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AIM V.I. MONEY MARKET FUND
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AIM V.I. Money Market Fund seeks to provide as high a level of current
income as is consistent with the preservation of capital and liquidity.
PROSPECTUS
MAY 3, 1999
This prospectus contains important
information. Please read it before
investing and keep it for future
reference.
An investment in the fund is not a
deposit of a bank and is not insured
or guaranteed by the Federal Deposit
Insurance Corporation or any other
government agency. There is a risk
that you could lose a portion or all
of your money.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
There can be no assurance that the
fund will be able to maintain a
stable net asset value of $1.00 per
share.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
-- Registered Trademark --
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AIM V.I. MONEY MARKET FUND
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Table of Contents
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INVESTMENT OBJECTIVE AND STRATEGIES 1
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PRINCIPAL RISKS OF INVESTING IN THE
FUND 1
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PERFORMANCE INFORMATION 3
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Annual Total Returns 3
Performance Table 3
FUND MANAGEMENT 4
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The Advisor 4
Advisor Compensation 4
OTHER INFORMATION 4
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Pricing of Shares 4
Taxes 4
Dividends and Distributions 4
Purchase and Redemption of Shares 4
FINANCIAL HIGHLIGHTS 5
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OBTAINING ADDITIONAL INFORMATION Back Cover
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The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and you should not rely on such other information or
representations.
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AIM V.I. MONEY MARKET FUND
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INVESTMENT OBJECTIVE AND STRATEGIES
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The fund's investment objective is to provide as high a level of current income
as is consistent with the preservation of capital and liquidity.
The fund seeks to meet this objective by investing only in high-quality U.S.
dollar-denominated short-term obligations, including
- - securities issued by the U.S. Government or its agencies
- - foreign government obligations
- - bankers' acceptances, certificates of deposit, and time deposits from U.S. or
foreign banks
- - repurchase agreements
- - commercial paper
- - taxable municipal securities
- - master notes
- - cash equivalents
The fund may invest up to 100% of its total assets in obligations issued by
banks. The fund may invest up to 25% of its total assets in foreign bank
obligations, limited to Eurodollar obligations (U.S. dollar-denominated
obligations issued by a foreign branch of a domestic bank), Yankee dollar
obligations (U.S. dollar-denominated obligations issued by a domestic branch of
a foreign bank), and obligations of foreign branches of foreign banks. No limit
applies to Eurodollar obligations unconditionally guaranteed by the domestic
parent of the foreign branch, or Yankee dollar obligations, if the U.S. branch
of the foreign bank is subject to the same regulations as U.S. banks.
The portfolio managers focus on securities that they believe have favorable
prospects for current income, consistent with their concerns for preservation of
capital and liquidity. The portfolio managers usually hold portfolio securities
to maturity, but may sell a particular security when they deem it advisable,
such as when any of the factors above materially changes.
PRINCIPAL RISKS OF INVESTING IN THE FUND
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An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the fund.
Additionally, the fund's yield will vary as the short-term securities in its
portfolio mature and the proceeds are reinvested in securities with different
interest rates.
The following factors could reduce the fund's income and/or share price:
- - interest rates could rise sharply, causing the value of the fund's securities,
and share price, to drop
- - any of the fund's holdings could have its credit rating downgraded or could
default
- - the risks generally associated with concentrating investments in the banking
industry, such as interest rate risk, credit risk and regulatory developments
relating to the banking and financial services industries
- - the risks generally associated with dollar-denominated foreign investments,
including political and economic upheaval, seizure or nationalization of
deposits, imposition of taxes or other restrictions on the payment of
principal and interest.
The prices of foreign securities may be further affected by other factors,
including:
- - Currency exchange rates--The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
- - Political and economic conditions--The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
- - Regulations--Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
- - Markets--The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid
and more volatile than U.S. securities.
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devaluated their currencies against the U.S.
dollar, thereby causing the value of investments in companies located in those
countries to decline. Transaction costs are often higher in developing countries
and there may be delays in settlement procedures.
If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses
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AIM V.I. MONEY MARKET FUND
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arising from decline in the value of those securities, reduced levels of income
and expenses of enforcing its rights.
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are
working to avoid year 2000-related problems in its systems and to obtain
assurances that other service providers are taking similar steps. Year 2000
problems may also affect issuers in whose securities the fund invests.
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PERFORMANCE INFORMATION
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The bar chart shown below provides an indication of the risks of investing in
the fund. The fund's past performance is not necessarily an indication of its
future performance. The bar chart and performance table shown do not reflect
charges at the separate account level. If they did, the performance shown would
be lower.
ANNUAL TOTAL RETURNS
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The following bar chart shows changes in the performance of the fund's shares
from year to year.
