<PAGE> 1
SEMIANNUAL REPORT / SEPTEMBER 30 2000
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
CONNECTICUT LANDSCAPE BY HORACE WOLCOTT ROBBINS
ROBBINS CAPTURES THE PICTURESQUE BEAUTY OF THE CONNECTICUT
LANDSCAPE IN THIS ELEGANT PAINTING. CONNECTICUT MUNICIPAL
BONDS, IN WHICH THE FUND INVESTS, PROVIDE CAPITAL FOR THE
STATE'S CONTINUING IMPROVEMENT.
-------------------------------------
AIM Tax-Exempt Bond Fund of Connecticut is for shareholders who seek to earn a
high level of income that is free of both federal and Connecticut taxes.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Tax-Exempt Bond Fund of Connecticut's performance figures are
historical, and they reflect the reinvestment of distributions and changes
in net asset value. Unless otherwise indicated, the fund's performance is
computed at net asset value without a sales charge. When sales charges are
included in performance figures, those figures reflect the maximum 4.75%
sales charge.
o Had the advisor not absorbed fund expenses in the past, the returns would
have been lower.
o The 30-day yield is calculated on the basis of a formula defined by the SEC.
The performance 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 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 and yield will vary with market conditions.
o Revenue bonds are issued to finance public-works projects and are supported
directly by the project revenues. General obligation bonds are bonds backed
by the full faith and credit (including the taxing and further borrowing
power) of a state or municipality. Revenue bonds often are considered more
attractive, since many public-works projects (water and sewer improvements,
for example) are necessities and demand for them remains constant regardless
of economic conditions. Shareholders may benefit from their consistent
income in the event of an economic slowdown. Escrowed and pre-refunded bonds
are bonds whose repayment is guaranteed by the funds from a second bond
issue, usually U.S. Treasury bonds.
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.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lehman Municipal Bond Index, which represents the performance
of investment-grade municipal bonds, is compiled by Lehman Brothers, a
well-known global investment bank.
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 TAX-EXEMPT BOND FUND OF CONNECTICUT
<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 Almost a quarter-century later, we've grown to more than
APPEARS HERE] eight million investors, $183 billion in assets under
management and 59 retail funds. Over that time, the industry
[PHOTO OF as a whole has grown from $51 billion in assets to more than
Robert H. $7 trillion today. I never dreamed we would see such
Graham phenomenal growth. You are the main reason for our success,
APPEARS HERE] 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 step down 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 reporting period 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 TAX-EXEMPT BOND FUND OF CONNECTICUT
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND CONTINUES TO PROVIDE SOLID INCOME
HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
For the six months ended September 30, 2000, AIM Tax-Exempt Bond Fund of
Connecticut returned 3.04% at net asset value, that is, without sales charges.
By comparison, the Lehman Municipal Bond Index returned 3.97% and the average
Connecticut municipal debt fund tracked by Lipper, Inc., an independent mutual
fund performance monitor, returned 3.53%. Bear in mind that the fund is managed
more for tax-free income than for total return.
During the six-month reporting period, the fund's 30-day distribution rate
at net asset value declined slightly from 4.85% to 4.82%. The fund's
distribution rate of 4.82% on September 30 represented a taxable-equivalent
yield of 8.36%. The fund's 30-day SEC yield was 3.98% at maximum offering price,
for a taxable-equivalent yield of 6.90%. By comparison, the yield on a 10-year
Treasury note was 5.80% on September 30.
Net asset value per share remained within a narrow range of $10.25 and
$10.66 during the reporting period, continuing the fund's history of relative
price stability.
WHAT WERE THE MAJOR TRENDS IN THE BOND MARKETS?
Expressing continuing concern about potentially inflationary pressures, the
Federal Reserve Board (the Fed) raised short-term interest rates by 0.50% to
6.50% in mid-May but held rates steady at its June, August and (shortly after
the close of the reporting period) October meetings. The Fed has raised rates
six times for a total of 1.75% since June 1999. Attractive yields, along with
improved odds that the Fed's interest-rate increases may be nearing an end,
renewed investor interest in the bond markets.
By contrast, volatile equity markets produced disappointing returns in
2000, with many major market indexes down year-to-date.
