<PAGE> 1
[AIM LOGO APPEARS HERE]
AIM HIGH INCOME MUNICIPAL FUND
ANNUAL REPORT MARCH 31, 1998
<PAGE> 2
-----------------------------------
AIM HIGH INCOME
MUNICIPAL FUND
For shareholders who seek
a high level of current income
exempt from federal taxes
by investing in a
diversified portfolio of
fixed-income securities.
-----------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM High Income Municipal Fund's performance figures are historical and
reflect reinvestment of all distributions and changes in net asset value.
Unless otherwise indicated, the Fund's performance is computed at net asset
value without a sales charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund's Class B and Class C shares will differ from
that of Class A shares due to differing fees and expenses.
o Because Class A, B, and C shares have been offered for less than one year
(since 1/2/98) all total return figures for Class A, B, and C shares reflect
cumulative total return that has not been annualized.
o During the initial fiscal period, the Fund paid distributions for Class A,
Class B, and Class C shares of $0.114, $0.091, and $0.089 per share,
respectively.
o 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 annualized distribution rate reflects the Fund's most recent
monthly dividend distribution multiplied by 12 and divided by the most
recent month-end net asset value.
o The Fund invests primarily in higher-yielding, lower-rated municipal bonds,
commonly known as "junk bonds." These bonds have a greater risk of price
fluctuation and loss of principal and income than U.S. government
securities, such as U.S. Treasury bonds and bills, which offer a government
guarantee as to the repayment of principal and interest if held to maturity.
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 Past performance cannot guarantee comparable future results.
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
The Chairman's Letter
Dear Fellow Shareholder:
We are pleased to send you this first Fund report on the AIM
High Income Municipal Fund, a portfolio of high-yield
[PHOTO OF municipal bonds which commenced sales on January 2, 1998.
Charles T. Municipal bonds finished strongly in 1997 in
Bauer, anticipation that the Federal Reserve Board (the Fed) would
Chairman of lower interest rates to counteract the dampening effects
the Board of from the Far East currency situation. The rally in
THE FUND fixed-income markets was reflected in the yield on the
APPEARS HERE] benchmark 30-year U.S. Treasury Bond, which fell from 6.27%
just prior to the Hong Kong stock market plunge on October
27 to 5.92% on December 31, 1997.
As interest rates fell, more new municipal bonds entered
the market, ending a long-standing drought in new-issue
supply and increasing liquidity.
By the time of this report, the much-anticipated
economic slowdown had yet to arrive. Municipal-bond and
Treasury yields, which had continued their downward spiral in January, headed
upward in February as the chance of the Fed's lowering rates was pushed further
into the future. Just as the reporting period closed, the Fed chose to leave the
benchmark federal funds rate at 5.50%, unchanged for a full 12 months. The yield
on the 30-year U.S. Treasury Bond stood at 5.93%, about the same as at the
beginning of the quarter.
The following pages feature an interview with your Fund's managers. They
discuss their investment strategies, how your Fund performed in this context,
and their outlook for the future.
EDUCATION EVENT WILL OFFER INVESTORS A REVIEW OF INVESTMENT POSSIBILITIES
AIM has always championed investor education, convinced that a more
knowledgeable shareholder is a better customer. At AIM, we strongly believe
every investor is well served by fundamental information about the saving and
investing choices offered by the marketplace. A great deal of investment
information will be available during an upcoming event that we hope our
shareholders will participate in and learn from to the greatest extent possible.
The event concerns citizens' financial planning for retirement, a subject of
growing urgency as the population ages and the solvency of the Social Security
system is increasingly debatable.
The first National Summit on Retirement Savings will be held at the White
House in June. Under the auspices of the Department of Labor working through
public/private partnership, the summit's goal is to advance the public's
knowledge of retirement savings through development of a broad-based education
program and to develop recommendations for public/private action that would
promote private retirement savings among American workers. We encourage you to
look for further information on this White House summit in the national and
local press.
We are pleased to send you this report on your AIM Fund. Please contact our
Client Services department at 800-959-4246 if you have any questions or
comments. Remember that automated information about your account is available 24
hours a day on the AIM Investor Line, 800-246-5463. Account information and much
more can be accessed through our Web site, at www.aimfunds.com.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
The Managers' Overview
NEW FUND OFF TO IMPRESSIVE START
A roundtable discussion with the Fund management team for AIM High Income
Municipal Fund for the fiscal period ended March 31, 1998.
- --------------------------------------------------------------------------------
AIM HIGH INCOME MUNICIPAL FUND PROVIDES SOLID INCOME
As of 3/31/98
- --------------------------------------------------------------------------------
30-Day
SEC Yield
30-Day Taxable Equivalent at Maximum Taxable Equivalent
Distribution Rate Distribution Rate* Offering Price 30-Day SEC Yield*
- --------------------------------------------------------------------------------
Class A 5.14% 8.51% 4.87% 8.06%
Class B 4.39 7.27 4.31 7.14
Class C 4.39 7.27 4.31 7.14
================================================================================
*Assumes highest marginal federal tax rate of 39.6%
Q. HOW DID THE FUND PERFORM DURING ITS FIRST THREE MONTHS OF EXISTENCE?
A. We are pleased with the Fund's initial performance. At the end of the
reporting period, the Fund was already offering attractive monthly income,
exempt from federal income taxes, as illustrated by the chart below.
