<PAGE> 1
[AIM LOGO APPEARS HERE]
AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT
SEMIANNUAL REPORT
SEPTEMBER 30, 1996
<PAGE> 2
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
For shareholders who seek to earn a high level of current income that is free
of both federal and Connecticut taxes.
ABOUT FUND PERFORMANCE DATA THROUGHOUT THIS REPORT:
o The Fund's performance is historical and reflects reinvestment of all
distributions. Unless otherwise indicated, Fund results were computed
without a sales charge. When sales charges are included, the Fund's
performance reflects the 4.75% maximum sales charge.
o The Fund's average annual total return for periods ended 9/30/96 was -0.33%
for one year, 5.68% for five years, and 6.59% since the Fund's inception on
10/31/89, when calculated on maximum offering price.
o As of September 30, 1996, the Fund's 30-day distribution rate was 4.87%,
when calculated on maximum offering price. The distribution rate is equal
to the actual distributions from investment income declared for the prior
30-day period, expressed as an annual percentage. Distribution rates may
include daily dividends and short-term capital gains. Unless otherwise
indicated, distribution rates shown are based on maximum offering price.
o As of September 30, 1996, the Fund's 30-day yield was 4.53%, when
calculated on maximum offering price. The 30-day yield is calculated on the
basis of a formula defined by the SEC. 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
expressed on an annualized basis.
o The taxable-equivalent yield is calculated in the same manner as the 30-day
yield with an adjustment for a stated, assumed tax rate.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any security.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc., is an independent mutual fund performance
monitor. The unmanaged Lipper Connecticut Tax-Exempt Municipal Fund
Category represents an average of the performance of all Connecticut
municipal bond funds tracked by Lipper.
o An investment cannot be made in the indexes listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE FDIC
OR ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
GUARANTEED BY, ANY BANK OR ANY AFFILIATE; AND ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
A Message from
the Chairman
Dear Fellow Shareholder:
During periods of market volatility, I am reminded of a
story. When asked what the market was going to do, J.P.
Morgan reportedly replied, "It will fluctuate." Fixed-income
investors can certainly agree with that statement: Bond
markets have undergone major shifts in momentum at least
[PHOTO OF twice in 1996 as investors worried first about the
Charles T. possibility of recession and then about rising inflation.
Bauer, Those of you who are long-time investors, and those who
Chairman of are brand-new shareholders in The AIM Family of
the Board of Funds--Registered Trademark--, should recognize that
the Fund, periods of falling prices in both the stock and bond
APPEARS HERE] markets are inevitable. Indeed, we can learn important
lessons about investing in periods of market uncertainty.
In our experience, we have observed that the best action
to take is to stay focused--not on the market, but on your
own long-term goals. The market can change from day to day.
Those who try to "time" the market, over time, tend to be less successful than
those who continue to follow a disciplined investment strategy.
Short-term volatility in financial markets may tempt some investors to
liquidate investments regardless of their personal financial objectives.
Remember that time is the best medicine for uncertain markets. The market's
performance in recent months has been driven by concerns about the possibility
of an overheated economy and rising inflation. However, the latest economic
data suggest conditions that prompted 1996's strong market performance should
continue: corporate earnings are healthy and economic growth is moderate,
without significant inflation.
You may cushion the effects of changing markets and reduce your risk
exposure in any one type of security by diversification--spreading your assets
across several kinds of investments. Prudent investors maintain a balanced
portfolio of stock and bond investments, with due consideration for their
personal financial objectives, risk tolerance, and investment time horizon.
There is one constant you can count on, regardless of changing
markets--AIM's commitment to you, our shareholders. At AIM, we take our
responsibility to you very seriously in managing a well-conceived and
significantly diversified menu of mutual funds. AIM investment management teams
provide a blend of skills, education, experience, and maturity that produces a
balanced, thoughtful approach to decision-making and quality investment
products. Consistent performance, coupled with outstanding customer service and
a highly professional staff, has helped AIM build relationships with 3.5
million shareholders.
As always, we are ready to respond to your questions and comments. Please
call one of our representatives at 800-959-4246 if we may be of service. For
automated account information 24 hours a day, call the AIM Investor Line
toll-free at 800-246-5463.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
-----------------------------
Remember that time is
the best medicine
for uncertain markets.
-----------------------------
<PAGE> 4
========================================
AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT
CURRENT YIELD ADVANTAGE
YIELDS AS OF 9/30/96
10-Year U.S. Treasury Note* 6.70%
30-Year U.S. Treasury Note* 6.92%
Fund 30-day yield,
taxable-equivalent** 7.85%
Fund 30-day distribution rate,
taxable-equivalent** 8.86%
*Government securities, such as U.S.
Treasury bills, notes, and bonds, offer a
high degree of safety and are guaranteed
as to the timeley payment of principal
and interest if held to maturity. Fund
shares are not insured, and their value
and yield will vary with market
conditions. **Taxable-equivalent yields
were adjusted for Connecticut and the
highest marginal tax rate for federal
income taxes of 4.50% and 39.6%,
respectively.
========================================
THE MANAGERS' OVERVIEW
VOLATILE MARKETS
CHALLENGE INVESTORS
A roundtable discussion with the Fund management team for AIM Tax-Exempt Bond
Fund of Connecticut for the six-month reporting period ended September 30, 1996.