WHAT WERE THE MAJOR TRENDS IN THE MUNICIPAL-BOND MARKET?
Municipal-bond issuance continued to decline; total issuance year-to-date was
$137 billion--19% lower than for the first three quarters of 1999. Many states
and localities were reluctant to offer new issues in a rising-interest-rate
environment. Fortunately for them, increased tax revenue resulting from low
unemployment, strong consumer spending, rising property values and increased
capital gains reduced the need to issue bonds to fund capital projects. Reduced
issuance has resulted in greater demand for (and better performance by) those
municipal bonds that were issued.
Yields on municipal bonds relative to Treasuries remained very attractive.
As the
-------------------------------------
ATTRACTIVE YIELDS, ALONG WITH
IMPROVED ODDS THAT THE FED'S
INTEREST-RATE INCREASES MAY BE
NEARING AN END, RENEWED INVESTOR
INTEREST IN THE BOND MARKETS.
-------------------------------------
FUND PERFORMANCE
FUND VS. 10-YEAR U.S. TREASURY NOTE
As of 9/30/00
================================================================================
TAXABLE-
EQUIVALENT
TAXABLE- 30-DAY 30-DAY
30-DAY EQUIVALENT SEC YIELD SEC YIELD 10-YEAR
DISTRIBUTION DISTRIBUTION AT MAXIMUM AT MAXIMUM U.S.
RATE RATE OFFERING OFFERING TREASURY NOTE
AT NAV AT NAV* PRICE PRICE* YIELD
4.82% 8.36% 3.98% 6.90% 5.80%
*Assumes highest marginal federal income tax rate of 39.6% and Connecticut state
income tax rate of 4.5%. Sources: Bloomberg, Lehman Brothers.
================================================================================
HISTORY OF NET ASSET VALUE STABILITY
[LINE GRAPH]
10/3/89-9/30/00
================================================================================
10.00 10/3/89 11.08 6/93 10.77 3/97
10.05 10/89 11.33 9/93 10.90 6/97
9.99 3/90 11.29 12/93 11.01 9/97
10.02 6/90 10.51 3/94 11.09 12/97
9.77 9/90 10.63 6/94 11.04 3/98
10.07 12/90 10.58 9/94 11.04 6/98
10.11 3/91 10.34 12/94 11.13 9/98
10.19 6/91 10.71 3/95 11.07 12/98
10.40 9/91 10.77 6/95 11.00 3/99
10.52 12/91 10.86 9/95 10.77 6/99
10.31 3/92 11.01 12/95 10.61 9/99
10.55 6/92 10.81 3/96 10.43 12/99
10.66 9/92 10.76 6/96 10.51 3/00
10.65 12/92 10.80 9/96 10.47 6/00
10.88 3/93 10.88 12/96 10.57 9/00
There is no guarantee that the fund will maintain a constant NAV. Investment
return will vary, so you may have a gain or a loss when you sell shares. Past
performance cannot guarantee comparable future results.
================================================================================
See important fund and index disclosures inside front cover.
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
reporting period drew to a close, many new investment-grade municipal bonds
offered yields exceeding comparable Treasury yields. Municipal bonds were one of
the best-performing asset classes during the reporting period.
HOW DID CONNECTICUT'S ECONOMY FARE?
Connecticut's economy remained strong. In June, state officials announced that
for the fiscal year ended June 30, the state's projected budget surplus would
approach $413 million--$150 million greater than had been predicted just one
month earlier. They cited the state's low 2.3% unemployment rate (the
second-lowest in the nation) and increased consumer spending fueled by
stock-market gains (the so-called "wealth effect") as reasons for
higher-than-expected revenues.
GIVEN CURRENT ECONOMIC CONDITIONS, HOW HAVE YOU MANAGED THE PORTFOLIO?
We kept the fund's weighted average maturity basically unchanged--14.36 years at
the beginning of the reporting period and 14.75 years at its close. We did so
because we believed that intermediate-term bonds offered greater value than
longer-term bonds. As interest rates remain stable, or possibly begin to
decline, we believe that these intermediate-term maturities will benefit
shareholders. During the reporting period, the duration of the portfolio
declined from 6.11 years to 5.55 years. Duration is an indicator of the
sensitivity of a bond's price to interest-rate changes; funds with shorter
durations tend to be less sensitive to price fluctuations.