The Fund also was already well diversified with 50 holdings spread
across several market sectors and representing nearly every region of the
U.S. Assets in the Fund grew rapidly and stood at $21 million at the end of
the reporting period.
For the period ended March 31, 1998, cumulative total return was 1.04%,
0.81%, and 0.79%, for Class A, B and C shares, respectively. Please keep in
mind, total return figures reflect a less than three-month period. Moreover,
the Fund is managed primarily for income rather than total return.
One of the Fund's goals is stability of net asset value per share.
During the reporting period, net asset value per share remained within a
relatively narrow range of $9.93 to $10.04.
Q. WHAT WERE THE MAJOR TRENDS IN THE MUNICIPAL BOND MARKET?
A. Most types of bonds, including municipal issues, tended to appreciate in
value as the fiscal year progressed because of low inflation and falling
interest rates. During the 12-month period ended March 31, consumer prices
rose just 1.4%, and the Federal Reserve Board (the Fed) left the federal
funds rate unchanged.
The municipal-bond market, including the high-yield sector, generally
reflected trends in the U.S. Treasury market. However, municipal bonds,
especially high-yield securities, tended to exhibit greater price stability
as they were less sensitive to movements in interest rates. The year also
saw a dramatic increase in new municipal-bond supply as issuers of these
securities, including state and local governments, hospitals and
universities, rushed to take advantage of falling interest rates.
By January 1998, bond yields had fallen to their lowest levels in
decades as bond prices continued to rise. While yields climbed in February
and March, they were still low at the end of the reporting period.
Q. IN SUCH AN ENVIRONMENT, WHY WERE HIGH-YIELD MUNICIPAL BONDS ATTRACTIVE?
A. Because they continued to offer some of the best yields in the
municipal-bond market--yields that were quite compelling considering the low
rate of inflation. Additionally, the overall credit quality of high-yield
municipal bonds was good, and the large number of new issues and refundings
made it possible to find attractively priced securities within this sector.
Q. HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
A. Revenue bonds composed 96% of the portfolio while general obligation bonds
formed 4%. Revenue bonds are paid with income generated by specific
projects. This is usually a more reliable source of income than the tax
dollars used to support general obligation bonds. State and local
governments are finding it increasingly difficult to raise taxes to support
general obligation bonds.
Sectors that we liked within the high-yield municipal-bond market
included hospitals, life-care facilities, and nursing homes. These sectors
are catering to the needs of an aging population. At the end of the
reporting period, hospital bonds composed about 24.7% of the portfolio;
life-care bonds, 19.3%; and nursing home bonds, 19.0%.
Q. WHAT WAS THE CREDIT QUALITY OF THE PORTFOLIO?
A. As of March 31, 1998, the Fund had an average portfolio quality rating
equivalent to BB- as measured by Standard & Poor's Corporation (S&P), a
widely known credit-rating agency. S&P ratings are historical and are based
on analysis of the credit quality of the individual municipal securities in
the portfolio. Bonds rated BB or better composed approximately 32% of the
portfolio. Higher-quality, non-rated securities made up 68% of the Fund's
See important fund and index disclosures inside front cover.
2
<PAGE> 5
holdings. Most of the bonds in the portfolio were backed by collateral,
which can be sold to help pay the debt obligations on the bonds, if
necessary.
Q. WHAT GUIDELINES DO YOU FOLLOW IN SELECTING BONDS FOR THE PORTFOLIO?
A. Although yield is a high priority, we won't sacrifice quality for yield. We
are strongly committed to this principle and will not deviate from it. Since
our primary focus is on revenue bonds, we look for issues that are
associated with projects that make economic sense and have experienced
management. We also look for issues that are undervalued relative to the
rest of the market.
Q. CAN YOU DESCRIBE THE STEPS YOU TAKE BEFORE BUYING A SECURITY?
A. The selection of bonds for the portfolio is a thorough process that can take
four to six weeks. We review dozens of investment opportunities each week.
We read feasibility, environmental-impact, and other studies pertaining to
various projects. The bond-selection process also can involve actual visits
to the project site and meetings with project management teams.
Each of our in-house analysts then writes credit reports and internally
rates each non-rated bond. We believe that our internal rating system is
more valuable and more reliable than a rating assigned by an outside agency.
Once a bond has been purchased, we continue to monitor its credit quality as
long as it is in the portfolio.
Q. WHAT IMPACT DO YOU EXPECT THE TAXPAYERS' RELIEF ACT OF 1997 TO HAVE FOR
INVESTORS?
A. The Taxpayer Relief Act of 1997 made investing more attractive by lowering
the long-term capital gains tax rate. At the same time, it did not diminish
the importance of municipal bond funds as sources of federally tax-exempt
income as it left tax rates on ordinary income unchanged. Consequently, for
the growing number of Americans in the 28% tax bracket or higher, municipal
bond funds remain an attractive investment option.
