<PAGE> 1
SEMIANNUAL REPORT / SEPTEMBER 30 2000
AIM HIGH INCOME MUNICIPAL FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
OASIS IN THE URBAN JUNGLE BY JANE WOOSTER SCOTT
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.
-------------------------------------
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
they reflect the reinvestment of distributions and changes in net asset
value.
o Had fees and expenses not been waived, returns would have been lower.
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 charge
(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 its Class A shares due to differing fees and expenses.
o The fund's average annual total returns, including sales charges, for the
periods ended 9/30/00 were as follows: Class A shares, one year, -7.74%;
inception (1/2/98), -1.75%. Class B shares, one year, -8.31%; inception
(1/2/98), -1.71%. Class C shares, one year, -4.66%; inception (1/2/98),
-0.76%.
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 annualized.
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 its 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, which 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 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:
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 an index. Unless otherwise indicated, index
results include reinvested dividends, and they 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 SOME 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
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
When we started AIM in 1976, we had only a table, two chairs
[PHOTO OF and a telephone. At the time, Bob Graham, Gary Crum and I
Charles T. had the idea of creating a mutual fund company that put
Bauer, people first. Our slogan, "people are the product," means
Chairman of that people--our employees and our investors--are our
the Board of company.
THE FUND
APPEARS HERE] Almost a quarter-century later, we've grown to more than
eight million investors, $183 billion in assets under
[PHOTO OF management and 59 retail funds. Over that time, the industry
Robert H. as a whole has grown from $51 billion in assets to more than
Graham $7 trillion today. I never dreamed we would see such
APPEARS HERE] phenomenal growth. You are the main reason for our success,
and I want you to know how much I appreciate your loyalty
and trust over the past 24 years.
Usually in this letter I review market activity during the period covered by the
report. This time, I'd just like to say thank you. I retired as chairman of the
AIM Funds effective September 30, and will retire as chairman of AIM effective
December 31, 2000. Bob Graham, whose picture appears under mine, will succeed me
as AIM's chairman and chairman of the AIM Funds. Gary Crum will remain president
of A I M Capital Management, Inc., leading our investment division. I am
enormously proud to leave AIM in such capable hands.
I'm also very proud of our team of employees, now more than 2,500 strong.
Because of their collective commitment to excellence and ethical business
practices, AIM has earned the trust of investors and financial advisors alike.
And every employee, from portfolio managers to client services representatives,
is dedicated to serving our shareholders.
Rest assured that nothing at AIM will change because of my retirement. You can
still depend on this company to manage your money responsibly and provide you
with top-notch service. As chairman of AIM and chairman of the AIM Funds, Bob is
committed to preserving the things that have made AIM great in the past and
positioning it to succeed in the future. And Gary is dedicated to maintaining
the quality and long-term performance you've come to expect from AIM.
In the pages that follow, the managers of your fund comment on recent market
activity, how they have managed your fund over the past six months and their
outlook for the coming months. We trust you will find their comments helpful.
If you have any questions or comments, please contact us through our Web site,
www.aimfunds.com, or call our Client Services department at 800-959-4246 during
normal business hours. Information about your account is available at our Web
site and on our automated AIM Investor Line, 800-246-5463.
Thank you again for the support and trust you've shown us. I feel privileged to
have helped you with your financial goals, and I wish you success in all your
endeavors.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Management Group Inc.
AIM HIGH INCOME MUNICIPAL FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND CONTINUES TO PROVIDE SOLID INCOME
MUNICIPAL BONDS OFFERED ATTRACTIVE YIELDS DURING THE REPORTING PERIOD. HOW DID
AIM HIGH INCOME MUNICIPAL FUND PERFORM?
At the close of the reporting period, municipal bonds (munis), particularly
high-yield issues, were a very attractive investment option. In many instances,
high-yield munis, which are generally exempt from federal income taxes, offered
yields exceeding those of taxable Treasury issues. Taking into account the tax
advantages of munis over Treasuries, those yields were even more compelling.
In line with these trends, the fund continued to offer attractive income, as
illustrated by the chart below.
Excluding sales charges, the fund's cumulative total returns for the six
months ended September 30, 2000, were 1.28% for Class A shares and 0.95% for
Class B and Class C shares. You will recall from our last report that the fund
had posted negative returns for the fiscal year ended March 31, 2000. We have
been able to improve total return by making adjustments to the fund's portfolio.
Please keep in mind that the fund is managed more for income than for total
return.
During the reporting period, the fund's net assets grew from $63 million to
$75 million.
WHAT WERE SOME OF THE KEY TRENDS IN THE BOND MARKET?
After a shaky start, most sectors of the bond market posted solid gains for the
six-month reporting period. Initially, interest-rate concerns hurt bond
performance. In May, the Federal Reserve Board (the Fed) raised the federal
funds rate--the rate banks charge one another for overnight loans--from 6.0% to
6.5%. This marked the sixth time since June 1999 that the Fed raised interest
rates in an effort to slow torrid economic growth and to contain inflation.
Bonds rallied in late spring and early summer after key data indicated that
economic growth was slowing, making additional Fed rate hikes less likely.
Indeed, the Fed left interest rates unchanged for the remainder of the reporting
period. Extreme stock-market volatility also made bonds more attractive to
investors. The rally continued until September when rising oil prices revived
concerns about inflation, causing bond prices to fall.
Emerging-markets debt and long-term Treasury bonds were the best-performing
sectors of the taxable-bond market. Also posting positive gains were agency
bonds, mortgage-backed securities and investment-grade corporate bonds.
High-yield corporate bonds and foreign bonds continued to struggle.
HOW DID MUNICIPAL BONDS FARE?
A lack of new-issue supply, combined with high demand, boosted muni-bond prices
during the reporting period. Indeed, munis generally outperformed stocks for the
six months ended September 30. Investors were drawn to munis because of their
relatively low prices and attractive yields.
At the same time demand was increasing, new muni-bond issuance was
decreasing. During the first nine months of 2000, new-issue volume was down 19%
from the comparable period in 1999. In a rising interest-rate environment, state
and local governments were reluctant to issue new municipal bonds to fund
projects. Additionally, many state and local governments were enjoying budget
surpluses and thus found it unnecessary to take on new debt obligations.
During the reporting period, revenue bonds slightly outperformed general
obligation bonds (GOs). GOs are supported by tax dollars, while revenue bonds
are funded with revenue generated by various projects.
WHAT ADJUSTMENTS DID YOU MAKE TO THE FUND'S PORTFOLIO?
Rising interest rates allowed us to buy new-issue muni bonds with yields ranging
from 7% to 8.5%, their highest levels since the early 1990s. Over the reporting
period, we lowered the fund's duration from 9.96 years to 8.95 years. Duration
is an indicator of the sensitivity of a bond's value to changes in market
interest rates. Funds with shorter duration tend to be less sensitive to price
fluctuations. The fund's relatively long duration has hurt its performance, but
we believe that it will be a positive factor in a stable interest-rate
environment.