WHAT DID THE FUND'S PORTFOLIO LOOK LIKE?
The portfolio consisted exclusively of investment-grade bonds. Bonds rated AAA
or AA composed 76% of the fund's holdings at the close of the reporting period.
The average credit quality of the portfolio was AA/Aa as rated by Standard &
Poor's and Moody's--two widely known credit-rating agencies. The ratings are
historical and are based on the credit quality of the individual bonds in the
portfolio. At the close of the reporting period, credit-enhanced
securities--those backed by insurance or escrowed with U.S. Treasury
securities--composed 40% of the portfolio.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
While we remain cautiously optimistic about the Connecticut economy, we
recognize that the state is not immune to national economic trends, which point
to slower economic growth in the future. A continuing tight labor market could
force employers to increase salaries; investors nervous about stock-market
volatility and a general economic slowdown could reduce their spending; higher
energy costs could reduce corporate profits; and international trade could
suffer if the dollar remains strong against the euro.
Municipal Market Advisors, Inc., a leading municipal-bond investment firm,
predicts that issuance for the remainder of 2000 and for the first half of 2001
will remain low. Should the Fed begin to lower interest rates in 2001 (as some
speculate) and should equity markets remain erratic, bond investors may continue
to enjoy steady, relatively predictable gains. Regardless, the past six months
have shown that having a portion of one's investments in bonds can be beneficial
in uncertain economic times.
AVERAGE ANNUAL TOTAL RETURNS
As of 9/30/00, including sales charges
================================================================================
10 years 5.99%
5 years 3.51
1 year (0.38)*
* 4.60% excluding sales charges
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.
================================================================================
PORTFOLIO COMPOSITION
As of 9/30/00, based on total net assets
================================================================================
TOP FIVE BOND HOLDINGS
--------------------------------------------------------------------------------
% OF
COUPON MATURITY PORTFOLIO
Connecticut 6.20% 05/15/06 4.6%
State Housing
Finance
Authority
Connecticut 6.50% 10/01/12 4.4%
State Special
Tax Obligation
Revenue
Connecticut 5.50% 11/15/35 4.4%
State Housing
Finance
Authority
University of 6.00% 11/15/21 3.6%
Connecticut
Connecticut 6.30% 11/15/17 3.5%
State Housing
Finance
Authority
================================================================================
--------------------------------------------------------------------------------
BOND-TYPE DIVERSIFICATION
[PIE CHART]
================================================================================
GENERAL OBLIGATION 17.3%
ESCROW & PRE-REFUNDED 15.7%
REVENUE 67.0%
AVERAGE QUALITY RATING AA/Aa
NUMBER OF HOLDINGS 61
WEIGHTED AVERAGE MATURITY 14.75 Years
DURATION 5.55 Years
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
================================================================================
See important fund and index disclosures inside front cover.