Q. WHAT IS YOUR OUTLOOK FOR THE FUTURE?
A. We remain optimistic about bonds, including high-yield municipal issues. If
the economy continues to grow at a steady pace and inflation remains low, it
should bode well for fixed-income securities. Moreover, the yields and
prices of municipal bonds are attractive relative to taxable U.S. Treasury
securities. Consequently, as Treasury supply diminishes in response to a
shrinking federal deficit and more Americans become subject to higher tax
brackets, municipal bonds could gain in popularity.
If the Fed leaves monetary policy unchanged in the months ahead, bond
yields should remain within a relatively narrow range around their current
levels. If yields rise, however, we are prepared to take advantage of such a
trend by investing in higher income-generating securities.
<TABLE>
<CAPTION>
================================================================================
Top Five Bond Holdings
- --------------------------------------------------------------------------------
As of 3/31/98, based on total net assets
Coupon Maturity %
<S> <C> <C> <C>
1. Garden City Hospital Finance Authority 5.75% 09/01/17 6.98%
2. Erie (County of) Industrial 6.00% 02/01/28 4.97%
Development Agency
3. New Jersey Economic 5.75% 01/01/24 4.72%
Development Authority
4. Massachusetts State Health & Education 5.375% 07/15/28 3.92%
Facilities Authority
5. Fulton (County of) Housing Authority 6.50% 02/01/28 3.67%
================================================================================
</TABLE>
PORTFOLIO COMPOSITION
As of 3/31/98, based on total investments
================================================================================
CREDIT RATING OF HOLDINGS TYPES OF MUNICIPAL BONDS
- --------------------------------------------------------------------------------
BB 2.8% Revenue 96%
BBB 19.8% General Obligation 4%
A 7.1% Number of Holdings 50
AAA 1.9% Average Maturity 24.75 Years
Non-Rated 68.4% Duration 9.4 Years
Please keep in mind the Fund's portfolio is subject to change and there is no
assurance the Fund will continue to hold any particular security.
================================================================================
See important fund and index disclosures inside front cover.
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
March 31, 1998
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MUNICIPAL OBLIGATIONS-98.77%
COLORADO-1.13%
Colorado Health Facilities Authority
(National Benevolent Association);
Refunding Series B RB
5.25%, 02/01/28 $ 250 $ 240,160
- --------------------------------------------------------------
GEORGIA-3.67%
Fulton (County of) Housing Authority
(Azalea Manor Project); Multifamily
Housing RB
6.50%, 02/01/28 780 779,906
- --------------------------------------------------------------
HAWAII-2.33%
Hawaii (State of) Department of
Transportation (Continental Airlines,
Inc.); Special Facilities RB
5.625%, 11/15/27(a) 500 494,980
- --------------------------------------------------------------
ILLINOIS-2.54%
Crestwood (City of); Tax Increment
Revenue Refunding Non-Qualified Bonds
7.25%, 12/01/08 100 107,580
- --------------------------------------------------------------
Illinois Health Facilities Authority
(Bohemian-Tabor Hills); Refunding
Series RB
5.90%, 11/15/24 325 326,459
- --------------------------------------------------------------
Saint Charles (City of) (Tri-city Center
Associates Limited Project); IDR
7.50%, 11/01/13 100 106,046
- --------------------------------------------------------------
540,085
- --------------------------------------------------------------
INDIANA-2.28%
Indiana Health Facilities Financing
Authority (Jackson County Scheck
Memorial); Hospital Refunding RB
5.125%, 02/15/17 500 483,245
- --------------------------------------------------------------
IOWA-3.79%
Iowa Finance Authority Community
Rehabilitation Providers (Lutheran
Children's Home Society-Bremwood
Project); RB
5.80%, 12/01/24 700 702,086
- --------------------------------------------------------------
Iowa Finance Authority (Park West
Housing Project); Multi-Family
Refunding RB
8.00%, 10/01/23 100 103,353
- --------------------------------------------------------------
805,439
- --------------------------------------------------------------
KANSAS-0.21%
Lawrence (City of) (Holiday Inn
Project); Commercial Development
Senior Refunding Series A RB
8.00%, 07/01/16 40 43,864
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MARYLAND-0.96%
Fredrick (County of) Retirement
Community (Buckingham's Choice Inc.