FUND OFFERS ATTRACTIVE DISTRIBUTION RATE, YIELD
As of 9/30/00
<TABLE>
<CAPTION>
==========================================================================================
TAXABLE-
30-DAY 30-DAY EQUIVALENT
DISTRIBUTION TAXABLE-EQUIVALENT SEC YIELD 30-DAY SEC YIELD*
RATE DISTRIBUTION RATE* AT MAXIMUM AT MAXIMUM
AT NAV AT NAV OFFERING PRICE OFFERING PRICE
<S> <C> <C> <C> <C>
CLASS A 6.53% 10.81% 6.13% 10.15%
CLASS B 5.64 9.34 5.67 9.39
CLASS C 5.64 9.34 5.67 9.39
==========================================================================================
</TABLE>
*Assumes highest marginal federal tax rate of 39.6%
See important fund and index disclosures inside front cover.
AIM HIGH INCOME MUNICIPAL FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 9/30/00, based on total net assets
<TABLE>
<CAPTION>
==================================================================================================
TOP FIVE BOND HOLDINGS
COUPON MATURITY % CREDIT RATING OF HOLDINGS
<S> <C> <C> <C> <C>
1. Onondaga 7.00% 11/01/30 2.55%
(County of)
Industrial NOT RATED 77.21%
Development
Agency AAA 5.44%
2. Beaver (County of) 7.63 05/01/25 2.26 A 0.95%
Industrial
Development BBB 10.39%
Agency
BB 6.05%
3. Boulder (City of) 5.85 01/01/22 2.20
(Boulder City
Hospital Inc.)
REVENUE BONDS 98.56%
4. Rockdale 7.50 01/01/26 2.05
(County of) GENERAL OBLIGATION 1.44%
Development
Authority NUMBER OF BOND HOLDINGS 116
5. Orange 6.40 07/01/32 1.87 AVERAGE MATURITY 21.79 YEARS
(County of)
Housing DURATION 8.95 YEARS
Finance
Authority
The fund's portfolio composition is subject to change, and there is no assurance
that the fund will continue to hold any particular security.
==================================================================================================
</TABLE>
We decreased the fund's exposure to hospital and nursing-home bonds, which
underperformed because of issues involving reimbursement to health-care
facilities. We remain optimistic about the long-term prospects for the hospital
and nursing-home sectors because of the aging of the population and its
potential impact on future demand. Also, Congress has proposed restoration of
some spending cuts made to health-care institutions.
WHAT WAS THE COMPOSITION OF THE PORTFOLIO AT THE END OF THE REPORTING PERIOD?
The fund had 116 longer-maturity holdings--98.56% were revenue bonds and 1.44%
general obligation bonds. Holdings were diversified across nearly 20 sectors,
with hospital bonds, multi-family housing bonds and nursing-home bonds being the
three leading sector weightings.
WHAT WAS THE CREDIT QUALITY OF THE PORTFOLIO?
As of September 30, 2000, the fund had an average portfolio quality rating
equivalent to BB. Non-rated securities, with an equivalent rating of BB based on
an internal analysis by fund management, made up 77% of the fund's holdings.
Over the reporting period, we reduced the percentage of non-rated bonds in the
portfolio to enhance liquidity. Bonds rated BB or better as measured by
Standard & Poor's, a widely known credit-rating agency, made up approximately
23% of the portfolio. S&P ratings are historical and are based on an analysis of
the credit quality of the individual municipal securities in the portfolio.
WHAT IS YOUR OUTLOOK?
We remain cautiously optimistic about the prospects for high-yield muni bonds.
Recent economic indicators suggest that Fed rate hikes have begun to slow
economic growth and reduce the threat of inflation, although rising energy
prices remain a concern. The combination of a slowing economy, stable interest
rates and subdued inflation could benefit muni bonds.
Moreover, new-issue supply is expected to remain relatively low. While state
and local governments tend to issue most of their bonds toward the end of the
year to raise cash for the coming year, some analysts predict that muni-bond
issuance for the remainder of 2000 and for the first half of 2001 will continue
to be muted. If demand for munis remains strong in the face of relatively weak
new-issue supply, it could enhance the value of municipal-bond investments.
See important fund and index disclosures inside front cover.
AIM HIGH INCOME MUNICIPAL FUND
3
<PAGE> 6
SEMIANNUAL 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 (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, 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.
After considering these and 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 they know
the relative quality of the bond. Investors can then decide for themselves 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. High-rated bonds have a lower return because they are a
lower-risk investment. In other words, rating and risk/return move inversely for
bonds--the lower the rating, the higher the potential risk and return, and vice
versa.
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 or changes
in macroeconomic variables such as oil prices.
UNRATED BONDS
The fact that a bond is unrated does not make it 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.
<TABLE>
<CAPTION>
==================================================================================================
MOODY'S DEFINITION S&P
INVESTMENT-GRADE
<S> <C> <C>
Aaa Bonds of the highest quality, with the lowest degree of long-term AAA
investment risk. Issuers' ability to repay is very high.
Aa Bonds of high quality with slightly greater long-term investment risk. AA
A Bonds with favorable investment attributes but elements making them A
more susceptible to adversity.
Baa Medium-grade bonds that are currently secure but possibly unreliable BBB
over time.
NON-INVESTMENT-GRADE
(High-Yield or Junk)
Ba Bonds with speculative elements that make them not well-safeguarded BB
and uncertain.
B Bonds with low long-term assurance of payment. B
Caa Bonds of poor standing that may be in default or in danger of default. CCC
Ca Bonds of highly speculative quality that are often in default. CC
C Lowest-rated bonds with poor prospects of ever being upgraded to C
investment standing.
- Bonds in default. Issuer cannot repay. D
==================================================================================================
</TABLE>
Your fund's prospectus and statement of additional information show the maximum
percentage, if any, that your fund can invest in non-investment grade bonds.