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MUNICIPAL
OBLIGATIONS-95.93%
EDUCATION-9.91%
Connecticut Area Cooperative
Educational Services (Staff
Development/Administration
Facilities);
Unlimited Tax Series GO
5.625%, 07/15/19(b) A -- $1,060 $ 1,038,842
------------------------------------------------------------------------
Connecticut Regional
School District No. 5;
Unlimited Tax Series
1992 GO
6.00%, 03/01/02(c)(d) AAA Aaa 335 348,434
------------------------------------------------------------------------
Connecticut State Higher Education
Supplemental Loan Authority
(Family Education Loan
Program);
Series 1990 A RB
7.50%, 11/15/10(e) -- A1 1,020 1,021,714
------------------------------------------------------------------------
University of Connecticut (Student
Fee Program);
Series 2000 A RB
6.00%, 11/15/21 AA- A1 1,325 1,367,215
========================================================================
3,776,205
========================================================================
GENERAL OBLIGATION-13.18%
Brooklyn (City of), Connecticut;
Unlimited Tax Series GO
5.50%, 05/01/06(b) AAA Aaa 250 260,197
------------------------------------------------------------------------
5.70%, 05/01/08(b) AAA Aaa 250 263,267
------------------------------------------------------------------------
Chester (Town of), Connecticut;
Unlimited Tax Series 1989 GO
7.00%, 10/01/05 -- A 190 194,281
------------------------------------------------------------------------
Connecticut (State of) (General
Purpose Public Improvement);
Unlimited Tax Series 1991 A GO
6.75%, 03/01/01(c)(d) NRR NRR 200 205,876
------------------------------------------------------------------------
Unlimited Tax Series 1992 A GO
6.50%, 03/15/02(c)(d) NRR NRR 300 314,277
------------------------------------------------------------------------
Mansfield (City of), Connecticut;
Unlimited Tax Series 1990 GO
6.00%, 06/15/07 -- A1 100 107,328
------------------------------------------------------------------------
6.00%, 06/15/08 -- A1 100 107,905
------------------------------------------------------------------------
6.00%, 06/15/09 -- A1 100 108,590
------------------------------------------------------------------------
New Britain (City of), Connecticut;
Unlimited Tax Refunding
Series 1992 Various
Purpose GO
6.00%, 02/01/11(b) AAA Aaa 400 435,288
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
GENERAL OBLIGATION-(CONTINUED)
North Canaan (City of),
Connecticut;
Unlimited Tax Series 1991 GO
6.50%, 01/15/08 -- A3 $ 125 $ 137,916
------------------------------------------------------------------------
6.50%, 01/15/09 -- A3 125 138,918
------------------------------------------------------------------------
6.50%, 01/15/10 -- A3 125 139,859
------------------------------------------------------------------------
6.50%, 01/15/11 -- A3 125 140,345
------------------------------------------------------------------------
Puerto Rico Commonwealth
(Public Improvement
Project);
Unlimited Tax Series 2000 GO
6.00%, 07/01/29 A Baa1 500 515,585
------------------------------------------------------------------------
Somers (City of),
Connecticut;
Unlimited Tax Series
1990 Various Purpose GO
6.00%, 12/01/10 -- A1 190 207,509
------------------------------------------------------------------------
Territory of American
Samoa;
Unlimited Tax Refunding
Series 2000 GO
6.00%, 09/01/08(b) A -- 1,280 1,321,344
------------------------------------------------------------------------
Westbrook (City of),
Connecticut;
Unlimited Tax Series
1992 GO
6.40%, 03/15/10(b) AAA Aaa 380 424,509
========================================================================
5,022,994
========================================================================
HEALTH CARE-21.36%
Connecticut Development
Authority (Elim Park
Baptist Home);
Refunding Series A RB
5.375%, 12/01/18 BBB+ -- 500 422,380
------------------------------------------------------------------------
Connecticut (State of),
Development Authority
(Pfizer Inc. Project);
Series 1992 PCR
6.55%, 02/15/13 AAA Aaa 250 262,720
------------------------------------------------------------------------
Connecticut (State of),
Development Authority
(Corporate Independent
Living Project);
Health Care VRD Series
1990 RB (LOC-Chase
Manhattan Bank)
5.40%, 07/01/15(f) -- VMIG-1 1,322 1,322,001
------------------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Bridgeport
Hospital);
Series 1992 A RB
6.625%, 07/01/18(b) AAA Aaa 500 518,855
------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
HEALTH CARE-(CONTINUED)
Connecticut Health and
Education Facilities
Authority (Danbury
Hospital);
Series 1991 E RB
6.50%, 07/01/01(c)(d) AAA Aaa $ 640 $ 662,515
----------------------------------------------------------------
6.50%, 07/01/01(b)(c) AAA Aaa 110 113,354
----------------------------------------------------------------
Series G RB
5.625%, 07/01/25(b) AAA Aaa 250 246,528
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Middlesex
Hospital);
Series 1992 G RB
6.25%, 07/01/02(c)(d) NRR NRR 1,100 1,153,680
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (New Britain
Memorial Hospital);
Series 1991 A RB
7.75%, 07/01/02(c)(d) NRR -- 500 536,830
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Stamford
Hospital);
Series F RB
5.40%, 07/01/09(b) AAA Aaa 1,000 1,031,810
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (William W.