Facility); Series A RB
5.90%, 01/01/17 $ 200 $ 202,920
- --------------------------------------------------------------
MASSACHUSETTS-3.92%
Massachusetts State Health and Education
Facilities Authority
(Milford-Whitinsville Regional
Hospital); Series C RB
5.375%, 07/15/28 845 832,739
- --------------------------------------------------------------
MICHIGAN-11.15%
Garden City Hospital Finance Authority
(Garden City Hospital Obligation);
Hospital Refunding Series A RB
5.75%, 09/01/17 1,500 1,481,790
- --------------------------------------------------------------
Michigan (State of) Strategic Fund
(Consumers Power Project); Variable
Rate Demand RB
3.80%, 04/15/18(b) 390 390,000
- --------------------------------------------------------------
Tawas (City of) Hospital Finance
Authority (St. Joseph Health System);
Refunding Series A RB
5.75%, 02/15/23 500 494,420
- --------------------------------------------------------------
2,366,210
- --------------------------------------------------------------
MINNESOTA-9.16%
Andover (City of) (Presbyterian Homes
Inc. Project); Elderly Housing RB
6.25%, 12/01/27 500 501,835
- --------------------------------------------------------------
Columbia Heights (City of) Multi-Family
and Health Care Facility (Crest View
Corp Project); RB
6.00%, 03/01/33 500 501,080
- --------------------------------------------------------------
Minneapolis Health Care Facility
(Ebenezer Society Project); Series A
RB
7.00%, 07/01/12 100 104,602
- --------------------------------------------------------------
Northfield (City of) Health Care
Facilities (Retirement Center);
Refunding and Improvement Series A RB
5.75%, 05/01/16 335 335,559
- --------------------------------------------------------------
6.00%, 05/01/28 500 501,110
- --------------------------------------------------------------
1,944,186
- --------------------------------------------------------------
MISSISSIPPI-1.29%
Ridgeland Urban Renewal (The Orchard
Limited Project); Refunding Series A
RB
7.75%, 12/01/15 250 273,113
- --------------------------------------------------------------
MISSOURI-7.00%
Bolivar (City of) Industrial Development
Authority (Citizens Memorial Health
Care Foundation); Refunding and
Improvement RB
5.75%, 07/01/17 500 493,365
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MISSOURI-(CONTINUED)
Good Shepherd Nursing Home District;
Nursing Home Facilities Refunding RB
5.90%, 08/15/23 $ 500 $ 501,485
- --------------------------------------------------------------
Missouri State Health and Educational
Facilities Authority (Freeman Health
Systems Project); Health Facilities RB
5.25%, 02/15/18 500 490,295
- --------------------------------------------------------------
1,485,145
- --------------------------------------------------------------
NEVADA-2.34%
Clark (County of) (Nevada Power Co.
Project); Refunding Series C IDR
5.50%, 10/01/30 500 496,250
- --------------------------------------------------------------
NEW HAMPSHIRE-3.76%
New Hampshire Higher Educational and
Health Facilities Authority (Daniel
Webster College); RB
7.625%, 07/01/16 100 110,230
- --------------------------------------------------------------
New Hampshire Higher Educational and
Health Facilities Authority (Franklin
Pierce College); RB
6.00%, 04/01/04(c) 55 60,612
- --------------------------------------------------------------
5.25%, 10/01/18 350 345,244
- --------------------------------------------------------------
6.00%, 10/01/18 30 30,242
- --------------------------------------------------------------
New Hampshire Higher Educational and
Health Facilities Authority (Monadnock
Community Hospital); Hospital RB
5.70%, 10/01/20 250 251,885
- --------------------------------------------------------------
798,213
- --------------------------------------------------------------
NEW JERSEY-8.07%
New Jersey Economic Development
Authority (Franciscan Oaks Project);
First Mortgage RB
5.75%, 10/01/23 500 506,710
- --------------------------------------------------------------
New Jersey Economic Development
Authority (Keswick Pines Inc.); First
Mortgage Refunding RB
5.75%, 01/01/24 1,000 1,002,100
- --------------------------------------------------------------
New Jersey Economic Development
Authority (Leisure Park Project);
Series A RB
5.875%, 12/01/27 200 203,276
- --------------------------------------------------------------
1,712,086
- --------------------------------------------------------------
NEW YORK-11.41%
Erie (County of) Industrial Development
Agency (Episcopal Church Home); Life
Care Community Series A RB
6.00%, 02/01/28 1,050 1,054,662
- --------------------------------------------------------------
New York Industrial Development Agency
(Marymount Manhattan College Project);
Civic Facility RB
7.00%, 07/01/23 150 161,310
- --------------------------------------------------------------
New York (City of); Unlimited Tax Series
C GO
5.375%, 10/01/22 355 355,756
- --------------------------------------------------------------
5.375%, 11/15/27 500 498,860
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
NEW YORK-(CONTINUED)
Suffolk (County of) Industrial
Development Agency (Spellman High
Voltage Facility); Series A IDR
6.375%, 12/01/17(a) $ 350 $ 352,366
- --------------------------------------------------------------
2,422,954
- --------------------------------------------------------------
NORTH CAROLINA-8.00%
Charlotte (City of) (Charlotte/Douglas
International Airport); Refunding
Special Facilities RB
5.60%, 07/01/27(a) 400 394,804
- --------------------------------------------------------------
North Carolina Medical Care Community
Health Care Facilities (Deerfield
Episcopal Retirement); First Mortgage
Series RB
6.00%, 11/01/19 300 305,031
- --------------------------------------------------------------
North Carolina Medical Care Community
Health Care Facilities (Glenaire
Project); First Mortgage Series RB
5.75%, 07/01/19 500 498,550
- --------------------------------------------------------------
5.85%, 07/01/27 500 500,650
- --------------------------------------------------------------
1,699,035
- --------------------------------------------------------------
NORTH DAKOTA-2.43%
Grand Forks Senior Housing (4000 Valley
Square Project); Special Term Series
RB
6.375%, 12/01/34 500 515,770
- --------------------------------------------------------------
OHIO-0.98%
Fairfield (City of) Economic Development
(Beverly Enterprises Project);
Refunding Series RB
8.50%, 01/01/03 190 207,167
- --------------------------------------------------------------
PENNSYLVANIA-3.18%
Allegheny (County of) Industrial
Development Authority (USX Corp.);
Refunding Environmental Improvement RB
5.60%, 09/01/30 500 502,995
- --------------------------------------------------------------
Doylestown Hospital Authority (Pine Run
Retirement Hospital); Hospital Series
A RB
7.20%, 07/01/03(b) 150 172,290
- --------------------------------------------------------------
675,285
- --------------------------------------------------------------
TENNESSEE-1.87%
Nashville and Davidson (County of)
Health and Educational Facilities
Board of Metro Government (Blakeford
at Green Hills); Refunding RB
5.65%, 07/01/24 400 396,716
- --------------------------------------------------------------
TEXAS-3.08%
Harrison County Health Facilities
Development Corp. (Marshall Regional
Medical Center Project); Hospital RB
5.50%, 01/01/18 650 653,289
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
WEST VIRGINIA-2.33%
Braxton (County of) (Weyerhaeuser Co.
