<PAGE> 1
AIM V.I. GLOBAL
UTILITIES FUND
------------------------------------------------------------------------
Shares of the fund are currently offered only to insurance company
separate accounts. AIM V.I. Global Utilities Fund seeks to achieve a
high level of current income and secondarily, growth of capital, by
investing primarily in the common and preferred stocks of public utility
companies (either domestic or foreign).
PROSPECTUS AIM --Registered Trademark--
FEBRUARY 16, 2000
This prospectus contains important
information. Please read it before
investing and keep it for future
reference.
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.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
The Board of Directors voted to
request shareholder approval of
certain items. For further
information on these items, see
Submission of Matters to
Shareholders in this prospectus.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
-- Registered Trademark --
<PAGE> 2
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES 1
- - - - - - - - - - - - - - - - - - - - - - - - -
PRINCIPAL RISKS OF INVESTING IN THE FUND 1
- - - - - - - - - - - - - - - - - - - - - - - - -
PERFORMANCE INFORMATION 2
- - - - - - - - - - - - - - - - - - - - - - - - -
Annual Total Returns 2
Performance Table 2
FUND MANAGEMENT 3
- - - - - - - - - - - - - - - - - - - - - - - - -
The Advisor 3
Advisor Compensation 3
Portfolio Managers 3
OTHER INFORMATION 4
- - - - - - - - - - - - - - - - - - - - - - - - -
Purchase and Redemption of Shares 4
Pricing of Shares 4
Taxes 4
Dividends and Distributions 4
Submission of Matters to Shareholders 4
FINANCIAL HIGHLIGHTS 5
- - - - - - - - - - - - - - - - - - - - - - - - -
OBTAINING ADDITIONAL INFORMATION Back Cover
- - - - - - - - - - - - - - - - - - - - - - - - -
</TABLE>
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, AIM Funds, AIM
Funds and Design, AIM Internet Connect and AIM Investors are service marks 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.
<PAGE> 3
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
INVESTMENT OBJECTIVE AND STRATEGIES
- --------------------------------------------------------------------------------
The fund's investment objectives are to achieve a high level of current income
and secondarily, growth of capital, by investing primarily in the common and
preferred stocks of public utility companies (either domestic or foreign).
The fund seeks to meet these objectives by investing, normally, at least 65%
of its total assets in securities of domestic and foreign public utility
companies. Public utility companies include companies that provide electricity,
natural gas, water and sanitary services to the public, telephone or telegraph
companies, and other companies providing public communications services. The
fund may also invest in developing utility technology companies and in holding
companies that derive a substantial portion of their revenues from utility
related activities.
The fund may invest up to 80% of its total assets in foreign securities,
including securities of issuers located in developing countries. Developing
countries are those countries that are in the initial stages of their industrial
cycles. The fund will normally invest in the securities of companies located in
at least four different countries, including the United States. The fund may
invest up to 25% of its total assets in convertible securities of public utility
companies. The fund may also invest up to 25% of its total assets in public
utility company, non-convertible bonds. The fund may invest up to 10% of its
total assets in lower-quality debt securities, i.e., "junk bonds."
The portfolio managers focus on securities that have favorable prospects for
high current income and growth of capital. The portfolio managers consider
whether to sell a particular security when any of those factors materially
changes.
The fund is a non-diversified portfolio. With respect to 50% of its total
assets, it is permitted to invest more than 5% of its assets in the securities
of any one issuer.
In anticipation of or in response to adverse market conditions, the fund may
invest up to 100% of its total assets in securities of U.S. issuers.
In anticipation of or in response to adverse market conditions, for cash
management purposes, or for defensive purposes, the fund may temporarily hold
all or a portion of its assets in cash, money market instruments, shares of
affiliated money market funds, bonds or other debt securities. As a result, the
fund may not achieve its investment objectives.
PRINCIPAL RISKS OF INVESTING IN THE FUND
- --------------------------------------------------------------------------------
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The prices of equity securities change in
response to many factors, including the historical and prospective earnings of
the issuer, the value of its assets, general economic conditions, interest
rates, investor perceptions and market liquidity. Interest rate increases may
cause the price of a debt security to decrease; the longer a debt security's
duration, the more sensitive it is to this risk. The issuer of a security may
default or otherwise be unable to honor a financial obligation.