Backus Hospital);
Series 1997 D RB
5.75%, 07/01/07(b)(c) AAA -- 1,000 1,001,260
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Windham
Community Memorial
Hospital);
Series 1996 C RB
5.75%, 07/01/07(b)(c) A -- 850 866,873
================================================================
8,138,806
================================================================
HOUSING-27.63%
Connecticut Housing
Development Authority
(Housing Mortgage
Finance Program); RB
Series 1991 C,
Sub-Series C-3,
6.55%, 11/15/13 AA Aa2 250 260,732
----------------------------------------------------------------
Series D-2,
5.45%, 11/15/24(e) AA Aa2 250 237,455
----------------------------------------------------------------
Connecticut Housing
Finance Authority (Group
Home Mortgage);
Special Obligation
Series 2000 G,
Sub-series H-5
5.85%, 06/15/30(b) AAA Aaa 500 502,895
----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
HOUSING-(CONTINUED)
Connecticut (State of)
(Housing Mortgage
Finance Program); RB
Series A-1, 5.70%,
05/15/08 AA Aa $ 100 $ 103,952
----------------------------------------------------------------
Sub-Series A-3, 5.95%,
05/15/17 AA Aa3 1,000 1,026,370
----------------------------------------------------------------
Series C-1, 6.30%,
11/15/17 AA Aa 1,270 1,330,007
----------------------------------------------------------------
Series C-2, 6.25%,
11/15/18 AA Aa2 750 782,663
----------------------------------------------------------------
Series C-2, 6.70%,
11/15/22(e) AA Aa2 80 82,478
----------------------------------------------------------------
Series C-2, 5.85%,
11/15/28(e) AA Aa2 560 549,360
----------------------------------------------------------------
Series C, 5.50%,
11/15/35(e) AA Aa2 1,775 1,675,156
----------------------------------------------------------------
Sub-Series 1996 D-2,
6.20%, 05/15/06(c)(e) AA Aa2 1,750 1,771,000
----------------------------------------------------------------
Series E-1, 5.95%,
05/15/17 AA Aa2 500 512,235
----------------------------------------------------------------
Series E-1, 6.00%,
05/15/17 AA Aa 675 689,215
----------------------------------------------------------------
Series G,
6.00%,11/15/06(e) AA Aa2 1,000 1,005,020
================================================================
10,528,538
================================================================
LEASE RENTAL-1.09%
Connecticut (State of)
(Middletown Courthouse
Facilities Project);
Series 1991 Lease-Rental
Revenue COP
6.25%, 12/15/01(c)(d) NRR NRR 400 416,436
================================================================
TRANSPORTATION-13.25%
Connecticut (State of),
Special Parking
Obligation (Bradley
International Airport);
Series 2000 A RB
6.60%, 07/01/24(b)(e) A -- 250 255,502
----------------------------------------------------------------
Connecticut (A67State of)
Special Tax Obligation
(Transportation
Infrastructure);
Series A
6.80%, 06/01/03(c)(d) NRR NRR 1,250 1,319,900
----------------------------------------------------------------
Series 1991 B
6.50%, 10/01/10 AA- A1 530 594,141
----------------------------------------------------------------
Series 1991 B RB
6.25%, 10/01/01(c)(d) NRR Aaa 1,000 1,037,900
----------------------------------------------------------------
Second Lien VRD Series
1990 RB (LOC-Commerz
Bank A.G.)