[GRAPH]
<TABLE>
<CAPTION>
Annual
Year Ended Total
December 31 Return
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<S> <C>
1994 ....................................... 3.64%
1995 ....................................... 5.70%
1996 ....................................... 4.97%
1997 ....................................... 5.14%
1998 ....................................... 5.06%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
1.45% (quarter ended September 30, 1995) and the lowest quarterly return was
0.60% (quarter ended March 31, 1994).
PERFORMANCE TABLE
The following performance table reflects the fund's performance over the periods
indicated.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
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(for the periods ended SINCE INCEPTION
December 31, 1998) 1 YEAR 5 YEARS INCEPTION DATE
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AIM V.I. Money Market Fund 5.06% 4.90% 4.59% 05/05/93
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</TABLE>
The AIM V.I. Money Market Fund's seven day yield on December 31, 1998 was
4.61%. For the current seven day yield, call (800) 347-4246.
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AIM V.I. MONEY MARKET FUND
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FUND MANAGEMENT
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THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor. The
advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
The advisor supervises all aspects of the fund's operations and provides
investment advisory services to the fund, including obtaining and evaluating
economic, statistical and financial information to formulate and implement
investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of 0.40% of average daily net assets.
OTHER INFORMATION
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PURCHASE AND REDEMPTION OF SHARES
The fund ordinarily effects orders to purchase and redeem shares at the fund's
next computed net asset value after it receives an order. Life insurance
companies participating in the fund serve as the fund's designee for receiving
orders of separate accounts that invest in the fund.
PRICING OF SHARES
The fund prices its shares based on its net asset value. The fund values
short-term investments maturing within 60 days at amortized cost, which
approximates market value. The fund values all of its securities based on the
amortized cost method. Securities and other assets quoted in foreign currencies
are valued in U.S. dollars based on the prevailing exchange rates on that day.
In addition, if, between the time trading ends on a particular security and the
close of the New York Stock Exchange (NYSE), events occur that materially affect
the value of the security, the fund may value the security at its fair value as
determined in good faith by or under the supervision of the Board of Directors.
The effect of using fair value pricing is that the fund's net asset value will
be subject to the judgment of the Board of Directors or its designee instead of
being determined by the market. The fund determines the net asset value of its
shares as of the close of the NYSE on each day the NYSE is open for business.
TAXES
The amount, timing and character of distributions to the separate account may be
affected by special tax rules applicable to certain investments purchased by the
fund. Holders of variable contracts should refer to the prospectus for their
contracts for information regarding the tax consequences of owning such
contracts and should consult their tax advisers before investing.
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS
The fund generally declares and pays dividends, if any, daily to separate
accounts of participating life insurance companies.
CAPITAL GAINS DISTRIBUTIONS
The fund may distribute net realized short-term gains, if any, frequently to
separate accounts of participating life insurance companies.
At the election of participating life insurance companies, dividends and
distributions are automatically reinvested at net asset value in shares of the
fund.
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FINANCIAL HIGHLIGHTS
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The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
The table shows the financial highlights for a share of the fund outstanding
during each of the fiscal years (or periods) indicated.
This information has been audited by Tait, Weller & Baker, whose report, along
with the fund's financial statements, is included in the fund's annual report,
which is available upon request.
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, JANUARY 31,
1998 1997 1996 1995 1995 1994
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Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.05 0.05 0.05 0.05 0.04 0.02
Less distributions:
Dividends from net investment income (0.05) (0.05) (0.05) (0.05) (0.04) (0.02)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 5.06% 5.14% 4.97% 5.69%(a) 3.98% 2.27%(a)
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Ratios/supplemental data:
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Net assets, end of period (000s omitted) $64,090 $58,635 $63,529 $65,506 $31,017 $13,891
Ratio of expenses to average net assets 0.58%(b) 0.59% 0.55% 0.53%(a) 0.63%(c) 0.95%(a)(d)
Ratio of net investment income to average net
assets 4.94%(b) 5.01% 4.84% 5.40%(a) 4.14%(c) 2.29%(a)(d)
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</TABLE>
(a) Annualized.
(b) Ratios are based on average net assets of $63,101,740.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 0.70% and 4.07%, respectively.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.53% (annualized) and 1.70% (annualized),
respectively.
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AIM V.I. MONEY MARKET FUND
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OBTAINING ADDITIONAL INFORMATION
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More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you wish to obtain free copies of the fund's current SAI, please send a
written request to A I M Distributors, Inc., 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173 or call (800) 410-4246.
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, DC, on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, DC 20549-6009. Please call the SEC
at 1-800-SEC-0330 for information about the Public Reference Room.
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AIM V.I. Money Market Fund
SEC 1940 Act file number: 811-7452
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[AIM LOGO APPEARS HERE] www.aimfunds.com INVEST WITH DISCIPLINE
--Registered Trademark--
