As filed with the Securities and Exchange Commission on August 11, 1999
File No. 811-8454
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 8 /x/
GLOBAL INVESTMENT PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (713) 626-1919
Samuel D. Sirko, Esq.
A I M Advisors, Inc.
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Name and Address of Agent for Service)
<PAGE>
EXPLANATORY NOTE
This Amendment to the Registration Statement of Global Investment
Portfolio has been filed by the Registrant pursuant to Section 8(b) of the
Investment Company Act of 1940, as amended (the "1940 Act"). However, beneficial
interests in the Registrant have not been registered under the Securities Act of
1933, as amended (the "1933 Act"), since such interests are offered solely in
private placement transactions that do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may
only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Amendment to the Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any beneficial interests in the Registrant.
<PAGE>
GLOBAL INVESTMENT PORTFOLIO
CONTENTS OF REGISTRATION STATEMENT
This registration statement of Global Investment Portfolio contains the
following documents:
Facing Sheet
Contents of Registration Statement
Part A*
Part B
Part C
Signature Page
Exhibits
* Previously filed in Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A, on February 26, 1999.
<PAGE>
GLOBAL INVESTMENT PORTFOLIO
PART B
Part B of this Registration Statement should be read only in conjunction
with Part A. Capitalized terms used in Part B and not otherwise defined have the
meanings given them in Part A of this Registration Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement of Global Investment Portfolio (the "Master Portfolio")
are incorporated herein by reference from Post-Effective Amendment No. 57 to the
Registration Statement of AIM Investment Funds (1940 Act File No. 811-5426), as
filed with the Securities and Exchange Commission ("SEC") on February 22, 1999
("Feeder Registration Statement"). Part B of the Feeder Registration Statement
includes the joint statement of additional information of the AIM Theme Funds
("Feeder's Part B").
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
Cover Page: Not applicable.
Page
History of Global Investment Portfolio...............................B-1
Description of the Master Portfolio and its investments and Risks....B-1
Management of the Master Portfolio...................................B-2
Control Persons and Principal Holders of Interests...................B-2
Investment Advisory and Other Services...............................B-3
Brokerage Allocation and Other Practices.............................B-4
Capital Stock and Other Securities...................................B-4
Purchase, Redemption and Pricing of Securities.......................B-6
Taxation of the Portfolio............................................B-7
Underwriters.........................................................B-7
Calculation of Performance Data......................................B-7
Financial Statements.................................................B-7
ITEM 11. HISTORY OF GLOBAL INVESTMENT PORTFOLIO.
The Master Portfolio was organized as a Delaware business trust on May 7,
1998. On May 29, 1998, the Master Portfolio acquired the assets and assumed the
liabilities of Global Investment Portfolio, a New York common law trust.
ITEM 12. DESCRIPTION OF THE MASTER PORTFOLIO AND ITS INVESTMENTS AND RISKS.
The Master Portfolio is a diversified, open-end management investment
company.
Part A contains basic information about the investment objectives,
principal investment strategies and principal risks of Financial Services
Portfolio, Infrastructure Portfolio, Resources Portfolio and Consumer Products
Portfolio, each a subtrust or "series" of the Master Portfolio. This Part B
<PAGE>
supplements the discussion in Part A of the investment objectives, principal
investment strategies and principal risks of the Portfolios.
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of the Portfolios, the types
of securities bought and investment techniques used by the Portfolios, and
certain risks attendant thereto, as well as other information on the Portfolios'
investment programs, is incorporated by reference from the sections entitled
"Investment Strategies and Risks," "Options, Futures and Currency Strategies,"
"Risk Factors," "Investment Limitations" and "Execution of Portfolio
Transactions" in the Feeder's Part B.
ITEM 13. MANAGEMENT OF THE MASTER PORTFOLIO.
Information about the Trustees and officers of the Master Portfolio, and
their roles in management of the Portfolios and other AIM Funds, is incorporated
herein by reference from the section entitled "Trustees and Executive Officers"
in the Feeder's Part B.
