<PAGE> 1
ANNUAL REPORT / MARCH 31 1999
AIM
HIGH INCOME MUNICIPAL FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-----------------------------------------------
OASIS IN THE URBAN JUNGLE
BY JANE WOOSTER SCOTT (1939-, AMERICAN)
ZOOS, AMUSEMENT PARKS AND SIMILAR ATTRACTIONS
CAN BE A STIMULUS TO OTHER PROJECTS IN THE
IMMEDIATE AREA. IN SELECTING SECURITIES
FOR AIM HIGH INCOME MUNICIPAL FUND, WE LOOK
FOR BONDS THAT ARE SUPPORTED WITH REVENUE GENERATED BY
WELL-MANAGED PROJECTS THAT MAKE GOOD ECONOMIC SENSE.
-----------------------------------------------
AIM High Income Municipal Fund is 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 During the fiscal year, the Fund paid distributions for Class A, Class B,
and Class C shares of $0.54, $0.46, and $0.46 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. About indexes
and other performance benchmarks cited in this report:
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Lehman Municipal Bond Index is an unmanaged composite representing an
approximation of the performance of investment-grade municipal bonds.
o The Lipper High Yield Municipal Debt Index represents an average of the
performance of the 30 largest high-yield municipal bond funds.
o Government securities, such as U.S. Treasury bills, notes and bonds, offer
a high degree of safety and are guaranteed as to the timely payment of
principal and interest if held to maturity. Fund shares are not insured,
and their value will vary with market conditions.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE
A PORTION OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the Fund.
AIM HIGH INCOME MUNICIPAL FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
For much of the fiscal year, bond markets were both
[PHOTO OF turbulent and narrow. These conditions stemmed from a
Charles T. succession of economic crises overseas as well as ongoing
Bauer, political debate in the United States. In this environment,
Chairman of investors favored the safest asset classes, particularly
the Board of U.S. Treasury securities, and shunned lower-rated bonds.
THE FUND Toward the end of the year, however, the performance of
APPEARS HERE] bonds other than Treasury issues began to improve as it
became increasingly apparent that robust economic growth in
the United States had been largely unaffected by crises in
developing nations.
Despite volatility in other segments of the
fixed-income market, municipal bonds remained relatively
stable in value during the fiscal year. Supply tended to
match demand, and that kept municipal-bond prices from
fluctuating significantly.
We remain optimistic about the long-term prospects for municipal bonds. As
incomes rise and more Americans become subject to the higher tax brackets,
municipal bonds could become increasingly attractive as an investment option.
And despite considerable political rhetoric about replacing the current federal
tax system with a flat tax or a national sales tax, we believe the prospects
that this will actually occur are remote.
On the pages that follow, your Fund's managers offer more detailed
discussion of how markets behaved, how they managed the portfolio in light of
recent volatility, and what they foresee for markets and your Fund. We hope you
find their discussion informative.
HOW SHOULD INVESTORS RESPOND?
We understood how unnerving recent uncertainty could have been. Of course, our
repeated message to you is to keep a long-term outlook on investments rather
than responding to short-term fluctuations. And we are pleased to note that
most mutual fund shareholders remained cool headed and did not pull out of the
markets. In the end, most were rewarded for their long-term perspective.
In view of recent volatility and the divergent performance of market
sectors, this may be a very good time to meet with your financial consultant to
review your current asset allocation and the diversification of your portfolio.
Broad portfolio diversification remains one of the most fundamental principles
of investing, along with long-term thinking and realistic expectations.
YEAR 2000 CONCERN Many of our shareholders have asked us about AIM's year
2000 readiness status. We appreciate these concerns, and we take the year 2000
issue seriously. AIM has devoted considerable effort to creating a comprehensive
plan for assessing, correcting and testing our in-house systems. We also
participated in an industrywide testing effort in March. But no matter how well
we prepare and test, no one can know for sure what the year 2000 will bring. Our
industry's systems are connected in complex ways to many third parties, and
there may be unforeseen problems when the year 2000 actually arrives. Though we
cannot predict what all these problems might be, we are working with our
business recovery team to develop contingency plans appropriate for a variety of
year 2000 scenarios. We are pleased to send you this report on your Fund's
recent performance. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
AIM Investor Line at 800-246-5463 or at our Web site, www.aimfunds.com. We often
post market updates on our Web site.
We thank you for your continued participation in The AIM Family of Funds
- --Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
-----------------------------
WE REMAIN OPTIMISTIC
ABOUT THE LONG-TERM
PROSPECTS FOR
MUNICIPAL BONDS.
-----------------------------
AIM HIGH INCOME MUNICIPAL FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND PROVIDES SOLID INCOME,
SHARE-PRICE STABILITY
BOND MARKETS WERE VOLATILE DURING THE FISCAL YEAR. HOW DID THE FUND PERFORM?
In the often turbulent market environment, high-yield municipal bonds were an
attractive investment option. These bonds offered yields well above the
annualized inflation rate of 1.6% for the year ended March 31, 1999. And when
the federal-tax-exempt status of these bonds was taken into consideration,
these yields were even more compelling. Moreover, high-yield municipal bonds
were relatively stable in price in the frequently volatile bond market. As a
result, your Fund continued to provide solid current income (see chart below),
exempt from federal taxes, while maintaining relative share-price stability.
Because of increasing earnings capability, the Fund has been able to
increase its dividend every calendar quarter since inception on January 2, 1998.
For the fiscal year ended March 31, 1999, total returns at net asset value
were 6.01% for Class A shares and 5.23% for Class B and C shares-better than the
4.97% total return of the Lipper High Yield Municipal Debt Index for the same
period.
During the fiscal year, net asset value per share remained within a
relatively narrow range of $9.88 to $10.24 for Class A, B and C shares. Net
assets in the Fund more than tripled from $21 million at the outset of the
fiscal year to $66 million at its conclusion.
WHAT WERE SOME OF THE MAJOR DEVELOPMENTS IN THE BOND MARKET DURING THE FISCAL
YEAR?
For much of the fiscal year, the bond market was extremely narrow with
investors favoring U.S. Treasury issues because of their relative safety and
liquidity. Treasury securities soared in price, sending their yields to
historic lows. Other types of bonds, particularly lower-rated issues,
appreciated less dramatically in value or declined in price. Investors flocked
to Treasuries because of uncertain market conditions stemming from severe
economic problems in Asia, Latin America and Russia as well as political
controversy in the U.S. in the summer and fall of 1998.
Toward the end of the fiscal year, however, the narrow market began to give
way to more normal conditions, and the performance of lower-rated bonds started
to improve. Initially, this improvement in performance could be attributed
largely to the actions of the Federal Reserve Board (the Fed), which lowered
interest rates three times in the fall of 1998 to infuse liquidity back into the
market. But early in 1999, evidence emerged that the economy was still growing
at a healthy pace. Market observers speculated that the Fed might now raise
interest rates to slow economic growth and head off inflation.
These concerns caused Treasury prices to plummet in February. At the same
time, lower-rated, higher-yielding bonds became more attractive to investors.
When economic growth is strong, the issuers of higher yielding securities are
better able to meet their debt obligations.
HOW DID MUNICIPAL BONDS FARE?