AIM HIGH INCOME MUNICIPAL FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL OBLIGATIONS-94.72%
ARIZONA-1.22%
Pima (County of ) Industrial
Development Authority (Health Care
Facilities); Series 2000 A RB
8.25%, 11/15/22 $ 640 $ 621,574
-------------------------------------------------------------
8.50%, 11/15/32 300 296,211
=============================================================
917,785
=============================================================
CALIFORNIA-1.98%
California (State of) Educational
Facilities Authority (Fresno Pacific
University); Series 2000 A RB
6.75%, 03/01/19 1,000 1,074,660
-------------------------------------------------------------
California (State of) Educational
Facilities Authority (Keck Graduate
Institute); Series 2000 RB
6.75%, 06/01/30 390 410,728
=============================================================
1,485,388
=============================================================
COLORADO-2.80%
Colorado (State of) Health Facilities
Authority (Volunteers of America);
Health and Residential Care
Facilities Series 1999 A RB
6.00%, 07/01/29 850 696,090
-------------------------------------------------------------
Saddle Rock (City of) South
Metropolitan District No. 2 (Mill
Levy Obligation); Limited Tax Series
GO
7.20%, 12/01/19 650 656,805
-------------------------------------------------------------
St. Vincent General Hospital District;
Series 1999 RB
6.00%, 12/01/19 885 751,825
=============================================================
2,104,720
=============================================================
CONNECTICUT-0.60%
Connecticut (State of) Development
Authority (Watson Foods Co., Inc.);
Series 1998 IDR RB
5.90%, 06/01/28(a) 520 450,965
=============================================================
FLORIDA-7.88%
Fishhawk (District of) Community
Development (Public Improvements);
Series 1996 Special Assessment RB
7.63%, 05/01/18 975 1,026,402
-------------------------------------------------------------
Lexington Oaks (District of) Community
Development (Public Improvements);
Series 2000 B Special Assessment RB
6.70%, 05/01/07 750 758,880
-------------------------------------------------------------
Orange (County of) Housing Finance
Authority (Brentwood Park
Apartments); Multifamily Housing
Series 1998 G RB
6.40%, 07/01/32 1,500 1,403,715
-------------------------------------------------------------
Orange (County of) Housing Finance
Authority (Palm West Apartments);
Multifamily Housing Series 1999 B RB
6.50%, 03/01/34 1,000 909,520
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
FLORIDA-(CONTINUED)
Poinciana (District of) Community
Development (Public Utility
Improvements); Series 2000 A Special
Assessment RB
7.13%, 05/01/31 $ 615 $ 623,032
-------------------------------------------------------------
Sumter (County of) Industrial
Development Authority (Wecare Nursing
Center Project); Health Care
Facilities Series 1999 A RB
6.75%, 04/01/29 1,405 1,203,397
=============================================================
5,924,946
=============================================================
GEORGIA-4.27%
Fulton (County of) Housing Authority
(Azalea Manor Project); Multifamily
Housing Series 1998 RB
6.50%, 02/01/28 780 736,297
-------------------------------------------------------------
Fulton (County of) Housing Authority
(Washington Court Project);
Multifamily Housing Series 1998 RB
6.40%, 02/01/19 765 723,935
-------------------------------------------------------------
6.50%, 02/01/28 225 210,834
-------------------------------------------------------------
Rockdale (County of) Development
Authority (Visy Paper, Inc.); Solid
Waste Disposal Series 1993 RB
7.50%, 01/01/26(a) 1,500 1,538,220
=============================================================
3,209,286
=============================================================
ILLINOIS-5.39%
Crestwood (City of); Tax Increment
Revenue Refunding Non-Qualified Bonds
7.25%, 12/01/08 100 103,263
-------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Bethesda Home &
Retirement); Series 1999 A RB
6.25%, 09/01/14 500 480,935
-------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Bohemian-Tabor Hills);
Refunding Series 1998 A RB
5.90%, 11/15/24 775 651,496
-------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Lifelink Corp. Obligation
Group); Refunding Series 1998 RB
5.85%, 02/15/20 350 291,452
-------------------------------------------------------------
5.70%, 02/15/24 850 678,470
-------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Swedish American
Hospital); Series 2000 RB
6.88%, 11/15/30 700 710,192
-------------------------------------------------------------
Round Lake Beach (City of); Tax
Increment Refunding Series 1993 RB
7.50%, 12/01/13 1,000 1,037,610
-------------------------------------------------------------
Saint Charles (City of) (Tri-City
Center Associates Limited Project);
Series 1993 IDR (LOC-Old Kent Bank)
7.50%, 11/01/13 100 101,144
=============================================================
4,054,562
=============================================================
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
INDIANA-0.81%
Indiana (State of) Health Facilities
Financing Authority (Franciscan
Eldercare Community Services); Series
1998 RB
5.88%, 05/15/29 $ 750 $ 607,912
=============================================================
IOWA-0.13%
Iowa (State of) Finance Authority (Park
West Housing Project); Multifamily
Refunding Series 1993 RB
8.00%, 10/01/23 100 100,791
=============================================================
KANSAS-1.63%
Hutchinson (City of) Health Care
Facilities (Wesley Towers Inc.);
Refunding & Improvement Series 1999 A
RB
6.25%, 11/15/19 750 658,035
-------------------------------------------------------------
Lawrence (City of) (Holiday Inn
Project); Commercial Development
Senior Refunding Series 1997 A RB
8.00%, 07/01/16 40 41,443
-------------------------------------------------------------
Olathe (City of) Senior Living
Facilities (Aberdeen Village Inc.);
Series 2000 A RB
7.00%, 05/15/20 200 200,270
-------------------------------------------------------------
7.50%, 05/15/24 330 330,125
=============================================================
1,229,873
=============================================================
KENTUCKY-2.20%
Jefferson (County of) Health Facilities
(Beverly Enterprises Inc. Project);
Refunding Series 1999 B RB
5.88%, 08/01/07 675 642,890
-------------------------------------------------------------
Kenton (County of) Airport Board (Delta
Airlines Project); Special Facilities
Series 1992 B RB
7.25%, 02/01/22 500 516,450
-------------------------------------------------------------
Newport (City of) Public Properties
Corporation (Public Parking & Plaza);
First Mortgage Series 2000 A-1 RB
8.50%, 01/01/27 500 494,095
=============================================================
1,653,435
=============================================================
MARYLAND-1.98%
Baltimore (County of) (Bethlehem Steel
Corp. Project); Refunding Series 1994
B PCR
7.50%, 06/01/15 450 455,818
-------------------------------------------------------------
Maryland (State of) Health & Higher
Education Facilities Authority
(University of Maryland Medical
System); Series 2000 RB
6.75%, 07/01/30 1,000 1,033,030
=============================================================
1,488,848
=============================================================
MASSACHUSETTS-0.91%
Massachusetts (State of) Health &
Educational Facilities Authority
(Christopher House); Refunding Series
1999 A RB
6.88%, 01/01/29 750 684,210
=============================================================
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MICHIGAN-3.21%
Garden City (City of) Hospital Finance
Authority (Garden City Hospital Osteo
Group); Hospital Refunding Series
1998 A RB
5.75%, 09/01/17 $1,500 $ 1,208,250
-------------------------------------------------------------
Gogebic (County of) Hospital Finance
