter was then considered:
<TABLE>
<CAPTION>
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ----------- --------- -----------
<S> <C> <C> <C> <C>
(2)* Approval of an Agreement and Plan of Reorganization which
provides for the reorganization of the Company as a Delaware
business trust.............................................. 148,826,209 4,003,592 28,921,784**
</TABLE>
This matter was not approved by Shareholders.
---------------
* Proposals 1 and 2 required approval by a combined vote of all the portfolios
of AIM International Funds, Inc.
** Includes Broker Non-Votes
---------------
Effective September 30, 2000, Charles T. Bauer retired from his positions as an
officer and director of the Company and Robert H. Graham succeeded Mr. Bauer as
Chairman of the Board.
24
<PAGE> 27
ABOUT YOUR FUND'S BOARD
The board of directors is elected by you to look after your interests as a
mutual-fund shareholder. Directors' responsibilities include choosing investment
advisors for your fund; keeping an eye on performance, operations and expenses;
making decisions regarding dividends and other duties.
Nine of your fund's 10 directors are independent. In other words, they have no
affiliation with AIM except as independent fund directors charged with
representing the interest of fund investors. Representing a cross section of
businesses and industries, they have achieved success and recognition in their
respective fields. They bring their considerable expertise and experience to
their positions as directors.
Listed below are the members of the board of directors of your mutual fund and
their respective titles.
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Robert H. Graham Robert H. Graham 11 Greenway Plaza
Chairman, President and Chairman and President Suite 100
Chief Executive Officer Houston, TX 77046
A I M Management Group Inc. Carol F. Relihan
Senior Vice President and Secretary INVESTMENT ADVISOR
Bruce L. Crockett
Director Gary T. Crum A I M Advisors, Inc.
ACE Limited; Senior Vice President 11 Greenway Plaza
Formerly Director, President, and Suite 100
Chief Executive Officer Edgar M. Larsen Houston, TX 77046
COMSAT Corporation Vice President
TRANSFER AGENT
Owen Daly II Dana R. Sutton
Formerly Director Vice President and Treasurer A I M Fund Services, Inc.
Cortland Trust Inc. P.O. Box 4739
Robert G. Alley Houston, TX 77210-4739
Albert R. Dowden Vice President
Chairman of the Board of Directors, CUSTODIAN
The Cortland Trust and DHJ Media, Inc.; and Melville B. Cox
Director, Magellan Insurance Company, Vice President State Street Bank and Trust Company
Formerly Director, President and 225 Franklin Street
Chief Executive Officer, Mary J. Benson Boston, MA 02110
Volvo Group North America, Inc.; and Assistant Vice President and
Senior Vice President, AB Volvo Assistant Treasurer COUNSEL TO THE FUND
Edward K. Dunn Jr. Sheri Morris Ballard Spahr
Chairman, Mercantile Mortgage Corp.; Assistant Vice President and Andrews & Ingersoll, LLP
Formerly Vice Chairman and President, Assistant Treasurer 1735 Market Street
Mercantile-Safe Deposit & Trust Co.; and Philadelphia, PA 19103
President, Mercantile Bankshares Jim A. Coppedge
Assistant Secretary COUNSEL TO THE DIRECTORS
Jack Fields
Chief Executive Officer Renee A. Friedli Kramer, Levin, Naftalis & Frankel LLP
Twenty First Century, Inc.; Assistant Secretary 919 Third Avenue
Formerly Member New York, NY 10022
of the U.S. House of Representatives P. Michelle Grace
Assistant Secretary DISTRIBUTOR
Carl Frischling
Partner Nancy L. Martin A I M Distributors, Inc.