Project); Refunding Solid Waste
Disposal RB
5.40%, 05/01/25(a) $ 500 $ 494,850
- --------------------------------------------------------------
WYOMING-1.89%
Teton (County of) Hospital District (St.
John's Hospital); Refunding and
Improvement Hospital RB
5.80%, 12/01/17 400 400,704
- --------------------------------------------------------------
TOTAL INVESTMENTS-98.77% 20,964,311(d)
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.23% 260,152
- --------------------------------------------------------------
NET ASSETS-100.00% $21,224,463
==============================================================
</TABLE>
Abbreviations:
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
RB - Revenue Bonds
Notes to Schedule of Investments:
(a)Security subject to the alternative minimum tax.
(b)Demand Security; payable upon demand by the Fund with usually no more than
seven calendar days' notice. Interest rates are redetermined periodically.
Rates shown are in effect on 03/31/98.
(c)Subject to an irrevocable call or mandatory put by the issuer. Market value
and maturity date reflect such call or put.
(d)Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$20,941,334) $ 20,964,311
- ---------------------------------------------------------
Cash 24,115
- ---------------------------------------------------------
Receivables for:
Capital stock sold 1,723,999
- ---------------------------------------------------------
Interest 253,721
- ---------------------------------------------------------
Advisor 27,650
- ---------------------------------------------------------
Other assets 16,776
- ---------------------------------------------------------
Total assets 23,010,572
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,724,773
- ---------------------------------------------------------
Dividends 39,453
- ---------------------------------------------------------
Accrued administrative services fees 6,198
- ---------------------------------------------------------
Accrued directors' fees 1,995
- ---------------------------------------------------------
Accrued distribution fees 10,149
- ---------------------------------------------------------
Accrued operating expenses 3,541
- ---------------------------------------------------------
Total liabilities 1,786,109
- ---------------------------------------------------------
Net assets applicable to shares
outstanding $ 21,224,463
=========================================================
NET ASSETS:
Class A $ 17,786,709
=========================================================
Class B $ 2,699,327
=========================================================
Class C $ 738,427
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER
SHARE:
Class A:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 1,779,956
=========================================================
Class B:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 270,279
=========================================================
Class C:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 73,932
=========================================================
Class A:
Net asset value and redemption price per
share $ 9.99
=========================================================
Offering price per share:
(Net asset value of $9.99 divided
by 95.25%) $ 10.49
=========================================================
Class B:
Net asset value and offering price per
share $ 9.99
=========================================================
Class C:
Net asset value and offering price per
share $ 9.99
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 2, 1998 (DATE OPERATIONS COMMENCED)
THROUGH MARCH 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 174,814
- --------------------------------------------------------
EXPENSES:
Advisory fees 20,756
- --------------------------------------------------------
Administrative services fees 18,594
- --------------------------------------------------------
Distribution fees -- Class A 7,728
- --------------------------------------------------------
Distribution fees -- Class B 2,778
- --------------------------------------------------------
Distribution fees -- Class C 904
- --------------------------------------------------------
Transfer agent fees 538
- --------------------------------------------------------
Registration and filing fees 3,234
- --------------------------------------------------------
Other 5,943
- --------------------------------------------------------
Total expenses 59,937
- --------------------------------------------------------
Less: Fee waivers and expense
reimbursements (48,298)
- --------------------------------------------------------
Net expenses 11,639
- --------------------------------------------------------
Net investment income 163,175
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) on sales of
investment securities (12,029)
- --------------------------------------------------------
Net unrealized appreciation of investment
securities 22,977
- --------------------------------------------------------
Net gain on investment securities 10,948
- --------------------------------------------------------
Net increase in net assets resulting from
operations $ 174,123
========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD JANUARY 2, 1998 (DATE OPERATIONS COMMENCED) THROUGH MARCH 31,
1998
<TABLE>
<S> <C>
OPERATIONS:
Net investment income $ 163,175
- -------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (12,029)
- -------------------------------------------------------------------------
Net unrealized appreciation of investment securities 22,977
- -------------------------------------------------------------------------
Net increase in net assets resulting from operations 174,123
- -------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Class A (147,248)
- -------------------------------------------------------------------------
Class B (10,991)
- -------------------------------------------------------------------------
Class C (3,590)
- -------------------------------------------------------------------------
Net increase from capital stock transactions:
Class A 17,776,038
- -------------------------------------------------------------------------
Class B 2,698,087