Authority (Grand View Health System
Inc.); Refunding Series 1999 RB
5.88%, 10/01/16 920 779,728
-------------------------------------------------------------
Mecosta (County of) General Hospital;
Refunding Unlimited Tax Series GO
6.00%, 05/15/18 500 428,565
=============================================================
2,416,543
=============================================================
MINNESOTA-4.86%
Columbia Heights (City of) Multifamily
and Health Care Facility (Crest View
Corp. Project); Series 1998 RB
6.00%, 03/01/33 500 417,500
-------------------------------------------------------------
Minneapolis (City of) Health Care
Facility (Ebenezer Society Project);
Series 1993 A RB
7.00%, 07/01/12 100 95,471
-------------------------------------------------------------
Minneapolis (City of) Health Care
Facility (Shelter Care Foundation);
Series 1999 A RB
6.00%, 04/01/10 1,035 950,886
-------------------------------------------------------------
Moorhead (City of) Economic Development
Authority (Eventide Housing
Development Project); Multifamily
Refunding Series 1998 A RB
6.00%, 06/01/18 500 439,575
-------------------------------------------------------------
Northfield (City of) Health Care
Facilities (Retirement Center);
Refunding and Improvement Series 1998
A RB
5.75%, 05/01/16 335 281,614
-------------------------------------------------------------
Richfield (City of) Senior Housing
Series 2000 A RB
6.75%, 02/01/14 300 302,043
-------------------------------------------------------------
7.38%, 02/01/19 435 432,777
-------------------------------------------------------------
St. Paul (City of) Port Authority and
Hotel Facilities (Radisson Kellogg
Project); Series 1999 2 RB
7.38%, 08/01/29 750 736,192
=============================================================
3,656,058
=============================================================
MISSISSIPPI-0.34%
Ridgeland (City of) Urban Renewal (The
Orchard Limited Project); Refunding
Series 1993 A RB
7.75%, 12/01/15 250 258,725
=============================================================
MISSOURI-2.36%
Good Shepherd Nursing Home District
(Nursing Home Facilities); Refunding
1998 RB
5.90%, 08/15/23 500 413,780
-------------------------------------------------------------
Madison (County of) Hospital Refunding
Series 1998 RB
5.88%, 10/01/26 500 406,660
-------------------------------------------------------------
St. Louis (City of) Airport; Series
2000 RB
6.00%, 01/01/08 500 506,380
-------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
MISSOURI-(CONTINUED)
Valley Park (City of) Industrial
Development Authority (Cape Albeon
Project); Senior Housing Series 1998
RB
6.15%, 12/01/33 $ 500 $ 446,590
=============================================================
1,773,410
=============================================================
NEVADA-2.20%
Boulder (City of) (Boulder City
Hospital Inc.); Refunding Hospital
Series 1998 RB
5.85%, 01/01/22 2,000 1,654,480
=============================================================
NEW HAMPSHIRE-1.12%
New Hampshire (State of) Business
Financial Authority (Alice Peck Day
Health System); Series 1999 A RB
6.88%, 10/01/19 750 699,690
-------------------------------------------------------------
New Hampshire (State of) Higher
Educational and Health Facilities
Authority
(Daniel Webster College); Series 1994
RB
7.63%, 07/01/04(b)(c) 100 110,331
-------------------------------------------------------------
(Franklin Pierce College); Series
1994 RB
6.00%, 10/01/18 30 28,528
=============================================================
838,549
=============================================================
NEW JERSEY-5.54%
New Jersey (State of) Economic
Development Authority (Continental
Airlines, Inc. Project); Special
Facilities Series 1999 RB
6.25%, 09/15/19(a) 400 379,592
-------------------------------------------------------------
6.40%, 09/15/23(a) 1,160 1,101,269
-------------------------------------------------------------
6.25%, 09/15/29(a) 750 699,848
-------------------------------------------------------------
New Jersey (State of) Educational
Facilities Authority (Beth Medrash
Govahoa America); Series 2000 G RB
6.38%, 07/01/20 605 599,900
-------------------------------------------------------------
New Jersey (State of) Health Care
Facilities Financing Authority
(Raritan Bay Medical Center); Series
1994 RB
7.25%, 07/01/14 750 702,570
-------------------------------------------------------------
7.25%, 07/01/27 750 679,440
=============================================================
4,162,619
=============================================================
NEW YORK-6.47%
Monroe (County of) Industrial
Development Agency (Woodland Village
Project); Civic Facilities Series
2000 RB
8.55%, 11/15/32 1,000 1,002,820
-------------------------------------------------------------
New York (State of) Industrial
Development Agency (Field Hotel
Associates LP); Refunding IDR Series
1998
5.80%, 11/01/13 475 426,626
-------------------------------------------------------------
6.00%, 11/01/28 500 428,055
-------------------------------------------------------------
New York (State of) Industrial
Development Agency (Marymount
Manhattan College Project); Civic
Facility Series 1993 RB
7.00%, 07/01/03(b)(c) 150 159,906
-------------------------------------------------------------
</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
Facilities Refunding Series 1998 RB
7.00%, 11/01/30(a) $2,000 $ 1,920,100
-------------------------------------------------------------
Suffolk (County of) Industrial
Development Agency (Spellman High
Voltage Facility); Series 1997 A IDR
6.38%, 12/01/17(a) 350 327,334
-------------------------------------------------------------
Westchester (County of) Industrial
Development Agency (Hebrew Hospital
Senior Housing Inc.); Continuing Care
Retirement Series 2000 A RB
7.00%, 07/01/21 100 97,479
-------------------------------------------------------------
7.38%, 07/01/30 500 501,435
=============================================================
4,863,755
=============================================================
NORTH DAKOTA-0.49%
Grand Forks (City of) Senior Housing
(4000 Valley Square Project); Special
Term Series 1997 RB
6.38%, 12/01/34 500 369,365
=============================================================
OHIO-6.23%
Belmont (County of) Health Systems
(East Ohio Regional Hospital);
Refunding and Improvement Series 1998
RB
5.80%, 01/01/18 800 630,128
-------------------------------------------------------------
Cuyahoga (County of) Hospital Facility
(Canton Inc. Project); Series 2000 RB
7.50%, 01/01/30 750 780,180
-------------------------------------------------------------
Fairfield (City of) Economic
Development (Beverly Enterprises Inc.
Project); Refunding Series 1992 RB
8.50%, 01/01/03 110 112,300
-------------------------------------------------------------
Lucas (County of) Health Care Facility
(Sunset Retirement Nursing Home);
Refunding & Improvement Series 2000 A
RB
6.50%, 08/15/20 500 490,395
-------------------------------------------------------------
6.55%, 08/15/24 500 489,330
-------------------------------------------------------------
Madison (County of) (Madison County
Hospital Project); Hospital
Improvement Refunding Series 1998 RB
6.25%, 08/01/18 940 822,425
-------------------------------------------------------------
6.40%, 08/01/28 1,000 860,240
-------------------------------------------------------------
Ohio (State of) (CSC Limited Project);
Solid Waste Series 1997 RB
8.50%, 08/01/22(a)(d) 1,790 501,200
=============================================================
4,686,198
=============================================================
OREGON-0.69%
Oregon (State of) Health Housing
Educational & Cultural Facilities
Authority (Linfield College Project);
Series 2000 A RB
6.63%, 10/01/20 500 516,505
-------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
PENNSYLVANIA-14.84%
Allegheny (County of) Hospital
Development Authority (Villa St.