- --------------------------------------------------------------------------------
Q: HOW DID AIM TAX-EXEMPT BOND FUND OF CONNECTICUT PERFORM DURING THE REPORTING
PERIOD?
A: The Fund continued to deliver attractive tax-exempt current income. As of
September 30, 1996, the Fund's 30-day distribution rate was 5.11%, when
calculated on net asset value. For Connecticut residents, the taxable-
equivalent on the distribution rate on net asset value was 8.86%, when
adjusted for the combined highest marginal federal and Connecticut state tax
rates. Net assets in the Fund stood at $38 million as of September 30, 1996,
and net asset value per share was $10.80.
It was a difficult period for fixed-income investors, and that accounted
for the Fund's total return of 2.50% for the period, which tracked the 2.81%
total return for the Lipper Connecticut Tax-Exempt Municipal Fund Category.
Q. WHAT WERE BOND-MARKET CONDITIONS LIKE DURING THE PAST SIX MONTHS?
A: Uncertainty dominated the bond markets as investors became concerned that
rapid economic growth would accelerate inflation. The rate of growth of the
gross domestic product (GDP) rose to 2.0% in the first quarter of 1996 and
4.7% in the second quarter, its highest level since late 1994. The primary
concern was that the Federal Reserve Board would nudge interest rates
higher to slow economic growth and forestall inflation. That drove most
bond yields higher--and prices lower--during most of the reporting period.
However, economic reports suggested that inflation was not threatening.
When the Fed met in July, August, and September, it left interest rates
unchanged each time.
Q: HOW DID MUNICIPAL SECURITIES PERFORM DURING THE REPORTING PERIOD?
A: Municipal securities fared a little better than U.S. Treasury securities.
The yield spread between long municipal securities and long U.S. Treasuries
fell to roughly 75% from the normal range of 80% to 85%. The principal
factor cushioning the municipal market continues to be the decline in new
issue supply. We observed a significant level of refundings, particularly
in June and July, and that has removed a lot of bonds from the marketplace.
The resulting relative scarcity in supply helped cushion prices on municipal
securities, and they tended to decline less than U.S. Treasury
securities in the volatile interest rate environment.
Q: GIVEN MARKET CONDITIONS, WHAT WAS YOUR STRATEGY FOR THE FUND DURING
THE PERIOD?
A: The Fund maintained attractive yield levels thanks to its relatively large
weighting in higher-coupon premium bonds with excellent call protection.
That was important, given that municipal issuers have taken advantage of
lower interest rates to refinance debt, which reduces the market yields
available to investors. We also looked for undervalued bonds with higher
yields to enhance the Fund's income level while preserving safety of
principal.
Of the 62 holdings in the Fund as of September 30, 1996, 82% was invested
in revenue bonds and 18% in general obligation bonds. At the end of the
reporting period, the Fund had a weighted average maturity of 11.9 years
and a duration of 4.4 years. Funds with shorter maturities and duration tend
to be less sensitive to market fluctuations.
2
<PAGE> 5
The Fund maintained its strategy of investing in quality issues. As of
September 30, 1996, approximately 33% of the portfolio's holdings were
securities rated AAA, and 85% of the portfolio was rated A or better.
Credit-enhanced securities, which are backed by insurance or escrowed with
U.S. Treasuries, comprised about 30% of the portfolio. The Fund also was
managed for tax-efficiency.
The Fund has an average portfolio quality rating of AA as measured by
Standard & Poor's Corporation (S&P) and Moody's Investor Service (Moody's),
two widely known credit rating agencies. S&P and Moody ratings are historical
and are based on analysis of the credit quality of the individual municipal
securities in the Fund's portfolio.
Q: WHAT IS "TAX EFFICIENCY"?
A: "Efficiency" for a tax-exempt fund refers to its ability to create
distributions that are free from federal income taxes and capital gains
taxes. To manage the Fund for tax efficiency, we avoid transactions that will
result in capital gains which are not offset by losses. Since its inception
on October 3, 1989, AIM Tax-Exempt Bond Fund of Connecticut distributions
have been 99% efficient.
Q: WHAT ARE YOUR EXPECTATIONS FOR THE COMING MONTHS?
A: Mounting evidence that the U.S. economy is growing reasonably and that
inflation pressures remain modest has calmed investor concerns, at least for
the near term. Recent reports show that GDP slowed to 2.2% in the third
quarter from 4.7% in the second quarter. The continued pace of economic
growth is the key. Many analysts and the Fed as well anticipate that the
economy will continue to slow in the months ahead.
Q: HOW LIKELY IS TAX REFORM?
A: We don't believe tax reform will be a factor in the future for several
reasons. First, there are no tax-reform bills under consideration by
Congress. If a bill is presented, we anticipate that lobbying groups will
muster an all-out assault on it. Second, the reform most mentioned--a flat
tax--actually may result in many lower- and middle-income workers paying
higher taxes--hardly a favorable outcome. Third, we think it unlikely that
the federal government will raise taxes at the same time it is shifting more
of the spending burden to the states.
