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AIM V.I. CAPITAL
APPRECIATION FUND
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Shares of the fund are currently offered only to insurance company
separate accounts. AIM V.I. Capital Appreciation Fund seeks to provide
growth of capital.
AIM --Registered Trademark--
PROSPECTUS
MAY 1, 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.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark--
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AIM V.I. CAPITAL APPRECIATION FUND
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TABLE OF CONTENTS
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<TABLE>
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES 1
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PRINCIPAL RISKS OF INVESTING IN THE FUND 1
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PERFORMANCE INFORMATION 2
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Annual Total Returns 2
Performance Table 2
FUND MANAGEMENT 3
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The Advisor 3
Advisor Compensation 3
Portfolio Managers 3
OTHER INFORMATION 4
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Purchase and Redemption of Shares 4
Pricing of Shares 4
Taxes 4
Dividends and Distributions 4
FINANCIAL HIGHLIGHTS 5
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OBTAINING ADDITIONAL INFORMATION Back Cover
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</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, Invierta con
Disciplina and Invest with Discipline are registered service marks and AIM Bank
Connection, AIM Funds, AIM Funds and Design, AIM Internet Connect and AIM
Investor 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.
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AIM V.I. CAPITAL APPRECIATION FUND
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INVESTMENT OBJECTIVE AND STRATEGIES
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The fund's investment objective is growth of capital. The investment objective
of the fund may be changed by the Board of Trustees without shareholder
approval.
The fund seeks to meet its objective by investing principally in common stocks
of companies the portfolio managers believe are likely to benefit from new or
innovative products, services or processes as well as those that have
experienced above-average, long-term growth in earnings and have excellent
prospects for future growth. The portfolio managers consider whether to sell a
particular security when any of those factors materially changes. The fund may
also invest up to 25% of its total assets in foreign securities. Any percentage
limitations with respect to assets of the fund are applied at the time of
purchase.
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 objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
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There is a risk that you could lose all or a portion of your investment in the
fund. 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. This is
especially true with respect to common stocks of smaller companies, whose prices
may go up and down more than common stocks of larger, more-established
companies. Also, since common stocks of smaller companies may not be traded as
often as common stocks of larger, more-established companies, it may be
difficult or impossible for the fund to sell securities at a desirable price.
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.
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AIM V.I. CAPITAL APPRECIATION FUND
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PERFORMANCE INFORMATION
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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
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 RETURNS
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<S> <C>
1994.................................... 2.50%
1995.................................... 35.69%
1996.................................... 17.58%
1997.................................... 13.51%
1998.................................... 19.30%
1999.................................... 44.61%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
35.78% (quarter ended December 31, 1999) and the lowest quarterly return was
- -14.75% (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.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
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(for the periods ended SINCE INCEPTION
December 31, 1999) 1 YEAR 5 YEARS INCEPTION DATE
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<S> <C> <C> <C> <C>
AIM V.I. Capital Appreciation Fund 44.61% 25.59% 22.33% 05/05/93
Standard & Poor's 500 Index(1) 21.03% 28.54% 22.37%(2) 04/30/93(2)
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</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the
inception date of the 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 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 0.62% 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 as follows:
- - David P. Barnard, Senior Portfolio Manager, who has been responsible for the
fund since 1993 and has been associated with the advisor and/or its affiliates
since 1982.
- - Brant H. DeMuth, Senior Portfolio Manager, who has been responsible for the
fund since 2000 and has been associated with the advisor and/or its affiliates
since 1996. From 1992 to 1996, he was Portfolio Manager for Colorado Public
Employee's Retirement Association.
- - Robert M. Kippes, Senior Portfolio Manager, who has been responsible for the
fund since 1993 and has been associated with the advisor and/or its affiliates
since 1989.
- - Christopher P. Perras, Portfolio Manager, who has been responsible for the
fund since 1999 and has been associated with the advisor and/or its affiliates
since 1999. From 1997 to 1999 Mr. Perras was an equity analyst at Van Wagoner
Capital Management. From 1995 to 1997 he was an Associate Portfolio Manager at
Van Kampen American Capital Asset Management, Inc.
- - Charles D. Scavone, Senior Portfolio Manager, who has been responsible for the
fund since 1998 and has been associated with the advisor and/or its affiliates
since 1996. From 1994 to 1996 Mr. Scavone was an Associate Portfolio Manager
for Van Kampen American Capital Management, Inc.
- - Kenneth A. Zschappel, Senior Portfolio Manager, who has been responsible for
the fund since 1999 and has been associated with the advisor and/or its
affiliates since 1990.
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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.
The fund currently offers shares only to insurance company separate accounts.
In the future, the fund may offer them to pension and retirement plans that
qualify for special federal income tax treatment.
The Board of Trustees monitors for possible conflicts among separate accounts
(and will do so for plans) buying shares of the fund. A fund's net asset value
could decrease if it had to sell investment securities to pay redemption
proceeds to a separate account (or plan) withdrawing because of a conflict.
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 Trustees. 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
Trustees 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.
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AIM V.I. CAPITAL APPRECIATION 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,
1999 1998 1997 1996 1995 1995
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<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.20 $ 21.75 $ 19.43 $ 16.55 $ 12.05 $ 12.58
Income from investment operations:
Net investment income (loss) (0.02) 0.02 0.03 0.02 0.04 0.05
Net gains (losses) on securities (both
realized and unrealized) 11.17 4.12 2.58 2.89 4.46 (0.54)
Total from investment operations 11.15 4.14 2.61 2.91 4.50 (0.49)
Less distributions:
Dividends from net investment income (0.02) (0.04) (0.02) (0.03) -- (0.04)
Distributions from net realized gains (0.75) (0.65) (0.27) -- -- --
Total distributions (0.77) (0.69) (0.29) (0.03) -- (0.04)
Net asset value, end of period $ 35.58 $ 25.20 $ 21.75 $ 19.43 $ 16.55 $ 12.05
Total return(a) 44.61% 19.30% 13.51% 17.58% 37.38% (3.91)%
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Ratios/supplemental data:
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Net assets, end of period (000s omitted) $1,131,217 $647,248 $522,642 $370,063 $212,152 $88,177
Ratio of expenses to average net assets 0.73%(b) 0.67% 0.68% 0.73% 0.75%(c) 0.84%
Ratio of net investment income to average net
assets (0.06)%(b) 0.11% 0.18% 0.18% 0.39%(c) 0.46%
Portfolio turnover rate 65% 83% 65% 59% 37% 81%
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</TABLE>
(a) Total returns are not annualized for periods less than one year.
(b) Ratios are based on average net assets of $784,307,675.
(c) Annualized.
5
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AIM V.I. CAPITAL APPRECIATION 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 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.
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AIM V.I. Capital Appreciation Fund
SEC 1940 Act file number: 811-7452
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[AIM LOGO APPEARS HERE] www.aimfunds.com INVEST WITH DISCIPLINE
--Registered Trademark--