Joseph of Baden); Health Care
Facilities Series 1998 RB
6.00%, 08/15/28 $1,000 $ 821,600
-------------------------------------------------------------
Beaver (County of) Industrial
Development Authority (Cleveland
Electric Project); Refunding Series
1995 PCR
7.63%, 05/01/25 1,600 1,701,504
-------------------------------------------------------------
Chartiers Valley (City of) Industrial &
Commercial Development Authority
(Asbury Health Center); First
Mortgage Refunding Series 1999 RB
6.38%, 12/01/19 1,000 887,820
-------------------------------------------------------------
Columbia (County of) Hospital Authority
(Bloomsburg Hospital Project); Health
Care Series 1999 RB
5.90%, 06/01/29 350 274,544
-------------------------------------------------------------
Crawford (County of) Hospital Authority
(Wesbury United Methodist Community);
Senior Living Facilities Series 1999
RB
6.25%, 08/15/29 750 674,633
-------------------------------------------------------------
Cumberland (County of) Industrial
Development Authority (Woods Cedar
Run); First Mortgage Refunding Series
1998 A RB
6.50%, 11/01/18 1,000 877,190
-------------------------------------------------------------
Lancaster (County of) Hospital
Authority (Saint Anne's Home Health
Center); Series 1999 RB
6.63%, 04/01/28 1,000 887,670
-------------------------------------------------------------
Lancaster (County of) Industrial
Development Authority (Garden Spot
Village Project); Series 2000 A RB
7.60%, 05/01/22 250 250,605
-------------------------------------------------------------
7.63%, 05/01/31 500 502,180
-------------------------------------------------------------
Montgomery (County of) Higher Education
& Health Authority (Philadelphia
Geriatric Center); Series 1999 A RB
7.38%, 12/01/30 1,340 1,259,627
-------------------------------------------------------------
Montgomery (County of) Higher Education
& Health Authority (Temple Continuing
Care Center); Series 1999 RB
6.63%, 07/01/19 1,250 1,112,513
-------------------------------------------------------------
6.75%, 07/01/29 460 403,682
-------------------------------------------------------------
Pennsylvania (State of) Higher
Education Facilities Authority
(Student Association Inc.); Student
Housing Series 2000 A RB
6.75%, 09/01/20 500 489,260
-------------------------------------------------------------
6.75%, 09/01/32 325 312,657
-------------------------------------------------------------
Philadelphia (City of) Authority For
Industrial Development (US Airways
Inc.); Special Facilities Series 2000
RB
7.50%, 05/01/10(a) 250 250,245
-------------------------------------------------------------
Philadelphia (City of) Hospital &
Higher Education Facilities Authority
(Chestnut Hill College); Series 1999
RB
6.00%, 10/01/29 500 449,340
=============================================================
11,155,070
=============================================================
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
SOUTH CAROLINA-2.40%
South Carolina (State of) Jobs and
Economic Development Authority
(Palmetto Health Alliance); Hospital
Facilities
Improvement Series 2000 A RB
7.38%, 12/15/21 $ 800 $ 821,576
-------------------------------------------------------------
(Westley Commons); Health Facilities
First
Mortgage Series 2000 RB
7.75%, 10/01/15 700 686,952
-------------------------------------------------------------
8.00%, 10/01/31 300 293,121
=============================================================
1,801,649
=============================================================
TEXAS-6.26%
Abilene (City of) Health Facilities
Development (Sears Methodist
Retirement); Corporate Retirement
Facilities Series 1998 A RB
5.88%, 11/15/18 1,000 841,130
-------------------------------------------------------------
Series 1999 RB
5.88%, 11/15/18 450 377,339
-------------------------------------------------------------
6.00%, 11/15/29 550 450,615
-------------------------------------------------------------
Atlanta (City of) Hospital Authority;
Hospital Facility Series 1999 RB
6.70%, 08/01/19 500 457,340
-------------------------------------------------------------
Bexar (County of) Housing Finance Corp.
(Villa Madrid/Cumberland Apartments);
Multifamily Housing Series 1998 A RB
7.25%, 05/01/16 200 200,528
-------------------------------------------------------------
Matagorda (County of) NAV District #1
(Reliant Energy Project); Refunding
Series 1999 B RB
5.95%, 05/01/30(a) 500 452,830
-------------------------------------------------------------
Meadow Parc Development Inc. (Meadow
Parc Apartments Project); Multifamily
Housing Series 1998 RB
6.50%, 12/01/30 1,000 925,660
-------------------------------------------------------------
Woodhill Public Facilities Corp.
(Woodhill Apartments Project);
Multifamily Housing Series 1999 RB
7.50%, 12/01/29 1,000 998,670
=============================================================
4,704,112
=============================================================
VERMONT-1.13%
Vermont (State of) Education & Health
Buildings Financing Agency (Copley
Manor Project); Health Care
Facilities Series 1999 RB
6.25%, 04/01/29 1,000 853,760
=============================================================
VIRGINIA-1.95%
Hampton (City of) Redevelopment and
Housing Authority (Olde Hampton Hotel
Association); First Mortgage
Refunding Series 1998 A RB
6.50%, 07/01/16 500 469,455
-------------------------------------------------------------
Virginia Beach (City of) Development
Authority (Beverly Inc. Project);
Industrial Development Refunding
Series 2000 RB
7.00%, 04/01/10 1,000 997,940
=============================================================
1,467,395
=============================================================
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
WISCONSIN-2.83%
Wisconsin (State of) Health and
Educational Facilities Authority
(Attic Angel Community Inc.); Series
1998 RB
5.75%, 11/15/27 $1,000 $ 797,224
-------------------------------------------------------------
(FH Healthcare Development Inc.);
Series 1999 RB
6.25%, 11/15/20 750 676,995
-------------------------------------------------------------
(St. Camillus Health Center); Series
1998 RB
5.75%, 07/01/28 300 239,031
-------------------------------------------------------------
(United Lutheran Home); Series 1998
RB
5.70%, 03/01/28 525 413,180
=============================================================
2,126,430
=============================================================
Total Long-Term Municipal
Obligations (Cost $77,678,952) 71,217,344
=============================================================
SHORT-TERM MUNICIPAL
OBLIGATIONS-5.03%(d)
CONNECTICUT-2.89%
Connecticut (State of) Development
Authority (Weekly-Corporate
Independent Living Project); Health
Care VRD Series 1990 RB (LOC-Chase
Manhattan Bank)
5.40%, 07/01/15 1,298 1,298,000
-------------------------------------------------------------
Connecticut (State of) Special Tax
Obligation (Special
Lien-Transportation Infrastructure);
VRD Series 1990 RB (LOC-Commerzbank
A.G.)
5.40%, 12/01/10 877 877,000
=============================================================
2,175,000
=============================================================
</TABLE>
<TABLE>
<CAPTION>
PAR MARKET
(000) VALUE
<S> <C> <C>
DELAWARE-0.92%
Delaware (University of); VRD Series
1998 RB
5.60%, 11/01/23 $ 694 $ 694,000
=============================================================
ILLINOIS-0.06%
Illinois (State of) Development
Financial Authority (American College
Surgeons Project); VRD Series 1996 RB
(LOC-Northern Trust Company)
5.60%, 08/01/26 44 44,000
=============================================================
TEXAS-1.16%
Bexar (County of) Housing Finance
Authority (Fountainhead Apartments);
Multifamily Refunding VRD Series 1996
RB
5.55%, 09/15/26(e) 868 868,000
=============================================================
Total Short-Term Municipal
Obligations
(Cost $3,781,000) 3,781,000
=============================================================
TOTAL INVESTMENTS-99.75% (Cost
$81,459,952) 74,998,344
=============================================================
OTHER ASSETS LESS LIABILITIES-0.25% 191,830
=============================================================
NET ASSETS-100.00% $75,190,174
_____________________________________________________________
=============================================================
</TABLE>
Investment Abbreviations:
GO - General Obligation
IDR - Industrial Development Revenue Bonds
LOC - Letter of Credit
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
VRD - Variable Rate Demand
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)Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(e)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 09/30/00.
(f)Secured by bond insurance provided by one of the following companies: Ambac
Assurance Corp., Financial Guaranty Insurance Co., Financial Security
Assurance, or MBIA Insurance Co.