PORTFOLIO COMPOSITION (as of 9/30/96)
Top 5 Bond Holdings ===============================
NUMBER OF HOLDINGS 62
1. Connecticut St. Dev. Auth. Poll 7.25%
(10/15/15) GENERAL OBLIGATION 18%
2. Guam Airport Auth. Rev. 5.00% REVENUE 82%
(10/01/96)
CREDIT ENHANCED 30%
3. Connecticut St. Special Tax Obligation
6.50% (10/01/12) AMT 11%
4. Connecticut St. Health & Education AVERAGE MATURITY 11.9 YEARS
6.875% (07/01/09)
DURATION 4.4 YEARS
5. Connecticut State Special Tax Obligation ===============================
6.80% (06/01/03)
Fund holdings are subject to change and there is no assurance the Fund will
continue to hold any security.
-------------------------------
Since its inception
on October 3, 1989,
AIM Tax-Exempt Bond
Fund of Connecticut
distributions have been
99% tax-efficient.
-------------------------------
3
<PAGE> 6
Financials
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
RATING(a) MARKET
S&P MOODY'S PAR VALUE
<S> <C> <C> <C> <C>
MUNICIPAL OBLIGATIONS-98.27%
EDUCATION-11.59%
Connecticut Health and Education Facilities Authority
(Fairfield University); Series F RB
6.875%, 07/01/09 BBB+ Baa1 $1,475,000 $ 1,552,806
- ------------------------------------------------------------------------------------------------
Connecticut Health and Education Facilities Authority
(Quinnipiac College); RB
4.90%, Series D, 07/01/98 BBB- - 150,000 148,976
- ------------------------------------------------------------------------------------------------
7.25%, Series 1989 B, 07/01/99(b)(c) AAA NRR 450,000 491,368
- ------------------------------------------------------------------------------------------------
Connecticut Regional School District No. 5;
Series 1992 GO
6.00%, 03/01/12(d) AAA Aaa 335,000 348,155
- ------------------------------------------------------------------------------------------------
Connecticut Regional School District No. 5
(Towns of Bethany, Orange and Woodbridge); 1993
Issue GO
5.50%, 02/15/07(d) AAA Aaa 500,000 512,675
- ------------------------------------------------------------------------------------------------
Connecticut State Higher Education Supplemental
Loan Authority (Family Education Loan
Program); Series 1990 A RB
7.50%, 11/15/10(e) - A1 1,285,000 1,348,466
- ------------------------------------------------------------------------------------------------
4,402,446
- ------------------------------------------------------------------------------------------------
ELECTRIC-4.52%
Connecticut Development Authority (New England Power
Co.); Series 1985 Fixed Rate PCR
7.25%, 10/15/15 A+ A1 1,600,000 1,716,416
- ------------------------------------------------------------------------------------------------
GENERAL OBLIGATION-11.12%
Bridgeport (Town of), Connecticut; Series A Unlimited
GO
6.00%, 09/01/06(d) AAA Aaa 500,000 533,040
- ------------------------------------------------------------------------------------------------
Brooklyn (City of), Connecticut; Unlimited Tax GO
5.50%, 05/01/06(d) AAA Aaa 250,000 256,348
- ------------------------------------------------------------------------------------------------
5.70%, 05/01/08(d) AAA Aaa 250,000 257,800
- ------------------------------------------------------------------------------------------------
Chester (Town of), Connecticut; Series 1989 GO
7.00%, 10/01/05 - A 190,000 202,846
- ------------------------------------------------------------------------------------------------
Connecticut (State of); Series 1991 A GO
6.75%, 03/01/01(b)(c) NRR NRR 480,000 527,592
- ------------------------------------------------------------------------------------------------
Connecticut (State of) (General Purpose Public
Improvement); GO
6.75%, Series 1991 A, 03/01/01(b)(c) NRR NRR 200,000 219,830
- ------------------------------------------------------------------------------------------------
6.50%, Series 1992 A, 03/15/02(b)(c) NRR NRR 300,000 329,583
- ------------------------------------------------------------------------------------------------
Mansfield (City of), Connecticut; Series 1990 GO
6.00%, 06/15/07 - A1 100,000 105,484
- ------------------------------------------------------------------------------------------------
6.00%, 06/15/08 - A1 100,000 104,526
- ------------------------------------------------------------------------------------------------
6.00%, 06/15/09 - A1 100,000 105,265
- ------------------------------------------------------------------------------------------------
New Britain (City of), Connecticut; Series 1992
Various Purpose GO
6.00%, 02/01/11(d) AAA Aaa 400,000 419,208
- ------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
Financials
<TABLE>
<CAPTION>
RATING(a) MARKET
S&P MOODY'S PAR VALUE
<S> <C> <C> <C> <C>
GENERAL OBLIGATION-Continued
North Canaan (City of), Connecticut;
Series 1991 GO
6.50%, 01/15/08 - A $ 125,000 $ 136,714
- ------------------------------------------------------------------------------------------------
6.50%, 01/15/09 - A 125,000 136,276
- ------------------------------------------------------------------------------------------------
6.50%, 01/15/10 - A 125,000 136,288