- -------------------------------------------------------------------------
Class C 738,044
- -------------------------------------------------------------------------
Net increase in net assets 21,224,463
- -------------------------------------------------------------------------
NET ASSETS:
Beginning of period --
- -------------------------------------------------------------------------
End of period $21,224,463
=========================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $21,212,169
- -------------------------------------------------------------------------
Undistributed net investment income 1,346
- -------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (12,029)
- -------------------------------------------------------------------------
Unrealized appreciation of investment securities 22,977
- -------------------------------------------------------------------------
$21,224,463
=========================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
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 four separate portfolios: AIM High Income Municipal Fund, AIM Tax-
Free Intermediate Fund, AIM Tax-Exempt Cash Fund and AIM Tax-Exempt Bond Fund of
Connecticut. Matters affecting each portfolio or class are voted on exclusively
by the shareholders of such portfolio or class. The assets, liabilities and
operations of each portfolio are accounted for separately. Information presented
in these financial statements pertains only to AIM High Income Municipal Fund
(the "Fund"). The Fund currently offers three different classes of shares: the
Class A shares, the Class B shares and the Class C shares, all of which
commenced operations on January 2, 1998. Class A shares are sold with a
front-end sales charge. Class B and Class C shares are sold with a contingent
deferred sales charge. The investment objective of the Fund is to achieve a high
level of current income which is exempt from federal income taxes.
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. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Company's Board of Directors, provided that securities with a demand feature
exercisable within one to seven days will be valued at par. Prices provided
by the pricing service 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 persons designated by the Board of Directors,
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
8
<PAGE> 11
questionable are valued at fair value as determined in good faith by or under
the supervision of the Company's officers in a manner specifically authorized
by the Board of Directors. Notwithstanding the above, short-term obligations
with maturities of 60 days or less are valued at amortized cost.
The Fund's investments include lower-rated and unrated debt securities
which may be more susceptible to adverse economic conditions than investment
grade holdings. These securities are often subordinated to the prior claims
of other senior lenders and uncertainties exist as to an issuer's ability to
meet principal and interest payments. Securities rated below investment grade
and comparable unrated securities represented approximately 68.40% of the
Fund's investment portfolio at the end of the period.
B. Securities Transactions and Investment Income -- Securities transactions are
recorded on a trade date basis. Realized gains and losses are computed on the
basis of specific identification of the securities sold. Interest income,
adjusted for amortization of premiums and original issue discounts, is 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. In addition, the Fund intends to
invest in such municipal securities to allow it to qualify to pay "exempt
interest dividends," as defined in the Internal Revenue Code.
E. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.60% of
the first $500 million of the Fund's average daily net assets, plus 0.55% of the
Fund's average daily net assets of the next $500 million, plus 0.50% of the next
$500 million of the Fund's average daily net assets, plus 0.45% of the Fund's
average daily net assets in excess of $1.5 billion. AIM has agreed to waive
advisory fees on the Fund. During the period January 2, 1998 (date operations
commenced) through March 31, 1998, AIM waived advisory fees and reimbursed
expenses of $48,298.
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 period January 2, 1998 (date operations
commenced) through March 31, 1998, the Fund reimbursed AIM $18,594 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 period January 2, 1998 (date
operations commenced) through March 31, 1998, the Fund paid AFS $280 for such
services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Company has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares ("Class B Plan") (collectively, the "Plans"). The Fund,
pursuant to the Class A and C Plan, pays AIM Distributors compensation at an
annual rate of 0.25% of the average daily net assets of the Class A shares and
1.00% of the average daily net assets of the Class C shares. The Fund, pursuant
to the Class B Plan, pays AIM Distributors an annual rate of 1.00% of the
average daily net assets attributable to the Class B shares. Of these amounts,
the Fund may pay a service fee of 0.25% of the average daily net assets of the
Class A, Class B or Class C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee by the Class B or Class C shares under the
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges, that may be
paid by the respective classes. AIM Distributors may, from time to time, assign,
transfer, or pledge to one or more designees, its rights to all or a designated
portion of (a) compensation received by AIM Distributors from the Fund pursuant
to the Class B Plan (but not AIM Distributors' duties and obligations pursuant
to the Class B Plan) and (b) any contingent deferred sales charges received by
AIM Distributors related to the Class B shares. During the period January 2,
1998 (date operations commenced) through March 31, 1998, the Class A shares,
Class B shares and Class C shares paid AIM Distributors $7,728, $2,778 and $904,
respectively, as compensation under the Plans.
Under the terms of a master distribution agreement between the Company and the
Fund, AIM Distributors acts as the exclusive distributor of the Fund's shares.