Kramer, Levin, Naftalis & Frankel LLP Assistant Secretary 11 Greenway Plaza
Suite 100
Prema Mathai-Davis Ofelia M. Mayo Houston, TX 77046
Formerly Chief Executive Officer, Assistant Secretary
YWCA of the U.S.A. AUDITORS
Lisa A. Moss
Lewis F. Pennock Assistant Secretary KPMG LLP
Partner 700 Louisiana
Pennock & Cooper Kathleen J. Pflueger Houston, TX 77002
Assistant Secretary
Louis S. Sklar
Executive Vice President
Hines Interests
Limited Partnership
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Global Income Fund paid ordinary dividends in the amount of $0.681 per share
to Class A shareholders, and $0.628 per share to Class B and Class C
shareholders, respectively, during its tax year ended October 31, 2000. Of this
amount 0% is eligible for the dividends received deduction for corporations.
INCOME TAX INFORMATION
Of the total income dividends paid, 8.72% was derived from U.S. Treasury
Obligations.
<PAGE> 28
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
EQUITY FUNDS A I M Management Group Inc. has provided
leadership in the mutual fund industry
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS since 1976 and managed approximately
$183 billion in assets for more than
MORE AGGRESSIVE MORE AGGRESSIVE eight million shareholders, including
individual investors, corporate clients
AIM Small Cap Opportunities(1) AIM Latin American Growth and financial institutions, as of
AIM Mid Cap Opportunities(2) AIM Developing Markets September 30, 2000.
AIM Large Cap Opportunities(3) AIM European Small Company The AIM Family of Funds--Registered
AIM Emerging Growth AIM Asian Growth Trademark-- is distributed nationwide,
AIM Small Cap Growth(4) AIM Japan Growth and AIM today is the eighth-largest
AIM Aggressive Growth AIM International Emerging Growth mutual fund complex in the United States
AIM Mid Cap Growth AIM European Development in assets under management, according to
AIM Small Cap Equity AIM Euroland Growth Strategic Insight, an independent mutual
AIM Capital Development AIM Global Aggressive Growth fund monitor.
AIM Constellation AIM International Equity AIM is a subsidiary of AMVESCAP PLC,
AIM Dent Demographic Trends AIM Advisor International Value one of the world's largest independent
AIM Select Growth AIM Global Trends financial services companies with $414
AIM Large Cap Growth AIM Global Growth billion in assets under management as of
AIM Weingarten September 30, 2000.
AIM Mid Cap Equity MORE CONSERVATIVE
AIM Value II
AIM Charter SECTOR EQUITY FUNDS
AIM Value
AIM Blue Chip MORE AGGRESSIVE
AIM Basic Value
AIM Large Cap Basic Value AIM New Technology
AIM Balanced AIM Global Telecommunications and Technology
AIM Advisor Flex AIM Global Resources
AIM Global Financial Services
MORE CONSERVATIVE AIM Global Health Care
AIM Global Consumer Products and Services
AIM Global Infrastructure
AIM Advisor Real Estate
AIM Global Utilities
MORE CONSERVATIVE
FIXED-INCOME FUNDS
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Strategic Income AIM High Income Municipal
AIM High Yield II AIM Tax-Exempt Bond of Connecticut
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate
AIM Global Income AIM Tax-Exempt Cash
AIM Floating Rate(5)
AIM Intermediate Government MORE CONSERVATIVE
AIM Limited Maturity Treasury
AIM Money Market
MORE CONSERVATIVE
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from more
aggressive to more conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Large Cap Opportunities Fund closed to
new investors Sept. 29, 2000. (4) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (5) AIM Floating Rate Fund was restructured to offer
multiple share classes April 3, 2000. Existing shares were converted to Class B
shares, and Class C shares commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES
AND EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used as
sales material after Jan. 20, 2001, this report must be accompanied by a fund
Performance & Commentary or by an AIM Quarterly Review of Performance for the
most recent quarter end.
[DALBAR LOGO APPEARS HERE] [AIM LOGO APPEARS HERE]
--Regitered Trademark--
INVEST WITH DISCIPLINE
--Regitered Trademark--
A I M Distributors, Inc. GLI-AR-1