The value of the fund's shares is particularly vulnerable to factors affecting
the utility company industry, such as substantial economic, operational or
regulatory changes. Such changes may, among other things, increase compliance
costs or the costs of doing business. In addition, increases in fuel, energy and
other prices have historically limited the growth potential of utility
companies. Because the fund focuses its investments in the public utility
industry, the value of your shares may rise and fall more than the value of
shares of a fund that invests more broadly.
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 valued.
- - Political and economic conditions--The value of the fund's foreign investments
may be adversely affected by political and social instability in 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.
Because it is non-diversified, the fund may invest in fewer issuers than if it
were a diversified fund. The value of the fund's shares may vary more widely,
and the fund may be subject to greater investment and credit risk, than if the
fund invested more broadly.
The fund may participate in the initial public offering (IPO) market. Because
of the fund's small asset base, any investment the fund may make in IPOs may
significantly increase the fund's total returns. As the fund's assets grow, the
impact of IPO investments will decline, which may reduce the fund's total
returns.
1
<PAGE> 4
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
The bar chart and table shown below provide 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
does not reflect charges at the separate account level. If they did, the
performance shown would be lower. Total return information in the bar chart and
table below may be affected by special market factors, including the fund's
investments in the initial public offering markets, which may have a magnified
impact on the fund due to its small asset base. There is no guarantee that, as
the fund's assets grow, it will continue to experience substantially similar
performance.
ANNUAL TOTAL RETURNS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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, RETURNS
- ------------ -------
<S> <C>
1995 .................................................... 26.74%
1996 .................................................... 12.07%
1997 .................................................... 21.63%
1998 .................................................... 16.49%
1999 .................................................... 33.56%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
25.88% (quarter ended December 31, 1999) and the lowest quarterly return was
- -4.98% (quarter ended September 30, 1998).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(for the periods ending SINCE INCEPTION
December 31, 1999) 1 YEAR 5 YEARS INCEPTION DATE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM V.I. Global Utilities
Fund 33.56% 21.87% 18.45% 05/02/94
Lipper Utility Fund
Index(1) 14.53% 18.83% 15.58%(2) 04/30/94(2)
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Lipper Utility Fund Index measures the performance of the 30 largest
utilities funds charted by Lipper Inc., an independent mutual funds
performance monitor.
(2) The average annual total return given is since the date closest to the
inception date of the fund.
2
<PAGE> 5
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
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 120
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fund's last fiscal year ended December 31, 1999, the advisor received
compensation of 0.65% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
- - Robert G. Alley, Senior Portfolio Manager, who has been responsible for the
fund since 1994 and has been associated with the advisor and/or its affiliates
since 1992.
- - Claude C. Cody, IV, Senior Portfolio Manager, who has been responsible for the
fund since 1994 and has been associated with the advisor and/or its affiliates
since 1992.
- - Carolyn L. Gibbs, Senior Portfolio Manager, who has been responsible for the
fund since 1998 and has been associated with the advisor and/or its affiliates
since 1992.
- - Craig A. Smith, Senior Portfolio Manager, who has been responsible with the
fund since 1996 and has been associated with the advisor and/or its affiliates
since 1989.
- - Meggan M. Walsh, Portfolio Manager, who has been responsible for the fund
since 1998 and has been associated with the advisor and/or its affiliates
since 1991.
3
<PAGE> 6
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
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
portfolio securities for which market quotations are readily available at market
value. The fund values short-term investments maturing within 60 days at
amortized cost, which approximates market value. The fund values all other
securities and assets at their fair value. 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. Because the
fund may invest in securities that are primarily listed on foreign exchanges,
the value of the fund's shares may change on days when the separate account will
not be able to purchase or redeem shares. 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 advisors before investing.
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS
The fund generally declares and pays dividends, if any, annually to separate
accounts of participating life insurance companies. The fund expects that its
distributions will consist primarily of capital gains.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually 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.
SUBMISSION OF MATTERS TO SHAREHOLDERS
At a meeting held on February 3, 2000, the Board of Directors of AIM Variable
Insurance Funds, Inc. (the company), on behalf of the fund, voted to request
shareholders to approve the following items that will affect the fund:
- - Elect ten directors, each of whom will serve until his or her successor is
elected and qualified;
- - An Agreement and Plan of Reorganization which provides for the reorganization
of the company, which is currently a Maryland corporation, as a Delaware
business trust;
- - A new advisory agreement between the company and A I M Advisors, Inc. (AIM).