The Master Portfolio pays each Trustee who is not a director, officer or
employee of A I M Advisors, Inc. ("AIM") or any affiliated company an annual fee
of $500 a year, plus $600 for each meeting of the Board attended, and reimburses
travel and other expenses incurred in connection with attending Board meetings.
Other Trustees and officers receive no compensation or expense reimbursement
from the Master Portfolio. For the fiscal year ended October 31, 1998, Financial
Services Portfolio, Infrastructure Portfolio and Resources Portfolio each paid
Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley Trustees' fees and
expense reimbursements of $1,454, $1,346, $1,496 and $1,496, respectively. For
the fiscal year ended October 31, 1998, Consumer Products Portfolio paid Mr.
Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley Trustees' fees and expense
reimbursements of $812.45, $812.45, $662.45 and $662.45, respectively. For the
fiscal year ended October 31, 1998, Mr. Anderson, Mr. Bayley, Mr. Patterson and
Miss Quigley, who are not directors, officers or employees of AIM or any
affiliated company, each received total compensation of $97,600, $97,500,
$104,450 and $106,350, respectively, from the investment companies which are
managed or administered by AIM and which may be sub-advised and sub-administered
by the Sub-Advisor or sub-advised by IAML, INVESCO Asset Management (Japan)
Limited or INVESCO Asia Limited for which he or she serves as a Director or
Trustee. Fees and expenses disbursed to the Trustees contained no accrued or
payable pension, or retirement benefits.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF BENEFICIAL INTERESTS.
As of the date of this filing, Financial Services Fund, Resources Fund,
Infrastructure Fund and Consumer Products Fund (each a "Fund," collectively,
the "Funds") owned 99.9%, 99.9%, 99.9% and 99.9% of the value of the outstanding
beneficial interests in Financial Services Portfolio, Resources Portfolio,
Infrastructure Portfolio and Consumer Products Portfolio, respectively. Because
currently each Fund controls its corresponding Portfolio, each Fund may take
actions affecting its corresponding Portfolio without the approval of any other
investor.
Each Fund has informed its corresponding Portfolio that whenever a Fund is
requested to vote on any proposal of its corresponding Portfolio, it will hold a
<PAGE>
meeting of shareholders and will cast its vote as instructed by its
shareholders. It is anticipated that other investors in each Portfolio will
follow the same or a similar practice.
The address of the Master Portfolio is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046.
As of February 25, 1999, the officers and Trustees and their families as a
group owned in the aggregate beneficially or of record less than 1% of the
outstanding interests of each Portfolio.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
Information on the investment management and other services provided for
or on behalf of the Portfolios is incorporated herein by reference from the
sections entitled "Management" and "Miscellaneous Information" in the Feeder's
Part B. The following list identifies the specific sections in the Feeder's Part
B under which the information required by Item 15 of Form N-1A may be found;
each section is incorporated herein by reference.
================================================================================
Item 15(a) Management; Miscellaneous Information
================================================================================
Item 15(b) Not applicable
================================================================================
Item 15(c) Not applicable
================================================================================
Item 15(d) Management
================================================================================
Item 15(e) Not applicable
================================================================================
Item 15(f) Not applicable
================================================================================
Item 15(g) Not applicable
================================================================================
Item 15(h) Miscellaneous Information
================================================================================
For the fiscal years ended October 31, 1996 and 1997, the Financial
Services Portfolio, Infrastructure Portfolio and Resources Portfolio paid
investment management and administration fees to INVESCO (NY), Inc. in the
amounts of $99,991, $635,456 and $425,745; and $346,965, $772,727 and $979,215,
respectively. For the period November 1, 1997 to May 29, 1998, the Financial
Services Portfolio, Infrastructure Portfolio and Resources Portfolio paid
investment management and administration fees to INVESCO (NY), Inc. in the
amounts of $415,975, $384,081 and $478,132, respectively. For the period May 30,
1998 to October 31, 1998, the Financial Services Portfolio, Infrastructure
Portfolio and Resources Portfolio paid aggregate investment management and
administration fees to AIM and/or INVESCO (NY), Inc. in the amounts of $310,027,
$227,946 and $200,643, respectively.