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $81,459,952) $74,998,344
------------------------------------------------------------
Receivables for:
Fund shares sold 1,544,364
------------------------------------------------------------
Interest 1,529,549
------------------------------------------------------------
Investments sold 25,000
------------------------------------------------------------
Investment for deferred compensation plan 12,267
============================================================
Total assets 78,109,524
============================================================
LIABILITIES:
Payables for:
Investments purchased 2,505,075
------------------------------------------------------------
Fund shares reacquired 137,198
------------------------------------------------------------
Dividends 194,946
------------------------------------------------------------
Deferred compensation plan 12,267
------------------------------------------------------------
Accrued administrative services fees 4,247
------------------------------------------------------------
Accrued distribution fees 61,856
------------------------------------------------------------
Accrued transfer agent fees 2,455
------------------------------------------------------------
Accrued operating expenses 1,306
============================================================
Total liabilities 2,919,350
============================================================
Net assets applicable to shares outstanding $75,190,174
____________________________________________________________
============================================================
NET ASSETS:
Class A $46,372,698
____________________________________________________________
============================================================
Class B $23,973,952
____________________________________________________________
============================================================
Class C $ 4,843,524
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE:
Class A 5,422,647
____________________________________________________________
============================================================
Class B 2,801,919
____________________________________________________________
============================================================
Class C 566,044
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 8.55
------------------------------------------------------------
Offering price per share:
(Net asset value of $8.55 divided by 95.25%) $ 8.98
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 8.56
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 8.56
____________________________________________________________
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended September 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 2,334,513
============================================================
EXPENSES:
Advisory fees 203,108
------------------------------------------------------------
Administrative services fees 25,206
------------------------------------------------------------
Custodian fees 2,034
------------------------------------------------------------
Distribution fees -- Class A 52,391
------------------------------------------------------------
Distribution fees -- Class B 108,364
------------------------------------------------------------
Distribution fees -- Class C 20,936
------------------------------------------------------------
Transfer agent fees 15,088
------------------------------------------------------------
Registration and filing fees 30,781
------------------------------------------------------------
Trustees' fees 2,123
------------------------------------------------------------
Other 52,526
============================================================
Total expenses 512,557
============================================================
Less: Fees waived and expenses reimbursed (229,088)
------------------------------------------------------------
Expenses paid indirectly (469)
============================================================
Net expenses 283,000
============================================================
Net investment income 2,051,513
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) from investment
securities (702,933)
============================================================
Change in net unrealized appreciation
(depreciation) of investment securities (555,142)
============================================================
Net gain (loss) on investment securities (1,258,075)
============================================================
Net increase in net assets resulting from
operations $ 793,438
____________________________________________________________
============================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2000 and the year ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
2000 2000
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,051,513 $ 3,808,319
------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (702,933) (3,732,037)
------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (555,142) (5,956,529)
==========================================================================================
Net increase (decrease) in net assets resulting from
operations 793,438 (5,880,247)
==========================================================================================
Distributions to shareholders from net investment income:
Class A (1,352,423) (2,644,268)
------------------------------------------------------------------------------------------
Class B (609,064) (924,064)
------------------------------------------------------------------------------------------
Class C (116,771) (215,599)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 8,520,242 (4,438,767)
------------------------------------------------------------------------------------------
Class B 4,088,589 8,998,851
------------------------------------------------------------------------------------------
Class C 822,834 1,710,760
==========================================================================================
Net increase (decrease) in net assets 12,146,845 (3,393,334)
==========================================================================================
NET ASSETS:
Beginning of period 63,043,329 66,436,663
==========================================================================================
End of period $75,190,174 $63,043,329
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $86,056,093 $72,624,428
------------------------------------------------------------------------------------------
Undistributed net investment income 42,054 68,799
------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (4,446,365) (3,743,432)
------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (6,461,608) (5,906,466)
==========================================================================================
$75,190,174 $63,043,329
__________________________________________________________________________________________
==========================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM High Income Municipal Fund (the "Fund") is a series portfolio of AIM
Tax-Exempt Funds (the "Trust"). The Trust is a Delaware business trust
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of four
separate portfolios, each having an unlimited number of shares of beneficial
interest. Prior to June 1, 2000 the Fund was organized as a series portfolio of
AIM Tax-Exempt Funds, Inc. At a meeting held on February 3, 2000, the Board of
Directors of AIM Tax-Exempt Funds, Inc. approved an Agreement and Plan of
Reorganization (the "Reorganization") which reorganized the Fund as a series
portfolio of the Trust. Shareholders of the Fund approved the Reorganization at
a meeting held on May 31, 2000. The Fund currently offers three different
classes of shares: Class A shares, Class B shares and Class C shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Matters affecting each
portfolio or class will be 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 the Fund. The Fund's investment objective is to achieve a high
level of current income exempt from federal income taxes.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- Portfolio securities are valued on the
basis of prices provided by an independent pricing service approved by the
Board of Trustees, 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 Trustees, or persons designated by the Board of Trustees,
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 Trust's officers in a manner specifically authorized
by the Board of Trustees. 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 84% of the Fund's
investment portfolio at the end of the period.
B. Securities Transactions and Investment Income -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded on the accrual basis from
settlement date. Dividend income is recorded on the ex-dividend date.
C. Distributions -- It is the policy of the Fund to declare
dividends from net investment income daily and pay monthly. Distributions
from net realized capital gains, if any, are generally paid annually and
recorded on ex-dividend date. The Fund may elect to use a portion of the
proceeds from redemptions as distributions for federal income tax purposes.
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 $1,007,290
which may be carried forward to offset future taxable gains, if any, which
expires in varying increments, if not previously utilized, in the year 2008.
E. Expenses -- Distribution expenses and certain transfer agency
expenses directly attributable to a class of shares are charged to those
classes' 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 Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to
12
<PAGE> 15
AIM based upon the following annual rates, to the average daily net assets of
the Fund:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
---------- -----------
<S> <C>
First $500 million 0.60%
--------------------------------------------------------
Over $500 million up to and including $1
billion 0.55%
--------------------------------------------------------
Over $1 billion up to and including $1.5
billion 0.50%
--------------------------------------------------------
Over $1.5 billion 0.45%
________________________________________________________
========================================================
</TABLE>
During the six months ended September 30, 2000, AIM waived fees and reimbursed
expenses of $229,008.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2000,
AIM was paid $25,206 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 agency and
shareholder services to the Fund. For the six months ended September 30, 2000,
AFS was paid $9,828 for such services.
The Trust 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 Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C 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 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. For the six months ended September
30, 2000, the Class A, Class B and Class C shares paid AIM Distributors $52,391,
$108,364 and $20,936, respectively, as compensation under the Plans.
AIM Distributors received commissions of $25,173 from sales of the Class A
shares of the Fund during the six months ended September 30, 2000. 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 six months
ended September 30, 2000, AIM Distributors received $3,517 in contingent
deferred sales charges imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended September 30, 2000, the Fund paid legal fees of
$2,677 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended September 30, 2000, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) of $469 under an expense
offset arrangement which resulted in a reduction of the Fund's total expenses of
$469.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an
"interested person" of AIM. The Trust invests trustees' fees, if so elected by a
trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. 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. During the six months ended
September 30, 2000, the Fund did not borrow under the line of credit agreement.