In the volatile market environment, municipal-bond prices and yields tended to
be relatively stable. For much of the fiscal year, municipal-bond prices were
kept in check by a large increase in new-
ATTRACTIVE INCOME
As of 3/31/99
<TABLE>
<CAPTION>
=============================================================================================
30-DAY TAXABLE 30-DAY
DISTRIBUTION EQUIVALENT SEC YIELD TAXABLE
RATE DISTRIBUTION AT MAXIMUM EQUIVALENT
CLASS AT NAV RATE* OFFERING PRICE 30-DAY SEC YIELD*
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A 5.50% 9.11% 5.42% 8.97%
B 4.75 7.86 4.92 8.15
C 4.75 7.86 4.92 8.15
=============================================================================================
</TABLE>
* Assumes highest marginal federal tax rate of 39.6%
TOTAL RETURNS
For the year ended 3/31/99
<TABLE>
<CAPTION>
==================================================
<S> <C>
CLASS A 6.01%
CLASS B 5.23%
CLASS C 5.23%
LIPPER HIGH YIELD
MUNICIPAL DEBT
INDEX 4.97%
==================================================
</TABLE>
STABILITY OF NAV
1/2/98-3/31/99
<TABLE>
<CAPTION>
==================================================
Class A Shares
- --------------------------------------------------
<S> <C>
1/2/98 10
3/31/98 9.99
6/30/98 10.06
9/30/98 10.2
12/31/98 10.1
3/31/99 10.04
==================================================
</TABLE>
----------------------------------------------------
BECAUSE OF INCREASING EARNINGS CAPABILITY,
THE FUND HAS BEEN ABLE TO INCREASE
ITS DIVIDEND EVERY CALENDAR QUARTER
SINCE INCEPTION ON JANUARY 2, 1998.
----------------------------------------------------
See important Fund and index disclosures inside front cover.
AIM HIGH INCOME MUNICIPAL FUND
2
<PAGE> 5
issue supply. In 1998, more than $284 billion in new municipal debt was issued,
the highest level in five years, according to The Bond Buyer, a newspaper that
tracks the municipal-bond market. State and city governments, school districts
and other entities rushed to issue new municipal bonds to take advantage of the
lowest interest rates in a generation.
While new municipal bonds were flooding the market, the supply of Treasuries
was dwindling in the face of increased demand. A budget surplus allowed the
federal government to cut back on the issuance of Treasuries. Consequently, as
the prices of Treasury issues soared, their yields dropped to the point where
they were comparable to those of municipal bonds--a situation that had not
existed in more than a decade.
However, when Treasury prices fell in February, municipal bonds depreciated
only slightly in value because of strong demand. That caused yield differentials
between Treasuries and municipal bonds to widen and return to their more typical
ranges. Yield spreads between higher- and lower-rated municipal bonds also
widened slightly.
HOW WERE THE FUND'S ASSETS ALLOCATED AT THE END OF THE FISCAL YEAR?
The Fund was well diversified with 112 holdings, distributed across several
market sectors and representing nearly every region of the United States.
Revenue bonds, which are supported with income from various projects, made up
100% of the portfolio. The focus was on bonds for essential service projects,
particularly hospitals, multifamily housing and continuing care retirement
communities. Demand for health care and housing tends to remain constant,
regardless of economic trends. Continuing care retirement communities, which
provide for independent living, assisted living and nursing care for older
adults, are meeting the needs of an aging population.
WHAT WAS THE CREDIT QUALITY OF THE PORTFOLIO?
As of March 31, 1999, the Fund had an average portfolio quality rating
equivalent to BB as measured by Standard & Poor's (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 constituted approximately 9% of the portfolio.
Higher-quality, non-rated securities made up 91% of the Fund's 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.
WHAT IS YOUR OUTLOOK?
At the close of the fiscal year, the market climate appeared favorable for
bonds, including high-yield municipal issues. Inflation was minimal even though
the economy continued to grow at a healthy pace. Because inflation was so low,
the Fed appeared likely to leave monetary policy unchanged for the short-term
at least. If the Fed leaves interest rates unchanged and economic growth
remains healthy, it could prove beneficial for bonds, particularly high-yield
municipal securities.
PORTFOLIO COMPOSITION
As of March 31, 1999, based on total net assets
TOP FIVE BOND HOLDINGS
<TABLE>
<CAPTION>
==================================================
COUPON MATURITY %
- --------------------------------------------------
<S> <C> <C> <C>
1. West Jefferson 6.375% 02/01/29 3.03
Amusement &
Public Park
Authority
2. Ohio (State of) 8.50% 08/01/22 2.92
3. Onondaga 7.00% 11/01/30 2.35
(County of)
Industrial
Development
Agency
4. Orange 6.40% 07/01/32 2.28
(County of)
Housing Finance
Authority
5. Garden City 5.75% 09/01/17 2.22
Hospital Finance
Authority
==================================================
</TABLE>
CREDIT RATING OF HOLDINGS
As of March 31, 1999, based on total
portfolio composition
AAA 0.24%
AA 0.07%
A 1.75%
BBB 2.97%
BB 4.03%
NOT RATED 90.94%
<TABLE>
<CAPTION>
===================================================
<S> <C>
REVENUE BONDS 100%
NUMBER OF HOLDINGS 112
AVERAGE MATURITY 25.28 Years
DURATION 10.29 Years
===================================================
</TABLE>
Please keep in mind that 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.
AIM HIGH INCOME MUNICIPAL FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM HIGH INCOME MUNICIPAL FUND VS. BENCHMARK INDEX
1/2/98-3/31/99
In thousands
<TABLE>
<CAPTION>
==============================================================================================
Lehman
AIM High Income AIM High Income AIM High Income Municipal Bond
Municipal Fund-A Municipal Fund-B Municipal Fund-C Index
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/2/98 9524. 10000 10000 10103.1
1/31/98 9557. 10024 10022 10103.1
2/28/98 9591. 10043 10052 10106.2
3/31/98 9623. 10081 10079 10115.2
4/30/98 9607. 10048 10056 10069.5
5/31/98 9746. 10187 10186 10228.8
6/30/98 9818. 10256 10254 10269.2
7/31/98 9822. 10265 10263 10294.9
8/31/98 9983. 10416 10415 10454.0
9/30/98 10086 10528 10526 10584.3
10/31/98 10072 10496 10494 10584.1
11/30/98 10107 10526 10524 10621.1
12/31/98 10123 10536 10534 10647.9
1/31/99 10189 10598 10596 10774.5
2/28/99 10145 10556 10554 10727.6
3/31/99 10204 10208 10606 10742.3
==============================================================================================
</TABLE>
Past performance is no guarantee of comparable future results.
<TABLE>
<CAPTION>
==============================================
AVERAGE ANNUAL TOTAL RETURNS
As of 3/31/99, including sales charges
<S> <C>
CLASS A SHARES
Inception (1/2/98) 1.62%
1 year .96*
*6.01% excluding sales charge
CLASS B SHARES
Inception (1/2/98) 1.67%
1 Year 0.23**
**5.23% excluding CDSC
CLASS C SHARES
Inception (1/2/98) 4.86%
1 Year 4.23***
***5.23% excluding CDSC
==============================================
</TABLE>
Sources: Towers Data Systems HYPO--Registered Trademark--, Morgan Stanley
Capital International. The performance of Class B and Class C shares will differ
from that of Class A shares due to differing fees and expenses. For Fund
performance calculations and descriptions of indexes cited on this page, please
refer to the inside front cover. Past performance cannot guarantee comparable
future results.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF
AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
About This Chart
The chart compares your Fund to a benchmark index. It is intended to give you a
general idea of how your Fund performed compared to the bond market over the
period 1/2/98-3/31/99. Index performance is from 12/31/97. It is important to
understand the difference between your Fund and an index. Fund performance
shown in the chart includes Fund expenses and management fees. Class A share
performance reflects deduction of the maximum sales charge; Class B and Class C
share performance reflects deduction of the applicable contingent deferred
sales charge. An index measures the performance of a hypothetical portfolio,
in this case the Lehman Municipal Bond Index. Market indexes are not managed,
incurring no sales charges, expenses, or fees. If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return.