5.40%, 12/01/10(f) A1+ VMIG-1 48 48,000
----------------------------------------------------------------
Connecticut State Special
Tax Obligation
(Transportation
Infrastructure Sales and
Excise Tax);
Series 1991 B RB
6.50%, 10/01/12 AA- A1 1,500 1,689,525
----------------------------------------------------------------
Puerto Rico Commonwealth
Highway and
Transportation
Authority;
Series 2000 B RB
6.00%, 07/01/31 A Baa1 100 104,335
================================================================
5,049,303
================================================================
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
UTILITIES-1.21%
Guam (Government of) Power
Authority (Electrical,
Light & Power
Improvements);
Refunding Series A RB
5.25%, 10/01/34 BBB Baa3 $ 500 $ 461,455
================================================================
WATER & SEWER-5.63%
Connecticut Development
Authority Water Facility
(Bridgeport Hydraulic
Co. Project);
Refunding Series RB
7.25%, 06/01/20 A+ -- 800 818,560
----------------------------------------------------------------
Connecticut State Clean
Water Fund;
Series 1991 RB
7.00%, 01/01/11 AAA Aaa 1,100 1,128,402
----------------------------------------------------------------
Manchester (City of)
Connecticut Eighth
Utilities Fire District;
Unlimited Tax Series
1991 GO
6.75%, 08/15/06 -- Aa3 180 199,193
================================================================
2,146,155
================================================================
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MISCELLANEOUS-2.67%
Connecticut Development
Authority (Economic
Development Projects);
Refunding Series 1992 A
RB
6.00%, 11/15/08 AA- Aa $ 500 $ 508,170
----------------------------------------------------------------
Virgin Islands Public
Financial Authority
(Gross Receipts Taxes);
Series 1999 A RB 6.125%,
10/01/29(b) A -- 500 508,190
================================================================
1,016,360
================================================================
TOTAL INVESTMENTS (Cost
$35,280,336)-95.93% 36,556,252
================================================================
OTHER ASSETS LESS
LIABILITIES-4.07% 1,552,124
================================================================
NET ASSETS-100.00% $38,108,376
________________________________________________________________
================================================================
</TABLE>
Abbreviations:
COP - Certificates of Participation
GO - General Obligation Bonds
LOC - Letter of Credit
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
VRD - Variable Rate Demand
Notes to Schedule of Investments:
(a)Ratings are assigned by Standard & Poor's Corporation ("S&P") and Moody's
Service, Inc. ("Moody's"). NRR indicates a security that is not re-rated
subsequent to funding of an escrow fund (consisting of U.S. Treasury
obligations); this funding is pursuant to an advance refunding of the
security.
(b)Secured by bond insurance provided by one of the following companies: Ambac
Assurance Corp., Financial Guaranty Insurance Co., Financial Security
Assurance, or MBIA Insurance Co.
(c)Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(d)Secured by an escrow fund of U.S. Treasury obligations.
(e)Security subject to the alternative minimum tax.
(f)Demand security; payable upon demand by the Fund at specified time intervals
usually no greater than thirteen months. Interest rate is redetermined
periodically. Rate shown is the rate in effect on 9/30/00.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $35,280,336) $36,556,252
-------------------------------------------------------------
Receivables for:
Fund shares sold 1,038,155
-------------------------------------------------------------
Interest 697,190
-------------------------------------------------------------
Investment for deferred compensation plan 30,683
=============================================================
Total assets 38,322,280
=============================================================
LIABILITIES:
Payables for:
Fund shares reacquired 74,600
-------------------------------------------------------------
Dividends 57,815
-------------------------------------------------------------
Deferred compensation plan 30,683
-------------------------------------------------------------
Accrued advisory fees 15,268
-------------------------------------------------------------
Accrued administrative services fees 4,110
-------------------------------------------------------------
Accrued distribution fees 23,452
-------------------------------------------------------------
Accrued trustees' fees 1,136
-------------------------------------------------------------
Accrued transfer agent fees 632
-------------------------------------------------------------
Accrued operating expenses 6,208
=============================================================
Total liabilities 213,904
=============================================================
Net assets applicable to shares outstanding $38,108,376
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE:
Outstanding 3,603,917
=============================================================
Net asset value and redemption price per
share $ 10.57
=============================================================
Offering price per share:
(Net asset value of $10.57 divided by 95.25%) $ 11.10
_____________________________________________________________
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended September 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $1,105,475
============================================================
EXPENSES:
Advisory fees 93,460
------------------------------------------------------------
Administrative services fees 25,069
------------------------------------------------------------
Custodian fees 1,251