The funds which are party to the line of credit are charged a commitment fee of
0.09% on the unused balance of the committed line. The commitment fee is
allocated among the 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 by the Fund during the six months ended September 30, 2000
was $20,190,522 and $6,305,761, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of September 30, 2000 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 430,443
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (6,892,051)
=========================================================
Net unrealized appreciation (depreciation)
of investment securities $(6,461,608)
_________________________________________________________
=========================================================
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
13
<PAGE> 16
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended September 30, 2000 and
the year ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 1,523,716 $13,092,251 4,375,932 $ 44,035,445
--------------------------------------------------------------------------------------------------------------------
Class B 728,479 6,273,448 1,198,092 12,077,378
--------------------------------------------------------------------------------------------------------------------
Class C 289,437 2,484,512 299,455 3,014,253
====================================================================================================================
Issued as reinvestment of dividends:
Class A 78,022 669,921 111,621 1,125,789
--------------------------------------------------------------------------------------------------------------------
Class B 31,887 273,893 18,956 191,064
--------------------------------------------------------------------------------------------------------------------
Class C 7,277 62,514 4,580 46,173
====================================================================================================================
Reacquired:
Class A (609,242) (5,241,930) (1,332,330) (13,464,236)
--------------------------------------------------------------------------------------------------------------------
Class B (285,716) (2,458,752) (107,492) (1,083,779)
--------------------------------------------------------------------------------------------------------------------
Class C (200,634) (1,724,192) (77,415) (779,385)
====================================================================================================================
1,563,226 $13,431,665 4,491,399 $ 45,162,702
____________________________________________________________________________________________________________________
====================================================================================================================
</TABLE>
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------
JANUARY 2, 1998
SIX MONTHS YEAR ENDED (DATE OPERATIONS
ENDED MARCH 31, COMMENCED) TO
SEPTEMBER 30, ------------------ MARCH 31,
2000 2000 1999 1998
------------- ------- ------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.72 $ 10.04 $ 9.99 $ 10.00
----------------------------------------------------- ---------- ------- ------- -----------
Income from investment operations:
Net investment income 0.27 0.56 0.54 0.11
----------------------------------------------------- ---------- ------- ------- -----------
Net gains (losses) on securities (both realized and
unrealized) (0.16) (1.32) 0.05 (0.01)
----------------------------------------------------- ========== ======= ======= ===========
Total from investment operations 0.11 (0.76) 0.59 0.10
----------------------------------------------------- ========== ======= ======= ===========
Less distributions:
Dividends from net investment income (0.28) (0.56) (0.54) (0.11)
----------------------------------------------------- ========== ======= ======= ===========
Net asset value, end of period $ 8.55 $ 8.72 $ 10.04 $ 9.99
_____________________________________________________ __________ _______ _______ ___________
===================================================== ========== ======= ======= ===========
Total return(a) 1.28% (7.79)% 6.01% 1.04%
_____________________________________________________ __________ _______ _______ ___________
===================================================== ========== ======= ======= ===========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $46,373 $38,645 $49,570 $17,787
_____________________________________________________ __________ _______ _______ ___________
===================================================== ========== ======= ======= ===========
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.55%(b) 0.50% 0.29% 0.25%(c)
----------------------------------------------------- ---------- ------- ------- -----------
Without fee waivers and/or expense reimbursements 1.23%(b) 1.28% 1.29% 1.65%(c)
===================================================== ========== ======= ======= ===========
Ratio of net investment income to average net assets 6.34%(b) 5.95% 5.41% 4.80%(c)
_____________________________________________________ __________ _______ _______ ___________
===================================================== ========== ======= ======= ===========
Portfolio turnover rate 10% 51% 30% 21%
_____________________________________________________ __________ _______ _______ ___________
===================================================== ========== ======= ======= ===========
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are annualized and based on average daily net assets of $41,798,071.
(c) Annualized.
14
<PAGE> 17
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------
JANUARY 2, 1998
SIX MONTHS YEAR ENDED (DATE SALES
ENDED MARCH 31, COMMENCED) TO
SEPTEMBER 30, ------------------ MARCH 31,
2000 2000 1999 1998
------------- ------- ------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.72 $ 10.04 $ 9.99 $10.00
----------------------------------------------------- ---------- ------- ------- ----------
Income from investment operations:
Net investment income 0.24 0.48 0.47 0.09
----------------------------------------------------- ---------- ------- ------- ----------
Net gains (losses) on securities (both realized and
unrealized) (0.16) (1.32) 0.04 (0.01)
===================================================== ========== ======= ======= ==========
Total from investment operations 0.08 (0.84) 0.51 0.08
===================================================== ========== ======= ======= ==========
Less distributions:
Dividends from net investment income (0.24) (0.48) (0.46) (0.09)
===================================================== ========== ======= ======= ==========
Net asset value, end of period $ 8.56 $ 8.72 $ 10.04 $ 9.99
_____________________________________________________ __________ _______ _______ __________
===================================================== ========== ======= ======= ==========
Total return(a) 0.95% (8.54)% 5.23% 0.81%
_____________________________________________________ __________ _______ _______ __________
===================================================== ========== ======= ======= ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $23,974 $20,298 $13,850 $2,699
_____________________________________________________ __________ _______ _______ __________
===================================================== ========== ======= ======= ==========
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.30%(b) 1.26% 1.04% 1.00%(c)
----------------------------------------------------- ---------- ------- ------- ----------
Without fee waivers and/or expense reimbursements 1.98%(b) 2.04% 2.04% 2.44%(c)
===================================================== ========== ======= ======= ==========
Ratio of net investment income to average net assets 5.59%(b) 5.19% 4.66% 4.05%(c)
_____________________________________________________ __________ _______ _______ __________
===================================================== ========== ======= ======= ==========
Portfolio turnover rate 10% 51% 30% 21%
_____________________________________________________ __________ _______ _______ __________
===================================================== ========== ======= ======= ==========
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $21,613,609.
(c) Annualized.
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
JANUARY 2, 1998
SIX MONTHS YEAR ENDED (DATE SALES
ENDED MARCH 31, COMMENCED) TO
SEPTEMBER 30, ---------------- MARCH 31,
2000 2000 1999 1998
------------- ------ ------ ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.72 $10.04 $ 9.99 $10.00
----------------------------------------------------- --------- ------ ------ ----------
Income from investment operations:
Net investment income 0.24 0.48 0.47 0.09
----------------------------------------------------- --------- ------ ------ ----------
Net gains (losses) on securities (both realized and
unrealized) (0.16) (1.32) 0.04 (0.01)
===================================================== ========= ====== ====== ==========
Total from investment operations 0.08 (0.84) 0.51 0.08
===================================================== ========= ====== ====== ==========
Less distributions:
Dividends from net investment income (0.24) (0.48) (0.46) (0.09)
===================================================== ========= ====== ====== ==========
Net asset value, end of period $ 8.56 $ 8.72 $10.04 $ 9.99
_____________________________________________________ _________ ______ ______ __________
===================================================== ========= ====== ====== ==========
Total return(a) 0.95% (8.54)% 5.23% 0.79%
_____________________________________________________ _________ ______ ______ __________
===================================================== ========= ====== ====== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,844 $4,100 $3,017 $ 738
===================================================== ========= ====== ====== ==========
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.30%(b) 1.26% 1.04% 1.00%(c)
----------------------------------------------------- --------- ------ ------ ----------
Without fee waivers and/or expense reimbursements 1.98%(b) 2.04% 2.04% 2.44%(c)
_____________________________________________________ _________ ______ ______ __________
===================================================== ========= ====== ====== ==========
Ratio of net investment income to average net assets 5.59%(b) 5.19% 4.66% 4.05%(c)
_____________________________________________________ _________ ______ ______ __________
===================================================== ========= ====== ====== ==========
Portfolio turnover rate 10% 51% 30% 21%
_____________________________________________________ _________ ______ ______ __________
===================================================== ========= ====== ====== ==========
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $4,175,780.