The principal changes to the advisory agreement are (i) the deletion of
references to the provision of administrative services, and (ii) the
clarification of provisions relating to delegations of responsibilities and
the non-exclusive nature of AIM's services. The revised advisory agreement
does not change the fees paid by the fund (except that the agreement permits
the fund to pay a fee to AIM in connection with any new securities lending
program implemented in the future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are described in
the fund's statement of additional information;
- - Changing the fund's investment objectives and making them non-fundamental. The
investment objectives of the fund would be changed by deleting references to
the types of securities that the fund will purchase. Pursuant to this
proposal, the fund's investment objective would read: "The fund's investment
objective is to achieve a high total return." If the investment objective of
the fund becomes non-fundamental, it can be changed in the future by the Board
of Directors of the company without further approval by shareholders; and
- - Ratify the selection of Tait, Weller & Baker as independent accountants.
The Board of Directors of the company has called a meeting of the fund's
shareholders to be held on or about April 10, 2000 to vote on these and other
proposals. Only shareholders of record as of January 20, 2000 are entitled to
vote at the meeting. Proposals that are approved are expected to become
effective on or about April 17, 2000.
4
<PAGE> 7
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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.
Total return information in this table may be affected by special market
factors, including the fund's investments in the initial public offering
markets, which may have a magnified impact on the fund due to its small asset
base. There is no guarantee that, as the fund's assets grow, it will continue to
experience substantially similar performance.
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, JANUARY 31,
1999(a) 1998 1997 1996 1995 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.36 $ 15.26 $ 12.55 $ 11.64 $ 9.69 $10.00
Income from investment operations:
Net investment income 0.32 0.35 0.32 0.40 0.29 0.27
Net gains (losses) on securities (both
realized and unrealized) 5.49 2.15 2.40 0.99 1.98 (0.33)
Total from investment operations 5.81 2.50 2.72 1.39 2.27 (0.06)
Less distributions:
Dividends from net investment income (0.37) (0.28) -- (0.41) (0.31) (0.25)
Distributions from net realized gains -- (0.12) (0.01) (0.07) (0.01) --
Total distributions (0.37) (0.40) (0.01) (0.48) (0.32) (0.25)
Net asset value, end of period $ 22.80 $ 17.36 $ 15.26 $ 12.55 $11.64 $ 9.69
Total return(b) 33.56% 16.49% 21.63% 12.07% 23.73% (0.56)%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $39,772 $28,134 $22,079 $13,576 $8,394 $2,958
Ratio of expenses to average net assets 1.14%(c) 1.11% 1.28% 1.40%(d) 1.47%(d)(e) 1.31%(e)(f)
Ratio of investment income to average net assets 1.72%(c) 2.46% 2.81% 3.56%(d) 3.76%(d)(e) 4.39%(e)(f)
Portfolio turnover rate 45% 32% 28% 47% 58% 69%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding.
(b) Total returns are not annualized for periods less than one year.
(c) Ratios are based on average net assets of $31,098,057.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average net assets prior to fee waivers and/or expense
reimbursements were 1.55% and 3.42% for 1996 and 2.44% (annualized) and
2.79% (annualized) for 1995.
(e) Annualized.
(f) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average net assets prior to fee waivers and/or expense
reimbursements were 2.80% (annualized) and 2.90% (annualized), respectively.
5
<PAGE> 8
------------------------------
AIM V.I. GLOBAL UTILITIES FUND
------------------------------
OBTAINING ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
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 review and obtain copies of the fund's SAI, reports and other
information at the SEC's Public Reference Room in Washington, D.C., on the EDGAR
database on the SEC's Internet website (http://www.sec.gov); or, after paying a
duplication fee, by sending a letter to the SEC's Public Reference Section,
Washington, D.C. 20549-0102 or by sending an electronic mail request to
[email protected]. Please call the SEC at 1-202-942-8090 for information about
the Public Reference Room.
----------------------------------
AIM V.I. Global Utilities Fund
SEC 1940 Act file number: 811-7452
----------------------------------
[AIM LOGO APPEARS HERE] www.aimfunds.com INVEST WITH DISCIPLINE
-- Registered Trademark --