AIM Distributors received commissions of $8,743 from the sales of Class A shares
of the Fund during the period January 2, 1998 (date operations commenced)
through March 31, 1998. Such commissions are not an expense of the Fund. They
are deducted from, and are not included in, the proceeds from sales of Class A
shares. During the period January 2, 1998 (date operations commenced) through
March 31, 1998, AIM Distributors received $3,627 in contingent deferred sales
charges imposed on redemptions of Fund shares. Certain officers and directors of
the Company are officers of AIM, AFS and AIM Distributors.
9
<PAGE> 12
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 period January 2, 1998 (date operations commenced)
through March 31, 1998 was $22,958,019 and $2,392,175, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of March 31, 1998 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 74,075
- --------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (51,098)
- --------------------------------------------------------
Net unrealized appreciation of investment
securities $ 22,977
========================================================
</TABLE>
Investments have the same cost for tax and financial statement purposes.
NOTE 5-CAPITAL STOCK
Changes in capital stock outstanding during the period January 2, 1998 (date
operations commenced) through March 31, 1998 were as follows:
<TABLE>
<CAPTION>
MARCH 31,
1998
-----------------------
SHARES AMOUNT
--------- -----------
<S> <C> <C>
Sold:
Class A 1,830,454 $18,280,746
- ------------------------------------------------------------
Class B 270,282 2,698,095
- ------------------------------------------------------------
Class C 73,780 736,528
- ------------------------------------------------------------
Issued as reinvestment of
dividends:
Class A 7,600 75,970
- ------------------------------------------------------------
Class B 457 4,564
- ------------------------------------------------------------
Class C 152 1,516
- ------------------------------------------------------------
Reacquired:
Class A (58,098) (580,678)
- ------------------------------------------------------------
Class B (460) (4,572)
- ------------------------------------------------------------
Class C - -
- ------------------------------------------------------------
2,124,167 $21,212,169
============================================================
</TABLE>
NOTE 6- FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B and
Class C capital stock outstanding during the period January 2, 1998 (date
operations commenced) through March 31, 1998.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $10.00 $10.00
- ------------------------------------------------------------ ------- ------ ------
Income from investment operations:
Net investment income 0.11 0.09 0.09
- ------------------------------------------------------------ ------- ------ ------
Net gains (losses) on securities (both realized and
unrealized) (0.01) (0.01) (0.01)
- ------------------------------------------------------------ ------- ------ ------
Total from investment operations 0.10 0.08 0.08
- ------------------------------------------------------------ ------- ------ ------
Less distributions:
Dividends from net investment income (0.11) (0.09) (0.09)
- ------------------------------------------------------------ ------- ------ ------
Net asset value, end of period $ 9.99 $ 9.99 $ 9.99
============================================================ ======= ====== ======
Total return(a) 1.04% 0.81% 0.79%
============================================================ ======= ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $17,787 $2,699 $ 738
============================================================ ======= ====== ======
Ratio of expenses to average net assets(b) 0.25%(c) 1.00%(c) 1.00%(c)
============================================================ ======= ====== ======
Ratio of net investment income to average net assets(d) 4.80%(c) 4.05%(c) 4.05%(c)
============================================================ ======= ====== ======
Portfolio turnover rate 21% 21% 21%
============================================================ ======= ====== ======
</TABLE>
(a) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.65% (annualized), 2.44% (annualized) and 2.44% (annualized) for Classes A,
B and C, respectively.
(c) Ratios are annualized and based on average net assets of $12,677,152,
$1,139,458 and $370,817 for Classes A, B and C, respectively.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 3.40% (annualized), 2.61% (annualized) and 2.61%
(annualized) for Classes A, B and C, respectively.
10
<PAGE> 13
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM Tax-Exempt Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of AIM High
Income Municipal Fund (a portfolio of AIM Tax-Exempt Funds, Inc.), including the
schedule of investments, as of March 31, 1998, and the related statement of
operations for the period January 2, 1998 (date operations commenced) through
March 31, 1998, the statement of changes in net assets for the period January 2,
1998 (date operations commenced) through March 31, 1998 and the financial
highlights for the period January 2, 1998 (date operations commenced) through
March 31, 1998. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and the financial highlights. Our procedures included confirmation of
securities owned as of March 31, 1998, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of AIM
High Income Municipal Fund as of March 31, 1998, the results of its operations
for the period January 2, 1998 (date operations commenced) through March 31,
1998, changes in its net assets for the period January 2, 1998 (date operations
commenced) through March 31, 1998 and the financial highlights for the period
January 2, 1998 (date operations commenced) through March 31, 1998, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
May 1, 1998
11
<PAGE> 14
Directors & Officers
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; John J. Arthur A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Carol F. Relihan Houston, TX 77046
Senior Vice President and Secretary
Owen Daly II TRANSFER AGENT
Director Gary T. Crum
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Dana R. Sutton Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer
Director, AEGEON USA; CUSTODIAN
Formerly Vice Chairman and President, Stuart W. Coco
Mercantile-Safe Deposit & Trust Co.; and Vice President The Bank of New York
President, Mercantile Bankshares 90 Washington Street
Melville B. Cox 11th Floor
Jack Fields Vice President New York, NY 10286
Chief Executive Officer
Texana Global, Inc.; Karen Dunn Kelley COUNSEL TO THE FUND
Formerly Member Vice President
of the U.S. House of Representatives Ballard Spahr
Renee A. Bamford Andrews & Ingersoll, LLP
Carl Frischling Assistant Secretary 1735 Market Street
Partner Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel P. Michelle Grace
Assistant Secretary COUNSEL TO THE DIRECTORS
Robert H. Graham
President and Chief Executive Officer Jeffrey H. Kupor Kramer, Levin, Naftalis & Frankel
A I M Management Group Inc. Assistant Secretary 919 Third Avenue
New York, NY 10022
John F. Kroeger Nancy L. Martin
Formerly Consultant Assistant Secretary DISTRIBUTOR
Wendell & Stockel Associates, Inc.