- ------------------------------------------------------------------------------------------------
6.50%, 01/15/11 - A 125,000 136,205
- ------------------------------------------------------------------------------------------------
Somers (City of), Connecticut; Series 1990 Various
Purpose GO
6.00%, 12/01/10 - A1 190,000 200,011
- ------------------------------------------------------------------------------------------------
Westbrook (City of), Connecticut; Series 1992 GO
6.40%, 03/15/10(d) AAA Aaa 380,000 417,517
- ------------------------------------------------------------------------------------------------
4,224,533
- ------------------------------------------------------------------------------------------------
HEALTH CARE-10.70%
Connecticut Health and Education Facilities Authority
(Bridgeport Hospital); 1992 Series A RB
6.625%, 07/01/18(d) AAA Aaa 500,000 533,630
- ------------------------------------------------------------------------------------------------
Connecticut Health and Education Facilities Authority
(Capital Asset); Series 1989 B RB
7.00%, 01/01/00(f) A A1 200,000 211,698
- ------------------------------------------------------------------------------------------------
Connecticut Health and Education Facilities Authority
(Danbury Hospital); 1991 Series E RB
6.50%, 07/01/14(d) AAA Aaa 750,000 790,410
- ------------------------------------------------------------------------------------------------
Connecticut Health and Education Facilities Authority
(Middlesex Hospital); 1992 Series G RB
6.25%, 07/01/12(d) AAA Aaa 1,100,000 1,140,810
- ------------------------------------------------------------------------------------------------
Connecticut Health and Education Facilities Authority
(New Britain Memorial Hospital); Series 1991 A RB
7.75%, 07/01/22 BBB- - 500,000 535,915
- ------------------------------------------------------------------------------------------------
Connecticut Health and Education Facilities Authority
(Yale-New Haven Hospital); Series 1990 F RB
7.10%, 07/01/00(b)(c) AAA Aaa 775,000 856,770
- ------------------------------------------------------------------------------------------------
4,069,233
- ------------------------------------------------------------------------------------------------
HOUSING-14.06%
Connecticut Housing Development Authority
(Housing Mortgage Finance Program); RB
7.55%, Series 1990 B-1, 11/15/08 AA Aa 1,105,000 1,133,034
- ------------------------------------------------------------------------------------------------
7.00%, Series 1991 A-1, 11/15/09 AA Aa 450,000 472,262
- ------------------------------------------------------------------------------------------------
6.55%, Series 1991 C, Sub-Series C-3, 11/15/13 AA Aa 310,000 323,023
- ------------------------------------------------------------------------------------------------
7.125%, Series 1985 F, 11/15/18 AA Aa 190,000 194,005
- ------------------------------------------------------------------------------------------------
Connecticut (State of) (Housing Mortgage Finance
Program); RB
6.00%, Series 1993 E-1, 05/15/17 AA Aa 675,000 675,884
- ------------------------------------------------------------------------------------------------
6.30%, Series C-1, 11/15/17 AA Aa 1,270,000 1,288,694
- ------------------------------------------------------------------------------------------------
6.25%, Series C-2, 11/15/18 AA Aa 750,000 756,098
- ------------------------------------------------------------------------------------------------
6.70%, Series C2, 11/15/22(e) AA Aa 490,000 501,010
- ------------------------------------------------------------------------------------------------
5,344,010
- ------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 8
Financials
<TABLE>
<CAPTION>
RATING(a) MARKET
S&P MOODY'S PAR VALUE
<S> <C> <C> <C> <C>
LEASE RENTAL-1.11%
Connecticut (State of) (Middletown Courthouse
Facilities Project); 1991 Issue Lease-Rental Revenue
Certificates of Participation
6.25%, 12/15/10(d) AAA Aaa $ 400,000 $ 421,972
- ------------------------------------------------------------------------------------------------
RESOURCE RECOVERY-5.95%
Connecticut State Resource Recovery Authority
(American Ref-Fuel Co.-Southeastern Connecticut
Project);
Series 1988 A RB
8.00%, 11/15/15(e) AA- Baa1 500,000 541,655
- ------------------------------------------------------------------------------------------------
Connecticut State Resource Recovery Authority
(Bridgeport Resco Corp.-Ltd. Partners);
1985 Issue RB
8.625%, Project B, 01/01/04 A A 670,000 685,109
- ------------------------------------------------------------------------------------------------
7.625%, Project A, 01/01/09 A A 1,000,000 1,034,390
- ------------------------------------------------------------------------------------------------
2,261,154
- ------------------------------------------------------------------------------------------------
TRANSPORTATION-19.14%
Connecticut State Special Tax Obligation
(Transportation Infrastructure); RB
5.10%, Series 1992 B, 09/01/99 AA- A1 1,000,000 1,013,700