(c) Annualized.
15
<PAGE> 18
THE AIM FUNDS--Registered Trademark--
RISK SPECTRUM
On the back cover of this fund report, you'll find the funds in the AIM family
divided into the following categories: sector, international/global, domestic,
taxable and tax-free. You'll also notice that the funds in each category are
listed from more aggressive to more conservative.
Within each category of this risk spectrum, we assessed each fund on the
basis of three factors: its holdings, volatility patterns and diversification.
From that assessment, we assigned a degree of risk to each fund and ordered them
accordingly.
Mutual funds typically invest in stocks, bonds or money market instruments,
each with varying levels of potential risk and reward. Generally, the riskier
the investment, the greater the potential reward.
o Stock funds usually offer the most upside potential, but they also carry the
greatest risk. Funds that invest in large, well-established companies
generally have lower risk/reward potential than funds that invest in small,
fast-growing companies.
o Funds that invest in a broad range of industries are considered more
diversified and less risky--and potentially less rewarding--than funds that
invest in a single sector, such as technology.
o Funds that invest in international markets tend to have higher risk/reward
potential than those that invest solely in domestic securities.
o Bond funds are generally considered safer and therefore potentially less
rewarding than stock funds. Funds that invest in U.S. Treasury securities
typically have lower risk/reward potential than funds that invest in
higher-yielding junk bonds.
o Money market funds, while considered extremely safe, typically produce lower
returns than stock and bond funds. Moreover, it is possible that a money
market fund's returns will not keep pace with inflation.
The amount of investment risk you undertake depends on several factors: your
financial objectives, your risk tolerance and your time horizon. Are you saving
for your later years or are you investing to buy a large item, like a car or a
house, soon? Are you a young adult early in your work life, or are you
approaching retirement?
If your investment plan has a rather long time horizon, you may be able to
invest more aggressively because you could have time to recoup should you
experience losses. If your needs are more immediate, you may need to be more
conservative to meet your goal.
Because these factors change over time, it's a good idea to reassess your
portfolio periodically to make sure it still meets your needs. Your financial
advisor can help you figure out if your portfolio is right where it should be or
if it could use some fine-tuning.
In assessing your investments, remember to keep diversification in mind.
Such a strategy, where you spread your investments over several types of mutual
funds, may help mitigate volatility and/or risk in your portfolio because not
all investments behave the same way at the same time.
AIM has a large selection of mutual funds to choose from. See your financial
advisor for insight into which ones would best fit in your portfolio.
-------------------------------------
THE AMOUNT OF INVESTMENT
RISK YOU UNDERTAKE DEPENDS
ON SEVERAL FACTORS: YOUR
FINANCIAL OBJECTIVES, YOUR
RISK TOLERANCE AND YOUR
TIME HORIZON.
-------------------------------------
<PAGE> 19
<TABLE>
<CAPTION>
BOARD OF TRUSTEES 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
Formerly 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
Twenty First Century Group, 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 TRUSTEES
President and Chief Executive Officer Jim A. Coppedge
A I M Management Group Inc. Assistant Secretary Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
Prema Mathai-Davis Renee A. Friedli New York, NY 10022
Formerly Chief Executive Officer, Assistant Secretary
YWCA of the U.S.A. DISTRIBUTOR
P. Michelle Grace
Lewis F. Pennock Assistant Secretary A I M Distributors, Inc.
Partner 11 Greenway Plaza
Pennock & Cooper Nancy L. Martin Suite 100
Assistant Secretary Houston, TX 77046
Louis S. Sklar
Executive Vice President Ofelia M. Mayo
Hines Interests Assistant Secretary
Limited Partnership
Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
</TABLE>
16
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
EQUITY FUNDS
<TABLE>
<S> <C> <C>
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS A I M Management Group Inc. has provided
leadership in the mutual fund industry since
MORE AGGRESSIVE MORE AGGRESSIVE 1976 and managed approximately $183 billion
in assets for more than eight million
AIM Small Cap Opportunities(1) AIM Latin American Growth shareholders, including individual
AIM Mid Cap Opportunities(2) AIM Developing Markets investors, corporate clients and financial
AIM Large Cap Opportunities(3) AIM European Small Company institutions, as of September 30, 2000.
AIM Emerging Growth AIM Asian Growth The AIM Family of Funds--Registered
AIM Small Cap Growth(4) AIM Japan Growth Trademark-- is distributed nationwide, and
AIM Aggressive Growth AIM International Emerging Growth AIM today is the eighth-largest mutual fund
AIM Mid Cap Growth AIM European Development complex in the United States in assets under
AIM Small Cap Equity AIM Euroland Growth management, according to Strategic Insight,
AIM Capital Development AIM Global Aggressive Growth an independent mutual fund monitor.
AIM Constellation(5) AIM International Equity AIM is a subsidiary of AMVESCAP PLC, one
AIM Dent Demographic Trends AIM Advisor International Value of the world's largest independent financial
AIM Select Growth AIM Global Trends services companies with $414 billion in
AIM Large Cap Growth AIM Global Growth assets under management as of September 30,
AIM Weingarten 2000.
AIM Mid Cap Equity MORE CONSERVATIVE
AIM Value II
AIM Charter
AIM Value SECTOR EQUITY FUNDS
AIM Blue Chip
AIM Basic Value MORE AGGRESSIVE
AIM Large Cap Basic Value
AIM Balanced AIM New Technology
AIM Advisor Flex AIM Global Telecommunications and Technology
AIM Global Infrastructure
MORE CONSERVATIVE AIM Global Resources
AIM Global Financial Services
AIM Global Health Care
AIM Global Consumer Products and Services [AIM LOGO APPEARS HERE]
AIM Advisor Real Estate --Registered Trademark--
AIM Global Utilities
INVEST WITH DISCIPLINE
MORE CONSERVATIVE --Registered Trademark--
FIXED-INCOME FUNDS
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Strategic Income AIM High Income Municipal
AIM High Yield II AIM Tax-Exempt Bond of Connecticut
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate
AIM Global Income AIM Tax-Exempt Cash
AIM Floating Rate(6)
AIM Intermediate Government MORE CONSERVATIVE
AIM Limited Maturity Treasury
AIM Money Market
MORE CONSERVATIVE
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from more
aggressive to more conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Large Cap Opportunities Fund closed to
new investors Sept. 29, 2000. (4) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (5) AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations Dec. 1, 1999.
(6) AIM Floating Rate Fund was restructured to offer multiple share classes
April 3, 2000. Existing shares were converted to Class B shares, and Class C
shares commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES
AND EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used as
sales material after Jan. 20, 2001, this report must be accompanied by a fund
Performance & Commentary or by an AIM Quarterly Review of Performance for the
most recent quarter end.
[DALBAR LOGO APPEARS HERE]
A I M Distributors, Inc.
HIM-SAR-1