Ofelia M. Mayo A I M Distributors, Inc.
Lewis F. Pennock Assistant Secretary 11 Greenway Plaza
Attorney Suite 100
Lisa A. Moss Houston, TX 77046
Ian W. Robinson Assistant Secretary
Consultant; Formerly Executive AUDITORS
Vice President and Kathleen J. Pflueger
Chief Financial Officer Assistant Secretary KPMG Peat Marwick LLP
Bell Atlantic Management 700 Louisiana
Services, Inc. Samuel D. Sirko Houston, TX 77002
Assistant Secretary
Louis S. Sklar
Executive Vice President Stephen I. Winer
Hines Interests Assistant Secretary
Limited Partnership
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
We are required by Internal Revenue Code to advise you within 60 days of the
Fund's fiscal end as to the federal tax status of dividends paid by the Fund
during the period ended March 31, 1998.
AIM High Income Municipal Fund Class A, Class B and Class C shares paid ordinary
dividends in the amount of $0.1139, $0.0907 and $0.0889 per share, respectively,
to shareholders during the Fund's initial tax year ended March 31, 1998. Of this
amount, 100% qualified as tax-exempt interest dividends for federal income tax
purposes.
For the purpose of preparing your annual federal income tax returns, however,
you should report the amounts as reflected on the appropriate Form 1099-DIV.
<PAGE> 15
-----------------
Current shareholders
can call our
AIM Investor Line at
800-246-5463
for 24-hour-a-day
account information.
-----------------
HOW AIM MAKES INVESTING
EASY FOR YOU
o LOW INITIAL INVESTMENT. You can get your investment program started for as
little as $500. Subsequent investments can be made for only $50.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. Distributions may
be received in cash or reinvested in the Fund free of charge. Over time, the
power of compounding can significantly increase the value of your assets.
o AUTOMATIC INVESTMENT PLAN. You may build your investment by regularly
purchasing additional shares. Pre-authorized checks for $50 or more can be
drafted monthly from your personal checking account.
o EASY ACCESS TO YOUR MONEY. Your shares may be redeemed at net asset value
any day the New York Stock Exchange is open. The price of shares sold may be
more or less than their original cost, depending on market conditions.
o SYSTEMATIC WITHDRAWAL PLAN. You may elect to receive checks of at least $50
monthly or quarterly through a systematic withdrawal plan.
o EXCHANGE PRIVILEGE. As your goals change, you may exchange all or part of
your assets for those of other funds within the same share class of The AIM
Family of Funds --Registered Trademark--. The exchange privilege may be
modified or discontinued for any of the AIM funds.
o RETIREMENT PLANS. You may purchase shares of the fund for your Individual
Retirement Account (IRA) or any other type of retirement plan, and earn
tax-deferred dollars for your retirement.
o TOLL-FREE ACCESS. Current shareholders can call our AIM Investor Line at
800-246-5463 for 24-hours-a-day account information. Or, of course, you may
contact your financial consultant for assistance.
o www.aimfunds.com. As a current shareholder, you can check account balances
24-hours-a-day over the Internet. State-of-the-art encryption lets you send
us questions that include confidential information without the fear of
eavesdropping, tampering, or forgery.
<PAGE> 16
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Asian Growth Fund
AIM Capital Development Fund
AIM Constellation Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
[PHOTO OF GROWTH OF CAPITAL
ELEVEN GREENWAY PLAZA AIM Advisor International Value Fund
APPEARS HERE] AIM Blue Chip Fund
AIM Global Growth Fund
AIM International Equity Fund
AIM Select Growth Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
CURRENT INCOME AND HIGH DEGREE OF SAFETY
A I M Management Group Inc. has provided leadership in the AIM Intermediate Government Fund
mutual fund industry since 1976 and manages approximately AIM Limited Maturity Treasury Fund
$89 billion in assets for more than 3.9 million shareholders, AIM Money Market Fund
including individual investors, corporate clients, and financial AIM Tax-Exempt Cash Fund
institutions as of March 31, 1998. The AIM Family of
Funds--Registered Trademark-- is distributed nationwide, and *AIM Aggressive Growth Fund was closed to new investors on
AIM today ranks among the nation's top 15 mutual fund June 5, 1997. For more complete information about any AIM
companies in assets under management, according to Lipper Fund(s), including sales charges and expenses, ask your
Analytical Services, Inc. financial consultant or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully
before you invest or send money.
INVEST WITH DISCIPLINE-SM-
</TABLE>