- ------------------------------------------------------------------------------------------------
6.80%, Series A, 06/01/03(b)(c) NRR NRR 1,250,000 1,387,225
- ------------------------------------------------------------------------------------------------
6.25%, Series 1991 B, 10/01/09 AA- A1 1,000,000 1,057,900
- ------------------------------------------------------------------------------------------------
6.50%, Series 1991 B, 10/01/10 AA- A1 530,000 587,288
- ------------------------------------------------------------------------------------------------
Connecticut State Special Tax Obligation
(Transportation Infrastructure Sales and Excise
Tax); RB
5.90%, Series 1991 B, 10/01/99 AA- A1 1,000,000 1,037,100
- ------------------------------------------------------------------------------------------------
6.80%, Series 1989 C, 12/01/99(b)(c) AAA NRR 500,000 543,725
- ------------------------------------------------------------------------------------------------
6.50%, Series 1991 B, 10/01/12 AA- A1 1,500,000 1,644,750
- ------------------------------------------------------------------------------------------------
7,271,688
- ------------------------------------------------------------------------------------------------
WATER & SEWER-8.94%
Connecticut Development Authority (Pfizer Inc.);
Series 1982 Refunding PCR
6.55%, 02/15/13 AAA Aaa 250,000 270,443
- ------------------------------------------------------------------------------------------------
Connecticut Development Authority Water Facility
(Bridgeport Hydraulic Co. Project); Series 1990
Refunding RB
7.25%, 06/01/20 A+ - 800,000 864,984
- ------------------------------------------------------------------------------------------------
Connecticut State Clean Water Fund; Series 1991
Clean Water RB
7.00%, 01/01/11 AA+ Aa 1,100,000 1,218,767
- ------------------------------------------------------------------------------------------------
Manchester (City of) Connecticut Eighth Utilities Fire
District;
Series 1991 GO
6.75%, 08/15/06 - A1 180,000 200,277
- ------------------------------------------------------------------------------------------------
South Central Connecticut Regional Water
Authority; Eighth Series 1990 A Water System RB
6.60%, 08/01/00(b)(c) NRR NRR 250,000 272,005
- ------------------------------------------------------------------------------------------------
South Central Connecticut Regional Water
Authority; Series 1988 Water System RB
6.80%, 08/01/98(b)(c) NRR NRR 535,000 569,587
- ------------------------------------------------------------------------------------------------
3,396,063
- ------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
Financials
<TABLE>
<CAPTION>
RATING(a) MARKET
S&P MOODY'S PAR VALUE
<S> <C> <C> <C> <C>
MISCELLANEOUS-11.14%
Connecticut Development Authority (Economic
Development Projects); 1992 Series Refunding Bonds
6.00%, 11/15/08 AA- Aa $ 500,000 $ 521,770
- ------------------------------------------------------------------------------------------------
Guam (Government of); Series 1995 A GO
4.90%, 09/01/97 BBB - 500,000 501,390
- ------------------------------------------------------------------------------------------------
5.25%, 09/01/99 BBB - 250,000 250,660
- ------------------------------------------------------------------------------------------------
5.375%, 09/01/00 BBB - 250,000 250,518
- ------------------------------------------------------------------------------------------------
Guam (Government of); Series 1994 A GO
5.50%, 08/15/97 BBB - 500,000 503,830
- ------------------------------------------------------------------------------------------------
Guam Airport Authority; Series 1993 B RB
5.00%, 10/01/96(e) BBB - 1,700,000 1,700,000
- ------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth (Highway and Transportation
Authority); Series X RB
5.20%, 07/01/03 A Baa1 500,000 506,480
- ------------------------------------------------------------------------------------------------
4,234,648
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-98.27% 37,342,163
- ------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.73% 658,117
- ------------------------------------------------------------------------------------------------
NET ASSETS-100.00% $38,000,280
================================================================================================
</TABLE>
ABBREVIATIONS:
GO General Obligation Bonds
NRR Not re-rated
PCR Pollution Control Revenue Bonds
RB Revenue Bonds
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Corporation ("S&P"). NRR indicates a
security that is not re-rated subsequent to funding of an escrow
fund (consisting of U.S. Treasury obligations); this funding is
pursuant to an advance refunding of the security.
(b) Secured by an escrow fund of U.S. Treasury obligations.
(c) Subject to an irrevocable call or mandatory put. Market value and
maturity date reflect such call or put.
(d) Secured by bond insurance.
(e) Security subject to alternative minimum tax.
(f) Secured by a letter of credit.
See Notes to Financial Statements.