------------------------------------------------------------
Distribution fees 46,734
------------------------------------------------------------
Transfer agent fees 9,488
------------------------------------------------------------
Trustee's fees 3,265
------------------------------------------------------------
Other 26,914
============================================================
Total expenses 206,181
============================================================
Less: Expenses paid indirectly (260)
------------------------------------------------------------
Net expenses 205,921
============================================================
Net investment income 899,554
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) from investment
securities (237,378)
------------------------------------------------------------
Change in net unrealized appreciation of
investment securities 478,216
------------------------------------------------------------
Net gain on investment securities 240,838
============================================================
Net increase in net assets resulting from
operations $1,140,392
____________________________________________________________
============================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
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 $ 899,554 $ 1,910,744
-----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (237,378) (308,420)
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities 478,216 (1,602,460)
=========================================================================================
Net increase (decrease) in net assets resulting from
operations 1,140,392 (136)
=========================================================================================
Distributions to shareholders from net investment income (906,240) (1,927,885)
-----------------------------------------------------------------------------------------
Share transactions-net 571,764 (2,209,321)
=========================================================================================
Net increase (decrease) in net assets 805,916 (4,137,342)
=========================================================================================
NET ASSETS:
Beginning of period 37,302,460 41,439,802
=========================================================================================
End of period $38,108,376 $37,302,460
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $37,618,751 $37,046,987
-----------------------------------------------------------------------------------------
Undistributed net investment income (36,729) (30,043)
-----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (749,562) (512,184)
-----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 1,275,916 797,700
=========================================================================================
$38,108,376 $37,302,460
_________________________________________________________________________________________
=========================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Bond Fund of Connecticut (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. Matters affecting each portfolio will be voted
on exclusively by the shareholders of such portfolio. The assets, liabilities
and operations of each portfolio are accounted for separately. Information
presented in these financial statements pertains only to the Fund. The Fund's
investment objective is to earn the a high level of income exempt from federal
taxes and Connecticut 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. Securities with a demand feature exercisable within one to
seven days are 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.
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, adjusted for amortization of premiums and
discounts on investments, is recorded on the accrual basis from settlement
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.
The Fund has a capital loss carryforward of $209,019 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. The Fund cannot
distribute capital gains to shareholders until the tax loss carryforwards
have been utilized. In addition, the Fund intends to invest in such municipal
securities to allow it to qualify to pay to shareholders "exempt interest
dividends", as defined in the Internal Revenue Code.
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 AIM at the annual rate of 0.50% of the Fund's
average daily net assets.
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 $25,069 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 $7,266 for such services.
The Trust has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act
(the "Plan") with respect to the Fund whereby the Fund will pay AIM Distributors
compensation up to a maximum annual rate of 0.25% of the Fund's average daily
net
9
<PAGE> 12
assets for services related to the sale and distribution of the Fund's shares.
Of this amount, the Fund may pay a service fee of 0.25% of the average daily net
assets of the Fund to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the shares of the Fund. Any amounts not paid as a service fee under the Plan
would constitute an asset-based sales charge. The Plan also imposes a cap on the
total sales charges, including asset-based sales charges that may be paid by the
Fund. For the six months ended September 30, 2000, the Fund paid AIM
Distributors $46,734 as compensation under the Plan.
AIM Distributors received commissions of $13,107 from sales of 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 shares of the Fund. During the six months ended September
30, 2000, AIM Distributors received $33,642 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
$2,654 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 $260 under an expense
offset arrangement which resulted in a reduction of the Fund's total expenses of
$260.