AIM HIGH INCOME MUNICIPAL FUND
4
<PAGE> 7
ANNUAL REPORT / FOR CONSIDERATION
WHAT DO BOND RATINGS MEAN?
The preceding discussion of your Fund's performance mentions the quality of the
bonds in the Fund's portfolio. Just what are bond quality ratings?
Two well-known rating agencies, Moody's and Standard & Poor's (S&P), assign
ratings to bond issues. The chart shows a summary of the definitions of these
ratings.
HOW BONDS ARE RATED
Bond ratings are essentially based on the issuer's risk of default, or
nonpayment of principal and/or interest, on the bond. How does a bond rating
come about? Say a company wants to raise $5 million for expansion by issuing a
five-year bond, meaning that in five years' time, the company will repay $5
million plus interest to the investor(s) in the bond issue. The company, or
issuer, pays a fee to have its bond rated by a qualified rating agency. The
selected rating agency sends representatives to the company to meet with
management and evaluate the company's short- and long-term risk profile--the
company's ability and willingness to pay the principal and interest of the bond
issue at its maturity, in this case five years. Other rating factors include:
o the make-up and terms of the particular issue;
o the level and predictability of the issuer's cash flow;
o how well-protected the issue is in the event of bankruptcy, reorganization
or other arrangement;
o possible adverse economic conditions both in general and in the company's
sector; and
o currency risk in the case of foreign issues.
After considering these and any other factors deemed necessary by agency
representatives, the rating agency assigns a rating, such as "A," to the issue.
The rating is made public before the issue is offered to investors so that
investors know the relative quality of the bond. Investors can then decide for
themselves
<TABLE>
<CAPTION>
===================================================================================
MOODY'S DEFINITION S&P
INVESTMENT GRADE
- -----------------------------------------------------------------------------------
<S> <C> <C>
Aaa Bonds of the highest quality, with the lowest AAA
degree of long-term investment risk. Issuers'
ability to repay is very high.
Aa Bonds of high quality with slightly greater AA
long-term investment risk.
A Bonds with favorable investment attributes A
but elements making them more susceptible to adversity.
Baa Medium-grade bonds that are currently secure BBB
but may be unreliable over time.
NON-INVESTMENT GRADE
(High-Yield or Junk)
Ba Bonds with speculative elements that make them BB
not well safeguarded and uncertain.
B Bonds with low long-term assurance of payment. B
Caa Bonds of poor standing that may be in default CCC
or in danger of default.
Ca Bonds of highly speculative quality that are often CC
in default.
C Lowest rated bonds with poor prospects of ever being C
upgraded to investment standing.
- - Bonds in default. Issuer cannot repay. D
===================================================================================
</TABLE>
AIM HIGH INCOME MUNICIPAL FUND
5
<PAGE> 8
ANNUAL REPORT / FOR CONSIDERATION
if they wish to invest in a particular bond issue.
WHAT BOND RATINGS MEAN
Although the rating systems of the two agencies differ slightly, their
hierarchy is essentially the same: the highest rated bonds, Aaa for Moody's and
AAA for S&P, are those which show the best capacity for repayment of the
principal (face value) plus interest to the bondholder. These high-rated bonds
have a lower return because they are a lower-risk investment. In other words,
rating and risk and return move conversely for bonds--the lower the rating, the
higher the potential risk and return, and vice versa. So although investment
grade bonds such as U.S. Treasury issues are one of the safest investments
around, more speculative junk bonds can yield significantly higher returns if
an investor can tolerate the risk.
Moody's and S&P sometimes use modifiers along with their standard ratings.
Moody's may add a 1, 2 or 3 to a rating (e.g., Aa2), with a 1 denoting an issue
ranking in the higher end of its category, a 2 denoting a mid-range ranking, and
a 3 denoting a lower-end ranking. Similarly, S&P may add a plus (+) or minus (-)
to show an issue's relative standing within a category (e.g., B+).
Once assigned, bond ratings are not often altered. However, if major changes
occur in an issuer's short- or long-term credit outlook, a rating agency may
review the rating for possible modification. Contributing factors may include
shifts in industry demand, new technologies, government intervention, regulatory
changes, or changes in macroeconomic variables such as oil prices. Events such
as these are weighed to determine how much they will affect the issuer's
operations and future direction.
UNRATED BONDS
What about unrated bonds? Just because a bond is unrated does not mean it is a
"bad" bond. Some organizations simply choose not to pay to have their bonds
rated. Often the issuer of an unrated bond is a small entity such as a town or
district that does not have extra money to pay for a rating. In those cases,
independent research is necessary on the part of the investor to put together a
risk profile of the issuer.
WHAT TYPES OF BONDS DOES YOUR FUND OWN?
YOUR FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION DISCUSS IN MORE
DETAIL THE TYPES OF BONDS CONTAINED IN YOUR FUND'S PORTFOLIO AND RISK FACTORS
THAT MAY BE ASSOCIATED WITH THESE SECURITIES. YOUR FINANCIAL CONSULTANT IS THE
BEST PERSON TO CONTACT IF YOU HAVE ANY QUESTIONS ABOUT INVESTING IN BONDS OR A
BOND FUND.
[PICTURE TO ILLUSTRATE BONDS]
AIM HIGH INCOME MUNICIPAL BOND FUND
6
<PAGE> 9
SCHEDULE OF INVESTMENTS
March 31, 1999
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL OBLIGATIONS-96.19%
ALABAMA-3.03%
West Jefferson Amusement & Public Parks
Authority (Visionland Project); First
Mortgage RB
6.375%, 02/01/29 $2,000 $ 2,011,579
- -------------------------------------------------------------
COLORADO-2.36%
Colorado Health Facilities Authority
(Volunteers of America); Refunding
and Improvement Series A RB
5.875%, 07/01/28 750 735,547
- -------------------------------------------------------------
Colorado Health Facilities Authority
(Volunteers of America); Health and
Residential Care Facilities Series A
RB
6.00%, 07/01/29 850 832,260
- -------------------------------------------------------------
1,567,807
- -------------------------------------------------------------
CONNECTICUT-2.73%
Connecticut (State of) Development
Authority (Lutheran Home Southbury);
First Mortgage Health Care Refunding
Series A RB
6.00%, 12/01/15 750 746,879
- -------------------------------------------------------------
Connecticut (State of) Development
Authority (Watson Foods Co., Inc.