7
<PAGE> 10
Financials
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $35,633,543) $ 37,342,163
- -----------------------------------------------------------------------------------------
Receivables for:
Capital stock sold 74,721
- -----------------------------------------------------------------------------------------
Interest 703,275
- -----------------------------------------------------------------------------------------
Investment for deferred compensation plan 10,124
- -----------------------------------------------------------------------------------------
Other assets 5,538
- -----------------------------------------------------------------------------------------
Total assets 38,135,821
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Amount due to custodian bank 9,124
- -----------------------------------------------------------------------------------------
Deferred compensation 10,124
- -----------------------------------------------------------------------------------------
Dividends 60,730
- -----------------------------------------------------------------------------------------
Accrued advisory fees 4,671
- -----------------------------------------------------------------------------------------
Accrued administrative service fees 3,940
- -----------------------------------------------------------------------------------------
Accrued distribution fees 23,957
- -----------------------------------------------------------------------------------------
Accrued transfer agent fees 2,353
- -----------------------------------------------------------------------------------------
Accrued operating expenses 20,642
- -----------------------------------------------------------------------------------------
Total liabilities 135,541
- -----------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 38,000,280
=========================================================================================
Capital stock, $.001 par value per share:
Authorized 1,000,000,000
- -----------------------------------------------------------------------------------------
Outstanding 3,517,533
=========================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $ 10.80
=========================================================================================
OFFERING PRICE PER SHARE:
(Net asset value of $10.80 divided by 95.25%) $ 11.34
=========================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
Financials
STATEMENT OF OPERATIONS
For the six months ended September 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $1,140,135
- ----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 96,608
- ----------------------------------------------------------------------------------------
Custodian fees 1,793
- ----------------------------------------------------------------------------------------
Transfer agent fees 11,560
- ----------------------------------------------------------------------------------------
Directors' fees 3,058
- ----------------------------------------------------------------------------------------
Distribution fees 48,298
- ----------------------------------------------------------------------------------------
Administrative services fees 23,640
- ----------------------------------------------------------------------------------------
Other 25,817
- ----------------------------------------------------------------------------------------
Total expenses 210,774
- ----------------------------------------------------------------------------------------
Less expenses assumed by advisor (76,344)
- ----------------------------------------------------------------------------------------
Net expenses 134,430
- ----------------------------------------------------------------------------------------
Net investment income 1,005,705
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES:
Net realized gain (loss) on sales of investment securities (88,064)
- ----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 41,080
- ----------------------------------------------------------------------------------------
Net gain (loss) on investment securities (46,984)
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 958,721
========================================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 1996 and the year ended March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1996 1996
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,005,705 $ 2,046,631
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (88,064) (39,012)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 41,080 362,769
- ---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 958,721 2,370,388
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (988,191) (2,032,807)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) from capital stock transactions (1,325,691) 729,185
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (1,355,161) 1,066,766
- ---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 39,355,441 38,288,675
- ---------------------------------------------------------------------------------------------
End of period $38,000,280 $39,355,441
=============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $36,498,131 $37,823,822
- ---------------------------------------------------------------------------------------------
Undistributed net investment income 22,591 5,077
- ---------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of investment
securities (229,062) (140,998)
- ---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 1,708,620 1,667,540
- ---------------------------------------------------------------------------------------------
$38,000,280 $39,355,441
=============================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
Financials
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. The Company is organized as a Maryland corporation
consisting of three separate portfolios; AIM Tax-Exempt Bond Fund of
Connecticut, AIM Tax-Exempt Cash Fund and the Intermediate Portfolio. Matters
affecting each portfolio are voted on exclusively by the shareholders of such
portfolio. The assets, liabilities and operations of each portfolio are
accounted for separately. Information presented in these financial statements
pertains only to the AIM Tax-Exempt Bond Fund of Connecticut (the "Fund"). The
investment objective of the Fund is to earn a high level of income free from
federal taxes and Connecticut taxes by investing at least 80% of its net assets
in municipal bonds and other municipal securities.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations--Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Board of Directors, provided that securities with a demand feature
exercisable within one to seven days are valued at par. Prices provided by
the pricing service represent valuations of the mean between current bid and
asked market prices which may be determined without exclusive reliance on
quoted prices and may reflect appropriate factors such as institution-size
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, individual trading characteristics and other market
data. Portfolio securities for which prices are not provided by the pricing
service are valued at the mean between the last available bid and asked
prices, unless the Board of Directors or its designees determines that the
mean between the last available bid and asked prices does not accurately
reflect the current market value of the security. Securities for which market
quotations either 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 accordance with methods which are specifically
authorized by the Board of Directors. Notwithstanding the above, short-term
obligations with maturities of sixty days or less are valued at amortized
cost.
B. Securities Transactions and Investment Income--Securities transactions are
recorded on a trade date basis. Realized gains and losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income, adjusted for amortization of premiums and original issue
discounts, is recorded as earned from settlement date and is recorded on the
accrual basis.
C. Dividends and Distributions to Shareholders--It is the policy of the Fund to
declare daily dividends from net investment income. Such dividends are paid
monthly. Net realized capital gains (including net short-term capital gains
and market discounts), if any, are distributed annually.
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 (which may
be carried forward to offset future taxable gains, if any) of $130,061, which
expires, if not previously utilized, through the year 2004. The Fund cannot
distribute capital gains to shareholders until the tax loss carryforwards
have been utilized. In addition, the Fund intends to invest in such municipal
securities to allow it to qualify to pay to shareholders "exempt interest
dividends," as defined in the Internal Revenue Code.
10
<PAGE> 13
Financials
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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.50% of
the Fund's average daily net assets. AIM will, if necessary, reduce its fee for
any fiscal year to the extent required so that the amount of ordinary expenses
of the Fund (excluding interest, taxes, brokerage commissions and extraordinary
expenses) paid or incurred by the Fund for such fiscal year does not exceed the
applicable expense limitations imposed by the state securities regulations in
any state in which the Fund's shares are qualified for sale. During the six
months ended September 30, 1996, AIM voluntarily waived advisory fees of
$76,344.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain costs incurred in providing accounting
services to the Fund. During the six months ended September 30, 1996, the Fund
reimbursed AIM $23,640 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 agent and
shareholder services to the Fund. During the six months ended September 30,
1996, the Fund paid AFS $6,608 for such services.