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 $8,497,007 and $9,365,491, 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 $1,410,908
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (134,992)
=========================================================
Net unrealized appreciation of investment
securities $1,275,916
_________________________________________________________
=========================================================
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
10
<PAGE> 13
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 459,489 $ 4,821,570 634,272 $ 7,019,083
================================================================================================================
Issued as reinvestment of dividends 52,140 547,217 118,804 1,314,072
================================================================================================================
Reacquired (458,130) (4,797,023) (660,290) (7,303,029)
================================================================================================================
53,499 $ 571,764 92,786 $ 1,030,126
________________________________________________________________________________________________________________
================================================================================================================
</TABLE>
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, ---------------------------------------------------
2000 2000 1999 1998 1997 1996
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.51 $ 11.00 $ 11.04 $ 10.77 $ 10.81 $ 10.71
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.25 0.51 0.53 0.55 0.56 0.56
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 0.07 (0.49) (0.03) 0.27 (0.05) 0.10
=================================================================================================================================
Total from investment operations 0.32 0.02 0.50 0.82 0.51 0.66
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.26) (0.51) (0.54) (0.55) (0.55) (0.56)
=================================================================================================================================
Net asset value, end of period $ 10.57 $ 10.51 $ 11.00 $ 11.04 $ 10.77 $ 10.81
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(a) 3.04% 0.28% 4.64% 7.78% 4.84% 6.24%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $38,108 $37,302 $41,440 $40,567 $38,118 $39,355
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.10%(b) 1.09% 0.99% 0.88% 0.72% 0.66%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.10%(b) 1.10% 1.11% 1.11% 1.09% 1.16%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of net investment income to average net assets 4.81%(b) 4.79% 4.78% 5.02% 5.18% 5.16%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 23% 28% 7% 5% 17% 17%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</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 net assets of $37,285,237.
11
<PAGE> 14
<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, 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>
12
<PAGE> 15
-------------------------------------
THE AMOUNT OF INVESTMENT
RISK YOU UNDERTAKE DEPENDS
ON SEVERAL FACTORS:
YOUR FINANCIAL OBJECTIVES,
YOUR RISK TOLERANCE AND
YOUR TIME HORIZON.
-------------------------------------
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.
FUND RANKINGS ARE RELATIVE TO ONE ANOTHER WITHIN THE AIM FAMILY OF
FUNDS--REGISTERED TRADEMARK--, AND THEY SHOULD NOT BE COMPARED WITH OTHER
INVESTMENTS. THERE IS NO GUARANTEE THAT ANY ONE AIM FUND WILL BE LESS VOLATILE
THAN ANY OTHER. FOR A FULL DISCUSSION OF THE RISKS ASSOCIATED WITH EACH FUND,
PLEASE READ THE FUND'S PROSPECTUS.
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
EQUITY FUNDS
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS A I M Management Group Inc. has provided
leadership in the mutual fund industry
MORE AGGRESSIVE MORE AGGRESSIVE since 1976 and managed approximately
$183 billion in assets for more than
AIM Small Cap Opportunities(1) AIM Latin American Growth eight million shareholders, including
AIM Mid Cap Opportunities(2) AIM Developing Markets individual investors, corporate clients
AIM Large Cap Opportunities(3) AIM European Small Company and financial institutions, as of
AIM Emerging Growth AIM Asian Growth September 30, 2000.
AIM Small Cap Growth(4) AIM Japan Growth The AIM Family of Funds--Registered
AIM Aggressive Growth AIM International Emerging Growth Trademark-- is distributed nationwide,
AIM Mid Cap Growth AIM European Development and AIM today is the eighth-largest
AIM Small Cap Equity AIM Euroland Growth mutual fund complex in the United States
AIM Capital Development AIM Global Aggressive Growth in assets under management, according to
AIM Constellation(5) AIM International Equity Strategic Insight, an independent mutual
AIM Dent Demographic Trends AIM Advisor International Value fund monitor.
AIM Select Growth AIM Global Trends AIM is a subsidiary of AMVESCAP
AIM Large Cap Growth AIM Global Growth PLC, one of the world's largest
AIM Weingarten independent financial services companies
AIM Mid Cap Equity MORE CONSERVATIVE with $414 billion in assets under
AIM Value II management as of September 30, 2000.
AIM Charter SECTOR EQUITY FUNDS
AIM Value
AIM Blue Chip MORE AGGRESSIVE
AIM Basic Value
AIM Large Cap Basic Value AIM New Technology
AIM Balanced AIM Global Telecommunications and Technology
AIM Advisor Flex AIM Global Infrastructure
AIM Global Resources
MORE CONSERVATIVE AIM Global Financial Services
AIM Global Health Care
AIM Global Consumer Products and Services
AIM Advisor Real Estate
AIM Global Utilities
MORE CONSERVATIVE
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 APPPEARS HERE] [AIM LOGO APPPEARS HERE]
--Registered Trademark--
INVEST WITH DISCIPLINE
--Registered Trademark--
A I M Distributors, Inc. TCT-SAR-1