Project); IDR
5.90%, 06/01/28(a) 1,075 1,068,678
- -------------------------------------------------------------
1,815,557
- -------------------------------------------------------------
FLORIDA-3.74%
Orange (County of) Housing Finance
Authority (Brentwood Park
Apartments); Multifamily Housing
Series G RB
6.40%, 07/01/32 1,500 1,514,144
- -------------------------------------------------------------
Sumter (County of) Industrial
Development Authority (Wecare Nursing
Center Project); Health Care
Facilities Series A RB
6.75%, 04/01/29 1,000 971,259
- -------------------------------------------------------------
2,485,403
- -------------------------------------------------------------
GEORGIA-5.00%
Forsyth (County of) Hospital Authority
(Georgia Baptist Health Care System
Project); Anticipation Certificates
6.375%, 10/01/28 1,000 984,969
- -------------------------------------------------------------
Fulton (County of) Housing Authority
(Azalea Manor Project); Multifamily
Housing RB
6.50%, 02/01/28 780 789,586
- -------------------------------------------------------------
Fulton (County of) Housing Authority
(Washington Court Project);
Multifamily Housing RB
6.40%, 02/01/19 775 788,237
- -------------------------------------------------------------
6.50%, 02/01/28 225 228,823
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
GEORGIA-(CONTINUED)
Rockdale (County of) Development
Authority (Visy Paper, Inc. Project);
Solid Waste Disposal RB
7.50%, 01/01/26(a) $ 500 $ 530,345
- -------------------------------------------------------------
3,321,960
- -------------------------------------------------------------
HAWAII-0.74%
Hawaii (State of) Department of
Transportation (Continental Airlines,
Inc.); Special Facilities RB
5.625%, 11/15/27(a) 500 490,555
- -------------------------------------------------------------
ILLINOIS-7.46%
Chicago (City of) O'Hare International
Airport (United Airlines Project);
Special Facilities Series A RB
5.35%, 09/01/16 1,350 1,344,641
- -------------------------------------------------------------
Clay (County of); Hospital RB
5.70%, 12/01/18 500 491,830
- -------------------------------------------------------------
Crestwood (City of); Tax Increment
Revenue Refunding Non-Qualified Bonds
7.25%, 12/01/08 100 107,053
- -------------------------------------------------------------
Godfrey (City of) (United Methodist
Village); Series A RB
5.875%, 11/15/29 1,000 959,540
- -------------------------------------------------------------
Illinois Health Facilities Authority
(Bohemian-Tabor Hills); Refunding
Series B RB
5.90%, 11/15/24 775 776,201
- -------------------------------------------------------------
Illinois Health Facilities Authority
(Lifelink Corp. Obligation Group);
Refunding RB
5.85%, 02/15/20 350 349,762
- -------------------------------------------------------------
5.70%, 02/15/24 850 823,599
- -------------------------------------------------------------
Saint Charles (City of) (Tri-city
Center Associates Limited Project);
IDR
7.50%, 11/01/13 100 104,925
- -------------------------------------------------------------
4,957,551
- -------------------------------------------------------------
INDIANA-1.61%
Goshen (Greencroft Obligation Group);
RB
5.75%, 08/15/28 350 335,860
- -------------------------------------------------------------
Indiana Health Facilities Financing
Authority (Franciscan Eldercare
Community Services); RB
5.875%, 05/15/29 750 732,863
- -------------------------------------------------------------
1,068,723
- -------------------------------------------------------------
IOWA-2.31%
Harlan (City of) (American Baptist
Homes Project); RB
5.75%, 05/15/28 750 728,798
- -------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
IOWA-(CONTINUED)
Iowa Finance Authority (Park West
Housing Project); Multifamily
Refunding RB
8.00%, 10/01/23 $ 100 $ 103,648
- -------------------------------------------------------------
Iowa Finance Authority Community
Rehabilitation Providers (Lutheran
Children's Home Society-Bremwood
Project); RB
5.80%, 12/01/24 700 700,238
- -------------------------------------------------------------
1,532,684
- -------------------------------------------------------------
KANSAS-0.86%
Atchison (City of) (Atchison Hospital
Association); Hospital RB
5.70%, 11/15/18 525 525,347
- -------------------------------------------------------------
Lawrence (City of) (Holiday Inn
Project); Commercial Development
Senior Refunding Series A RB
8.00%, 07/01/16 40 44,012
- -------------------------------------------------------------
569,359
- -------------------------------------------------------------
MARYLAND-0.30%
Fredrick (County of) Retirement
Community (Buckingham's Choice Inc.
Facility); Series A RB
5.90%, 01/01/17 200 199,978
- -------------------------------------------------------------
MASSACHUSETTS-1.77%
Boston (City of) Industrial Development
Financing Authority (Springhouse Inc
Project); First Mortgage Refunding RB
6.00%, 07/01/28 500 501,975
- -------------------------------------------------------------
Massachusetts (State of) Health &
Educational Facilities Authority
(Caritas Christian Obligation Group);
Series A RB
5.625%, 07/01/20 680 675,356
- -------------------------------------------------------------
1,177,331
- -------------------------------------------------------------
MICHIGAN-4.20%
Garden City Hospital Finance Authority
(Garden City Hospital OB Group);
Hospital Refunding Series A RB
5.75%, 09/01/17 1,500 1,475,670
- -------------------------------------------------------------
Gogebic (County of) Hospital Finance
Authority (Grand View Health System
Inc.); Refunding RB
5.875%, 10/01/16 920 908,629
- -------------------------------------------------------------
Michigan (State of) Strategic Fund
Limited Obligation (Holland Home
Project); RB
5.75%, 11/15/28 415 404,036
- -------------------------------------------------------------
2,788,335
- -------------------------------------------------------------
MINNESOTA-8.69%
Andover (City of) (Presbyterian Homes
Inc. Project); Elderly Housing RB
6.25%, 12/01/27 500 504,770
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MINNESOTA-(CONTINUED)
Bloomington (City of) Housing and
Redevelopment Authority (Summerhouse
Bloomington Project); Senior Housing
RB
6.00%, 11/01/16 $ 790 $ 788,934
- -------------------------------------------------------------
Columbia Heights (City of) Multifamily
and Health Care Facility (Crest View
Corp. Project); RB
6.00%, 03/01/33 500 506,510
- -------------------------------------------------------------
Duluth (City of) Economic Development
Authority (BSM Properties Inc
Project); Health Care Facilities
Series A RB
5.875%, 12/01/28 500 498,560
- -------------------------------------------------------------
Minneapolis (City of) (Walker Methodist
Senior Services); Series A RB
6.00%, 11/15/28 1,000 1,009,080
- -------------------------------------------------------------
Minneapolis (City of) Health Care
Facility (Ebenezer Society Project);
Series A RB
7.00%, 07/01/12 100 103,923
- -------------------------------------------------------------
Moorhead (City of) Economic Development
Authority (Eventide Housing
Development Project); Multifamily
Refunding Series A RB
6.00%, 06/01/18 500 505,850
- -------------------------------------------------------------
New Hope Housing & Health Care
Facilities (Minnesota Masonic Home
North Ridge); Health Care Facilities
RB
5.875%, 03/01/29 1,040 1,026,095
- -------------------------------------------------------------
Northfield (City of) Health Care
Facilities (Retirement Center);
Refunding and Improvement Series A RB
5.75%, 05/01/16 335 331,215
- -------------------------------------------------------------
6.00%, 05/01/28 500 500,220
- -------------------------------------------------------------
5,775,157
- -------------------------------------------------------------
MISSISSIPPI-0.41%
Ridgeland Urban Renewal (The Orchard
Limited Project); Refunding Series A
RB
7.75%, 12/01/15 250 270,308
- -------------------------------------------------------------
MISSOURI-4.46%
Bolivar (City of) Industrial
Development Authority (Citizens
Memorial Health Care Foundation);
Refunding and Improvement RB
5.75%, 07/01/17 500 491,910
- -------------------------------------------------------------
Good Shepherd Nursing Home District;
Nursing Home Facilities Refunding RB
5.90%, 08/15/23 500 500,165
- -------------------------------------------------------------
Madison (County of); Hospital Refunding
RB
5.875%, 10/01/26 500 497,635
- -------------------------------------------------------------
Springfield (City of) Industrial
Development Authority (Bethesda
Living Centers); Refunding Series A
RB
5.625%, 08/15/18 200 195,830
- -------------------------------------------------------------
5.70%, 08/15/28 800 782,648
- -------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MISSOURI-(CONTINUED)
Valley Park Industrial Development
Authority (Cape Albeon Project);
Senior Housing RB
6.15%, 12/01/33 $ 500 $ 495,695
- -------------------------------------------------------------
2,963,883
- -------------------------------------------------------------
NEVADA-3.72%
Boulder (City of) (Boulder City
Hospital Inc. Project); Refunding
Hospital RB
5.85%, 01/01/22 1,500 1,466,100
- -------------------------------------------------------------
Clark (County of) (Nevada Power Co.