Under the terms of a master distribution agreement between the Company and the
Fund, A I M Distributors, Inc. ("AIM Distributors") acts as the exclusive
distributor of the Fund's shares. The Company has also adopted a plan pursuant
to Rule 12b-1 under the 1940 Act (the "Plan") with respect to the Fund, whereby
the Fund pays to AIM Distributors compensation at an annual rate of 0.25% of the
Fund's average daily net assets. The Plan is designed to compensate AIM
Distributors for certain promotional and other sales related costs and provides
for periodic payments to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
shares of the Fund. Any amounts not paid as a service fee under such plan would
constitute an asset-based sales charge. The Plan also imposes a cap on the total
sales charges, including asset-based sales charges, that may be paid by the
Fund. During the six months ended September 30, 1996, the Fund paid AIM
Distributors $48,298 as compensation under the Plan. Certain officers and
directors of the Company are officers of AIM, AFS and AIM Distributors.
AIM Distributors received commissions of $14,794 from sales of shares of the
Fund's capital stock during the six months ended September 30, 1996. Such
commissions are not an expense of the Fund. They are deducted from, and are not
included in, the proceeds from sales of capital stock.
During the six months ended September 30, 1996, the Fund paid legal fees of
$871 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Directors. A member of that firm is a director of the Company.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the six months ended September 30, 1996 were
$2,535,600 and $3,193,583, respectively. The amount of unrealized appreciation
(depreciation) of investment securities as of September 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $1,711,862
- ----------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (3,242)
- ----------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $1,708,620
========================================================================================
</TABLE>
Investments have the same cost for tax and financial statement purposes.
11
<PAGE> 14
Financials
NOTE 5-CAPITAL STOCK
Changes in capital stock outstanding for the six months ended September 30, 1996
and the year ended March 31, 1996 were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 MARCH 31, 1996
----------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold 228,562 $ 2,459,907 555,351 $ 6,036,362
- ---------------------------------------------------------------------------------------------- -------------------------
Issued as reinvestment of dividends 58,388 628,510 116,353 1,264,613
- ---------------------------------------------------------------------------------------------- -------------------------
Reacquired (410,683) (4,414,108) (603,962) (6,571,790)
- ---------------------------------------------------------------------------------------------- -------------------------
(123,733) $(1,325,691) 67,742 $ 729,185
============================================================================================== =========================
</TABLE>
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during the six months ended September 30, 1996, each of the years in
the two-year period ended March 31, 1996, the three months ended March 31, 1994,
each of the years in the four-year period ended December 31, 1993 and the period
October 3, 1989 (date operations commenced) through December 31, 1989.
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
SEPTEMBER 30, --------------------------------------------- ------------
1996 1996 1995 1994 1993
------------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.81 $ 10.71 $ 10.69 $ 11.29 $ 10.65
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.28 0.56 0.56 0.15 0.60
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Net gains (losses) on securities (both
realized and unrealized) (0.01) 0.10 0.04 (0.61) 0.65
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.27 0.66 0.60 (0.46) 1.25
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.28) (0.56) (0.57) (0.14) (0.60)
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Distributions from net realized capital
gains -- -- -- -- (0.01)
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Returns of capital -- -- (0.01) -- --
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.28) (0.56) (0.58) (0.14) (0.61)
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.80 $ 10.81 $ 10.71 $ 10.69 $ 11.29
============================================= ========== ========== ========== ========== ==========
Total return(b) 2.50% 6.24% 5.78% (4.06)% 11.99%
============================================= ========== ========== ========== ========== ==========
Ratio/supplemental data:
Net assets, end of period (000s omitted) $ 38,000 $ 39,355 $ 38,289 $ 42,361 $ 46,224
============================================= ========== ========== ========== ========== ==========
Ratio of expenses to average net assets(c) 0.70%(d) 0.66% 0.55% 0.50%(e) 0.34%
============================================= ========== ========== ========== ========== ==========
Ratio of net investment income to average net
assets(c) 5.21%(d) 5.16% 5.37% 5.32%(e) 5.42%
============================================= ========== ========== ========== ========== ==========
Portfolio turnover rate 7% 17% 7% 2% 5%
============================================= ========== ========== ========== ========== ==========
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------
1992(a) 1991 1990 1989
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.52 $ 10.07 $ 10.19 $ 10.00
- --------------------------------------------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.66 0.69 0.67 0.14
- --------------------------------------------- ---------- ---------- ---------- ----------
Net gains (losses) on securities (both
realized and unrealized) 0.17 0.50 (0.10) 0.16
- --------------------------------------------- ---------- ---------- ---------- ----------
Total from investment operations 0.83 1.19 0.57 0.30
- --------------------------------------------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.66) (0.69) (0.69) (0.11)
- --------------------------------------------- ---------- ---------- ---------- ----------
Distributions from net realized capital
gains (0.04) (0.05) -- --
- --------------------------------------------- ---------- ---------- ---------- ----------
Returns of capital -- -- -- --
- --------------------------------------------- ---------- ---------- ---------- ----------
Total distributions (0.70) (0.74) (0.69) (0.11)
- --------------------------------------------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.65 $ 10.52 $ 10.07 $ 10.19
============================================= ========== ========== ========== ==========
Total return(b) 8.22% 12.23% 5.88% 3.06%
============================================= ========== ========== ========== ==========
Ratio/supplemental data:
Net assets, end of period (000s omitted) $ 33,110 $ 27,298 $ 16,685 $ 6,556
============================================= ========== ========== ========== ==========
Ratio of expenses to average net assets(c) 0.25% 0.25% 0.25% 0.25%(e)
============================================= ========== ========== ========== ==========
Ratio of net investment income to average net
assets(c) 6.25% 6.73% 6.82% 6.21%(e)
============================================= ========== ========== ========== ==========
Portfolio turnover rate 43% 43% 57% 63%
============================================= ========== ========== ========== ==========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(c) After waiver of advisory fees and expense reimbursements. Ratios of expenses
to average net assets prior to waiver of advisory fees and expense
reimbursements are 1.09% (annualized), 1.16%, 1.13%, 1.23% (annualized),
1.30%, 1.12%, 1.26%, 1.33%, and 1.99% (annualized) for the six months ended
September 30, 1996 and the period 1996-89, respectively. Ratios of net
investment income to average net assets prior to waiver of advisory fees and
expense reimbursements are 4.81% (annualized), 4.66%, 4.79%, 4.59%
(annualized), 4.45%, 5.38%, 5.72%, 5.74%, and 4.48% (annualized) for the six
months ended September 30, 1996 and the period 1996-89, respectively.