Project); Refunding IDR
Series C 5.50%, 10/01/30 500 496,295
- -------------------------------------------------------------
Series B 5.90%, 10/01/30(a) 500 510,710
- -------------------------------------------------------------
2,473,105
- -------------------------------------------------------------
NEW HAMPSHIRE-0.59%
New Hampshire Higher Educational and
Health Facilities Authority (Daniel
Webster College); RB
7.625%, 07/01/16 100 109,128
- -------------------------------------------------------------
New Hampshire Higher Educational and
Health Facilities Authority (Franklin
Pierce College); RB
6.00%, 10/01/18 30 30,186
- -------------------------------------------------------------
New Hampshire Higher Educational and
Health Facilities Authority
(Monadnock Community Hospital);
Hospital RB
5.70%, 10/01/20 250 251,960
- -------------------------------------------------------------
391,274
- -------------------------------------------------------------
NEW JERSEY-1.51%
New Jersey Economic Development
Authority (Franciscan Oaks Project);
First Mortgage RB
5.75%, 10/01/23 500 505,280
- -------------------------------------------------------------
New Jersey Economic Development
Authority (Keswick Pines Inc.); First
Mortgage Refunding RB
5.75%, 01/01/24 500 499,490
- -------------------------------------------------------------
1,004,770
- -------------------------------------------------------------
NEW MEXICO-0.73%
Sante Fe (County of) (El Castillo
Retirement Project); Series A RB
5.625%, 05/15/25 500 484,670
- -------------------------------------------------------------
NEW YORK-4.59%
New York Industrial Development Agency
(Field Hotel Associates LP);
Refunding IDR
5.80%, 11/01/13 475 476,601
- -------------------------------------------------------------
6.00%, 11/01/28 500 502,080
- -------------------------------------------------------------
New York Industrial Development Agency
(Marymount Manhattan College
Project); Civic Facility RB
7.00%, 07/01/23 150 160,289
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
NEW YORK-(CONTINUED)
Onondaga (County of) Industrial
Development Agency (Solvay Paperboard
LLC Project); Solid Waste Disposal
Facility Refunding RB
7.00%, 11/01/30(a) $1,500 $ 1,562,250
- -------------------------------------------------------------
Suffolk (County of) Industrial
Development Agency (Spellman High
Voltage Facility); Series A IDR
6.375%, 12/01/17(a) 350 350,123
- -------------------------------------------------------------
3,051,343
- -------------------------------------------------------------
NORTH CAROLINA-3.09%
Charlotte (City of) (Charlotte/Douglas
International Airport); Refunding
Special Facilities RB
5.60%, 07/01/27(a) 755 752,803
- -------------------------------------------------------------
North Carolina Medical Care Community
Health Care Facilities (Deerfield
Episcopal Retirement); First Mortgage
Series RB
6.00%, 11/01/19 300 303,450
- -------------------------------------------------------------
North Carolina Medical Care Community
Health Care Facilities (Glenaire
Project); First Mortgage Series RB
5.75%, 07/01/19 500 493,770
- -------------------------------------------------------------
5.85%, 07/01/27 500 499,535
- -------------------------------------------------------------
2,049,558
- -------------------------------------------------------------
NORTH DAKOTA-0.77%
Grand Forks Senior Housing (4000 Valley
Square Project); Special Term Series
RB
6.375%, 12/01/34 500 513,495
- -------------------------------------------------------------
OHIO-7.32%
Belmont (County of) Health Systems
(East Ohio Regional Hospital);
Refunding and Improvement RB
5.80%, 01/01/18 800 778,544
- -------------------------------------------------------------
Fairfield (City of) Economic
Development (Beverly Enterprises
Project); Refunding Series RB
8.50%, 01/01/03 150 159,684
- -------------------------------------------------------------
Madison (County of) (Madison County
Hospital Project); Hospital
Improvement Refunding RB
6.25%, 08/01/18 1,000 994,350
- -------------------------------------------------------------
6.40%, 08/01/28 1,000 993,340
- -------------------------------------------------------------
Ohio (State of) (CSC Limited Project);
Solid Waste RB
8.50%, 08/01/22(a) 1,860 1,938,157
- -------------------------------------------------------------
4,864,075
- -------------------------------------------------------------
OREGON-0.80%
Clackamas (County of) Hospital
Facilities Authority (Odd Fellows
Home); Refunding Series A RB
5.875%, 09/15/21 540 534,076
- -------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
PENNSYLVANIA-8.80%
Allegheny (County of) Hospital
Development Authority (Villa St.
Joseph of Baden); Health Care
Facilities RB
6.00%, 08/15/28 $1,000 $ 980,970
- -------------------------------------------------------------
Allegheny (County of) Industrial
Development Authority (USX Corp.);
Refunding Environmental Improvement
RB
5.60%, 09/01/30 500 499,235
- -------------------------------------------------------------
Berks (County of) Municipal Authority
(Phoebe-Devitt Homes Project);
Refunding Series A1 RB
5.50%, 05/15/11 250 249,998
- -------------------------------------------------------------
5.75%, 05/15/22 500 488,715
- -------------------------------------------------------------
Cumberland (County of) Industrial
Development Authority (Woods Cedar
Run); First Mortgage Refunding Series
A RB
6.50%, 11/01/18 1,000 990,110
- -------------------------------------------------------------
Dauphin (County of) General Authority
(Hyatt Regency Hotel and Conference
Center); RB
6.20%, 01/01/29 1,000 991,830
- -------------------------------------------------------------
Doylestown Hospital Authority (Pine Run
Retirement Hospital); Hospital Series
A RB
7.20%, 07/01/03(b)(c) 150 171,170
- -------------------------------------------------------------
Philadelphia (City of) Authority for
Industrial Development (Paul's Run
Retirement Community); Health Care
Facilities Series A RB
5.875%, 05/15/28 500 490,395
- -------------------------------------------------------------
Philadelphia (City of) Hospital &
Higher Education Facilities Authority
(Chestnut Hill College); RB
6.00%, 10/01/29 500 498,265
- -------------------------------------------------------------
Somerset (County of) Hospital Authority
(Allegheny Christian Ministries);
Senior Mortgage RB
5.70%, 11/15/22 500 484,830
- -------------------------------------------------------------
5,845,518
- -------------------------------------------------------------
TENNESSEE-1.39%
Nashville and Davidson (County of)
Health and Educational Facilities
Board of Metro Government (Blakeford
at Green Hills); Refunding RB
5.65%, 07/01/16 355 350,729
- -------------------------------------------------------------
5.65%, 07/01/24 590 572,583
- -------------------------------------------------------------
923,312
- -------------------------------------------------------------
TEXAS-6.96%
Abilene (City of) Health Facilities
Development (Sears Methodist
Retirement); Corporate Retirement
Facilities RB
5.875%, Series A 11/15/18 1,000 973,820
- -------------------------------------------------------------
5.875%, 11/15/18 450 440,991
- -------------------------------------------------------------
6.000%, 11/15/29 550 543,120
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
TEXAS-(CONTINUED)
Austin (City of) (Bergstrom Landhost
Enterprises Inc.; Airport Hotel);
Series A Senior RB
6.75%, 04/01/27 $1,000 $ 1,010,010
- -------------------------------------------------------------
Bexar (County of) Housing Finance Corp.
(Villa Madrid/Cumberland Apartments);
Multifamily Housing Series A RB
7.25%, 05/01/16 200 210,894
- -------------------------------------------------------------
7.50%, 05/01/28 415 437,323
- -------------------------------------------------------------
Meadow Parc Development Inc. (Meadow
Parc Apartments Project); Multifamily
Housing RB
6.50%, 12/01/30 1,000 1,004,150
- -------------------------------------------------------------
4,620,308
- -------------------------------------------------------------
VIRGINIA-0.76%
Hampton (City of) Redevelopment and
Housing Authority (Olde Hampton Hotel
Association); First Mortgage
Refunding Series A RB
6.50%, 07/01/16 500 505,740
- -------------------------------------------------------------
WEST VIRGINIA-0.75%
Braxton (County of) (Weyerhaeuser Co.
Project); Refunding Solid Waste
Disposal RB
5.40%, 05/01/25(a) 500 497,690
- -------------------------------------------------------------
WISCONSIN-4.74%
Wisconsin (State of) Health and
Educational Facilities Authority
(Attic Angel Community Inc.); RB
5.75%, 11/15/27 1,000 954,120
- -------------------------------------------------------------
Wisconsin (State of) Health and
Educational Facilities Authority
(Beaver Dam Community Hospitals
Inc.); RB
5.80%, 08/15/28 1,000 964,710
- -------------------------------------------------------------
Wisconsin (State of) Health and
Educational Facilities Authority
(Clement Manor, Inc.); Refunding RB
5.75%, 08/15/24 250 237,063
- -------------------------------------------------------------
Wisconsin (State of) Health and
Educational Facilities Authority (St.
Camillus Health Center); RB
5.75%, 07/01/28 500 480,750
- -------------------------------------------------------------
Wisconsin (State of) Health and
Educational Facilities Authority
(United Lutheran Home); RB
5.70%, 03/01/28 525 511,550
- -------------------------------------------------------------
3,148,193
- -------------------------------------------------------------
Long-Term Municipal Obligations
(Cost $63,853,234) 63,903,297
- -------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATIONS-1.36%(d)
ALASKA-0.08%
Alaska (State of) Housing Finance
Corp.; Variable Rate Demand Series A
RB
2.95%, 06/01/26 52 52,000
- -------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
CONNECTICUT-0.18%
Connecticut (State of); Special Tax
Obligation Variable Rate Demand RB
2.90%, 12/01/10 $ 53 $ 53,000
- -------------------------------------------------------------
Connecticut (State of) Development
Authority (Independent Living
Project); Health Care Variable Rate
Demand RB
2.80%, 07/01/15 66 66,000
- -------------------------------------------------------------
119,000
- -------------------------------------------------------------
DELAWARE-0.07%
University of Delaware; Variable Rate
Demand RB
3.00%, 11/23/23 45 45,000
- -------------------------------------------------------------
FLORIDA-0.23%
Lee (County of) Housing Finance
Authority (Forestwood Apartments
Project); Multifamily Housing
Variable Rate Demand RB
2.90%, 06/15/25 155 155,000
- -------------------------------------------------------------
GEORGIA-0.01%
De Kalb Private Hospital Authority
(Egleston Children's Hospital);
Variable Rate Demand Series A
Anticipation Certificates
2.90%, 03/01/24 7 7,000
- -------------------------------------------------------------
ILLINOIS-0.02%
Illinois Development Finance Authority
(American College Surgeons); Variable
Rate Demand RB
3.10%, 08/01/26 2 2,000
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
ILLINOIS-(CONTINUED)
Illinois Health Facilities Authority;
Revolving Pooled Fund Variable Rate
Demand Series D
2.95%, 08/01/15 $ 13 $ 13,000
- -------------------------------------------------------------
15,000
- -------------------------------------------------------------
PENNSYLVANIA-0.12%
York General Authority (Investing
Agreement with Societe Generale);
Pooled Financing Variable Rate Demand
RB
3.10%, 09/01/26 84 84,000
- -------------------------------------------------------------
TEXAS-0.65%
Bexar (County of) Housing Finance
Authority (Fountainhead Apartments);
Multifamily Refunding Variable Rate
Demand RB
3.00%, 09/15/26 431 431,000
- -------------------------------------------------------------
Short-Term Municipal Obligations
(Cost $908,000) 908,000
- -------------------------------------------------------------
TOTAL INVESTMENTS-97.55% (Cost
$64,761,234) 64,811,297
- -------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-2.45% 1,625,366
- -------------------------------------------------------------
NET ASSETS-100.00% $66,436,663
=============================================================
</TABLE>
Investment Abbreviations:
IDR - Industrial Development Revenue Bonds
RB - Revenue Bonds
Notes to Schedule of Investments:
(a)Security subject to the alternative minimum tax.
(b)Secured by an escrow fund of U.S. Treasury obligations.
(c)Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(d)Demand securities; 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 03/31/99.