(d) Ratios are annualized and based on average daily net assets of $38,532,632.
(e) Annualized.
NOTE 7-SUBSEQUENT EVENT
On November 4, 1996, A I M Management Group Inc. ("AIM Management") and INVESCO
PLC announced the execution of an Agreement and Plan of Merger pursuant to which
AIM Management will be merged with and into a direct wholly-owned subsidiary of
INVESCO PLC. AIM Management is the parent company of the Fund's advisor. The
merger is conditional on, among other things, approval by the shareholders of
INVESCO PLC and AIM Management and the shareholders of the AIM Funds and the
mutual funds managed by INVESCO PLC, and is expected to take place during the
first quarter of 1997.
12
<PAGE> 15
Management's
Discussion & Analysis
<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046-1173
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Formerly Director, President,
and Chief Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 1919
Owen Daly II Gary T. Crum Houston, TX 77046-1173
Director Senior Vice President
Cortland Trust Inc. TRANSFER AGENT
Carol F. Relihan
Carl Frischling Senior Vice President and Secretary A I M Fund Services, Inc.
Partner P.O. Box 4739
Kramer, Levin, Naftalis & Frankel Dana R. Sutton Houston, TX 77210-4739
Vice President
Robert H. Graham and Assistant Treasurer CUSTODIAN
President and Chief Operating Officer
A I M Management Group Inc. Stuart W. Coco The Bank of New York
Vice President 110 Washington Street
John F. Kroeger New York, NY 10286
Formerly Consultant Melville B. Cox
Wendell & Stockel Associates, Inc. Vice President COUNSEL TO THE FUND
Lewis F. Pennock Karen Dunn Kelley Ballard Spahr
Attorney Vice President Andrews & Ingersoll
1735 Market Street
Ian W. Robinson P. Michelle Grace Philadelphia, PA 19103
Consultant; Former Executive Assistant Secretary
Vice President and COUNSEL TO THE DIRECTORS
Chief Financial Officer David L. Kite
Bell Atlantic Management Assistant Secretary Kramer, Levin, Naftalis & Frankel
Services, Inc. 919 Third Avenue
Nancy L. Martin New York, NY 10022
Louis S. Sklar Assistant Secretary
Executive Vice President DISTRIBUTOR
Hines Interests Ofelia M. Mayo
Limited Partnership Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Kathleen J. Pflueger Suite 1919
Assistant Secretary Houston, TX 77046-1173
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
[PHOTO OF ELEVEN GREENWAY PLAZA THE AIM FAMILY OF FUNDS--Registered Trademark--
APPEARS HERE]
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH
AIM Blue Chip Fund
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH
AIM Global Utilities Fund
HIGH CURRENT INCOME
AIM High Yield Fund
CURRENT INCOME
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE
OF SAFETY
AIM Intermediate Government Fund
HIGH DEGREE OF SAFETY AND
CURRENT INCOME
AIM Limited Maturity Treasury Shares
STABILITY, LIQUIDITY, AND
CURRENT INCOME
AIM Money Market Fund
STABILITY, LIQUIDITY, AND
CURRENT TAX-FREE INCOME
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided leadership
in the mutual fund industry since 1976 and currently
manages approximately $59 billion in assets for more
than 3.5 million shareholders, including individual
investors, corporate clients, and financial *AIM Aggressive Growth Fund was closed to new investors
institutions. The AIM Family of Funds--Registered on July 18, 1995. For more complete information about
Trademark--is distributed nationwide, and AIM ranks today any AIM Fund(s), including sales charges and expenses,
among the nation's top 15 mutual fund companies in assets ask your financial consultant or securities dealer for a
under Management, according to Lipper Analytical free prospectus(es). Please read the prospectus(es)
Services, Inc. carefully before you invest or send money.
[AIM LOGO APPEARS HERE] ---------------
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 1919 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
---------------
</TABLE>