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$64,761,234) $ 64,811,297
- ---------------------------------------------------------
Cash 880
- ---------------------------------------------------------
Receivables for:
Investments sold 497,833
- ---------------------------------------------------------
Capital stock sold 240,386
- ---------------------------------------------------------
Interest 1,028,907
- ---------------------------------------------------------
Investment for deferred compensation
plan 3,756
- ---------------------------------------------------------
Other assets 37,920
- ---------------------------------------------------------
Total assets 66,620,979
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Capital stock reacquired 12,530
- ---------------------------------------------------------
Dividends 112,583
- ---------------------------------------------------------
Deferred compensation plan 3,756
- ---------------------------------------------------------
Accrued administrative services fees 6,165
- ---------------------------------------------------------
Accrued directors' fees 2,948
- ---------------------------------------------------------
Accrued distribution fees 44,093
- ---------------------------------------------------------
Accrued operating expenses 2,241
- ---------------------------------------------------------
Total liabilities 184,316
- ---------------------------------------------------------
Net assets applicable to shares
outstanding $ 66,436,663
=========================================================
NET ASSETS:
Class A $ 49,569,511
=========================================================
Class B $ 13,850,306
=========================================================
Class C $ 3,016,846
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER
SHARE:
Class A:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 4,935,179
=========================================================
Class B:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 1,379,835
=========================================================
Class C:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 300,552
=========================================================
Class A:
Net asset value and redemption price per
share $ 10.04
=========================================================
Offering price per share:
(Net asset value of $10.04
divided by 95.25%) $ 10.54
=========================================================
Class B:
Net asset value and offering price per
share $ 10.04
=========================================================
Class C:
Net asset value and offering price per
share $ 10.04
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 2,585,785
- --------------------------------------------------------
EXPENSES:
Advisory fees 272,006
- --------------------------------------------------------
Administrative services fees 69,125
- --------------------------------------------------------
Distribution fees -- Class A 90,468
- --------------------------------------------------------
Distribution fees -- Class B 74,401
- --------------------------------------------------------
Distribution fees -- Class C 17,071
- --------------------------------------------------------
Transfer agent fees 15,381
- --------------------------------------------------------
Registration and filing fees 44,983
- --------------------------------------------------------
Other 73,487
- --------------------------------------------------------
Total expenses 656,922
- --------------------------------------------------------
Less: Fee waivers and expense
reimbursements (456,945)
- --------------------------------------------------------
Expenses paid indirectly (532)
- --------------------------------------------------------
Net expenses 199,445
- --------------------------------------------------------
Net investment income 2,386,340
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES:
Net realized gain on sales of investment
securities 634
- --------------------------------------------------------
Net unrealized appreciation of investment
securities 27,086
- --------------------------------------------------------
Net gain on investment securities 27,720
- --------------------------------------------------------
Net increase in net assets resulting from
operations $ 2,414,060
========================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999 AND THE PERIOD JANUARY 2, 1998 (DATE
OPERATIONS COMMENCED) THROUGH MARCH 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,386,340 $ 163,175
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities 634 (12,029)
- -----------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 27,086 22,977
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,414,060 174,123
- -----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Class A (1,942,603) (147,248)
- -----------------------------------------------------------------------------------------
Class B (343,532) (10,991)
- -----------------------------------------------------------------------------------------
Class C (78,427) (3,590)
- -----------------------------------------------------------------------------------------
Net increase from capital stock transactions:
Class A 31,696,998 17,776,038
- -----------------------------------------------------------------------------------------
Class B 11,184,663 2,698,087
- -----------------------------------------------------------------------------------------
Class C 2,281,041 738,044
- -----------------------------------------------------------------------------------------
Net increase in net assets 45,212,200 21,224,463
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 21,224,463 --
- -----------------------------------------------------------------------------------------
End of period $66,436,663 $21,224,463
=========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $66,355,245 $21,212,169
- -----------------------------------------------------------------------------------------
Undistributed net investment income 42,750 1,346
- -----------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (11,395) (12,029)
- -----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 50,063 22,977
- -----------------------------------------------------------------------------------------
$66,436,663 $21,224,463
=========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
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. 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
questionable are valued at fair value as determined in good faith by or under
the supervision of the Company's officers in a
13
<PAGE> 16
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 97.94% 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. On March 31, 1999,
paid in capital was decreased by $19,626 and undistributed net income was
increased by $19,626 in order to comply with the requirements of the American
Institute of Certified Public Accountants Statement of Position 93-2. Net
assets of the fund were unaffected by the reclassifications discussed above.
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. The Fund has a
capital loss carryforward of $11,395 (which may be carried forward to offset
future taxable capital gains, if any) which expires, if not previously
utilized, through the year 2007.
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 year ended March 31, 1999, AIM waived
advisory fees and reimbursed expenses of $456,945.
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 year ended March 31, 1999, the Fund reimbursed
AIM $69,125 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 year ended March 31, 1999, the Fund
paid AFS $8,935 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 of 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. During the year ended March 31, 1999, the Class A shares, Class B
shares and Class C shares paid AIM Distributors $90,468, $74,401 and $17,071,
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 $42,929 from the sales of Class A
shares of the Fund during the year ended March 31, 1999. 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 year ended March 31, 1999, AIM
Distributors received $13,087 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.
During the year ended March 31, 1999, the Fund paid legal fees of $3,426 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-INDIRECT EXPENSES
For the year ended March 31, 1999, the Fund received reductions in transfer
agency fees from AFS (an affiliate of AIM) of $532 under an expense offset
arrangement. The effect of the above arrangement resulted in a reduction of the
Fund's total expenses of $532 for the year ended March 31, 1999.
14
<PAGE> 17
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on May 1, 1998, the Fund was limited
to borrowings up to the lesser of (i) $500,000,000 or (ii) the limits set by its
prospectus for borrowings. During the year ended March 31, 1999, the fund did
not borrow under the line of credit agreement. The funds which are parties to
the line of credit are charged a commitment fee of 0.05% on the unused balance
of the committed line. The commitment fee is allocated among such funds based on
their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the year ended March 31, 1999 was $56,086,621 and
$12,772,831, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of March 31, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 337,955
- --------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (287,892)
- --------------------------------------------------------
Net unrealized appreciation of investment
securities $ 50,063
========================================================
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the year ended March 31, 1999 and
the period January 2, 1998 (date operations commenced) through March 31, 1998
were as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 4,375,932 $ 44,035,445 1,830,454 $18,280,746
- --------------------------------------------------------------------------
Class B 1,198,092 12,077,378 270,282 2,698,095
- --------------------------------------------------------------------------
Class C 299,455 3,014,253 73,780 736,528
- --------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 111,621 1,125,789 7,600 75,970
- --------------------------------------------------------------------------
Class B 18,956 191,064 457 4,564
- --------------------------------------------------------------------------
Class C 4,580 46,173 152 1,516
- --------------------------------------------------------------------------
Reacquired:
Class A (1,332,330) (13,464,236) (58,098) (580,678)
- --------------------------------------------------------------------------
Class B (107,492) (1,083,779) (460) (4,572)
- --------------------------------------------------------------------------
Class C (77,415) (779,385) - -
- --------------------------------------------------------------------------
4,491,399 $ 45,162,702 2,124,167 $21,212,169
==========================================================================
</TABLE>
NOTE 8- FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B and
Class C capital stock outstanding during the year ended March 31, 1999 and the
period January 2, 1998 (date operations commenced) through March 31, 1998.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
---------------------- ---------------------- ----------------------
1999 1998 1999 1998 1999 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.99 $ 10.00 $ 9.99 $10.00 $ 9.99 $10.00
- ----------------------------------------------------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.54 0.11 0.47 0.09 0.47 0.09
- ----------------------------------------------------- ------- ------- ------- ------ ------ ------
Net gains (losses) on securities (both realized
and unrealized) 0.05 (0.01) 0.04 (0.01) 0.04 (0.01)
- ----------------------------------------------------- ------- ------- ------- ------ ------ ------
Total from investment operations 0.59 0.10 0.51 0.08 0.51 0.08
- ----------------------------------------------------- ------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income (0.54) (0.11) (0.46) (0.09) (0.46) (0.09)
- ----------------------------------------------------- ------- ------- ------- ------ ------ ------
Net asset value, end of period $ 10.04 $ 9.99 $ 10.04 $ 9.99 $10.04 $ 9.99
===================================================== ======= ======= ======= ====== ====== ======
Total return(a) 6.01% 1.04% 5.23% 0.81% 5.23% 0.79%
===================================================== ======= ======= ======= ====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $49,570 $17,787 $13,850 $2,699 $3,017 $ 738
===================================================== ======= ======= ======= ====== ====== ======
Ratio of expenses to average net assets(b) 0.29%(c) 0.25%(d) 1.04%(c) 1.00%(d) 1.04%(c) 1.00%(d)
===================================================== ======= ======= ======= ====== ====== ======
Ratio of net investment income to average net
assets(e) 5.41%(c) 4.80%(d) 4.66%(c) 4.05%(d) 4.66%(c) 4.05%(d)
===================================================== ======= ======= ======= ====== ====== ======
Portfolio turnover rate 30% 21% 30% 21% 30% 21%
===================================================== ======= ======= ======= ====== ====== ======
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.29% and 1.65% (annualized) for Class A, 2.04% and 2.44% (annualized) for
Class B and Class C for the periods 1999-1998, respectively.
(c) Ratios are based on average net assets of $36,187,210, $7,440,053 and
$1,707,096 for Classes A, B and C, respectively.
(d) Annualized.
(e) 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 4.41% and 3.40% (annualized) for Class A, 3.66% and
2.61% (annualized) for Class B and Class C for the periods 1999-1998,
respectively.
15
<PAGE> 18
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, 1999, and the
related statement of operations for the year then ended,
the statement of changes in net assets and the financial
highlights for the year ended March 31, 1999 and 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 financial highlights
based on our audits.
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
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. Our procedures included confirmation of
securities owned as of March 31, 1999, 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 audits provide 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, 1999, the results
of its operations for the year then ended, changes in its
net assets and financial highlights for the year ended
March 31, 1999 and the period January 2, 1998 (date
operations commenced) through March 31, 1998 in
conformity with generally accepted accounting principles.
KPMG LLP
Houston, Texas
May 7, 1999
16
<PAGE> 19
<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; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn, Jr. Stuart W. Coco Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox
President, Mercantile Bankshares Vice President The Bank of New York
90 Washington Street
Jack Fields Karen Dunn Kelley 11th Floor
Chief Executive Officer Vice President New York, NY 10286
Texana Global, Inc.;
Formerly Member Mary J. Benson COUNSEL TO THE FUND
of the U.S. House of Representatives Assistant Vice President
and Assistant Treasurer Ballard Spahr
Carl Frischling Andrews & Ingersoll, LLP
Partner Sheri Morris 1735 Market Street
Kramer, Levin, Naftalis & Frankel LLP Assistant Vice President Philadelphia, PA 19103
and Assistant Treasurer
Robert H. Graham COUNSEL TO THE DIRECTORS
President and Chief Executive Officer Renee A. Friedli
A I M Management Group Inc. Assistant Secretary Kramer, Levin, Naftalis & Frankel, LLP
919 Third Avenue
Prema Mathai-Davis P. Michelle Grace New York, NY 10022
Chief Executive Officer, YWCA of the U.S.A.; Assistant Secretary
Commissioner, New York City Dept. for the DISTRIBUTOR
Aging; and member of the Board of Directors, Jeffrey H. Kupor
Metropolitan Transportation Authority of Assistant Secretary A I M Distributors, Inc.
New York State 11 Greenway Plaza
Nancy L. Martin Suite 100
Lewis F. Pennock Assistant Secretary Houston, TX 77046
Attorney
Ofelia M. Mayo AUDITORS
Louis S. Sklar Assistant Secretary
Executive Vice President KPMG LLP
Hines Interests Lisa A. Moss 700 Louisiana
Limited Partnership Assistant Secretary Houston, TX 77002
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
We are required by Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end as to the federal tax status of dividends paid by the
Fund during the period ended March 31, 1999.
AIM High Income Municipal Fund Class A, Class B and Class C shares paid ordinary
dividends in the amount of $0.5388, $0.4641 and $0.4641 per share, respectively,
to shareholders during the Fund's initial tax year ended March 31, 1999. 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> 20
THE AIM FAMILY OF FUNDS--REGISTERED TRADEMARK--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Money Market Fund provided leadership in the mutual
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund fund industry since 1976 and
AIM Capital Development Fund managed approximately $112 billion
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS in assets for more than 6.3 million
AIM Large Cap Growth Fund AIM Advisor International Value Fund shareholders, including individual
AIM Mid Cap Equity Fund(2), (A) AIM Asian Growth Fund investors, corporate clients and
AIM Mid Cap Opportunities Fund AIM Developing Markets Fund(2) financial institutions, as of March
AIM Select Growth Fund(3) AIM Europe Growth Fund(2) 31, 1999.
AIM Small Cap Growth Fund(2), (B) AIM European Development Fund The AIM Family of
AIM Small Cap Opportunities Fund AIM International Equity Fund Funds--Registered Trademark-- is
AIM Value Fund AIM Japan Growth Fund(2) distributed nationwide, and AIM
AIM Weingarten Fund AIM Latin American Growth Fund(2) today is the 10th-largest mutual
AIM New Pacific Growth Fund(2) fund complex in the U.S. in assets
GROWTH & INCOME FUNDS under management, according to
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS Strategic Insight, an independent
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund mutual fund monitor.
AIM Advisor MultiFlex Fund AIM Global Growth Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund GLOBAL GROWTH & INCOME FUNDS
AIM Basic Value Fund(2), (C) AIM Global Growth & Income Fund(2)
AIM Charter Fund AIM Global Utilities Fund
INCOME FUNDS GLOBAL INCOME FUNDS
AIM Floating Rate Fund(2) AIM Emerging Markets Debt Fund(2), (D)
AIM High Yield Fund AIM Global Government Income Fund(2)
AIM High Yield Fund II AIM Global Income Fund
AIM Income Fund AIM Strategic Income Fund(2)
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund THEME FUNDS
AIM Global Consumer Products and Services Fund(2)
TAX-FREE INCOME FUNDS AIM Global Financial Services Fund(2)
AIM High Income Municipal Fund AIM Global Health Care Fund(2)
AIM Municipal Bond Fund AIM Global Infrastructure Fund(2)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Resources Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Telecommunications Fund(2)
AIM Global Trends Fund(2), (E)
</TABLE>
(1)AIM Aggressive Growth Fund reopened to new investors November 16, 1998.
(2)Effective May 29, 1998, A I M Advisors, Inc. became advisor to the former GT
Global Funds. (3)On May 1, 1998, AIM Growth Fund was renamed AIM Select Growth
Fund. (A)On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap
Equity Fund. (B)On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM
Small Cap Growth Fund. (C)On September 8, 1998, AIM America Value Fund was
renamed AIM Basic Value Fund. (D)On September 8, 1998, AIM Global High Income
Fund was renamed AIM Emerging Markets Debt Fund. (E)On September 8, 1998, AIM
New Dimension Fund was renamed AIM Global Trends Fund. For more complete
information about any AIM Fund(s), including sales charges and expenses, ask
your Financial consultant or securities dealer for a free prospectus(es). Please
read the prospectus(es) carefully before you invest or send money.
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