For the fiscal years ended October 31, 1996 and 1997, the Consumer
Products Portfolio paid investment management and administration fees to INVESCO
(NY), Inc. in the amounts of $422,640 and $1,207,854, respectively. For the
period November 1, 1997 to May 29, 1998, the Consumer Products Portfolio paid
<PAGE>
investment management and administration fees of $762,612 to INVESCO (NY), Inc.
For the period May 30, 1998 to October 31, 1998, the Consumer Products Portfolio
paid aggregate investment management and administration fees of $566,451 to AIM
and/or INVESCO (NY), Inc.
For the fiscal years ended October 31, 1996 and 1997, INVESCO (NY), Inc.
reimbursed the Financial Services Portfolio, Infrastructure Portfolio and
Resources Portfolio for their respective investment management and
administration fees in the amounts of $99,991, $0 and $0; and $0, $0 and $0,
respectively. For the fiscal year ended October 31, 1998, AIM and/or INVESCO
(NY), Inc. reimbursed the Financial Services Portfolio, Infrastructure Portfolio
and Resources Portfolio for their respective investment management and
administration fees in the amounts of $0, $193,053 and $244,561, respectively.
For the fiscal years ended October 31, 1996 and 1997, INVESCO (NY), Inc.
reimbursed the Consumer Products Portfolio for investment management and
administration fees in the amounts of $0 and $0, respectively. For the fiscal
year ended October 31, 1998, AIM and/or INVESCO (NY), Inc. reimbursed the
Consumer Products Portfolio for investment management and administration fees in
the amount of $0. All expense reimbursements, if any, are made at the Fund
level.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
A description of the Portfolios' brokerage allocation and other practices
is incorporated herein by reference from the section entitled "Execution of
Portfolio Transactions" in the Feeder's Part B.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
Under the Master Portfolio's Agreement and Declaration of Trust, the
Trustees are authorized to issue beneficial interests in separate subtrusts or
"series" of the Master Portfolio. The Master Portfolio currently has four series
(i.e., the Portfolios). The Master Portfolio reserves the right to create and
issue additional series. An investor in a Portfolio is entitled to participate
PRO RATA in distributions of the Portfolio's income and gains and to be
allocated a PRO RATA share of the Portfolio's income, gains, losses, deductions,
and credits. Upon liquidation or dissolution of a Portfolio, investors are
entitled to share PRO RATA in that Portfolio's net assets available for
distribution to its investors. Investments in each Portfolio may not be
transferred, but an investor may withdraw all or any portion of its investment
at any time at net asset value. Investments in a Portfolio have no preference,
preemptive, conversion or similar rights.
Under Delaware law, the AIM Global Financial Services Fund ("Financial
Services Fund"), AIM Global Resources Fund ("Resources Fund"), AIM Global
Infrastructure Fund, ("Infrastructure Fund"), AIM Global Consumer Products and
Services Fund ("Consumer Produces Fund"), and other entities investing in the
Portfolios enjoy the same limitations of liability extended to shareholders of
private, for-profit corporations. There is a remote possibility, however, that
under certain circumstances an investor in a Portfolio may be held liable for
the Portfolio's obligations. However, the Master Portfolios' Agreement and
Declaration of Trust disclaims shareholder liability for acts or obligations of
<PAGE>
the Portfolios and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Portfolio or
a trustee. The Agreement and Declaration of Trust also provides for
indemnification from the Portfolio property for all losses and expenses of any
shareholder held personally liable for the Portfolios' obligations. Thus, the
risk of an investor incurring financial loss on account of such liability is
limited to circumstances in which the Portfolios themselves would be unable to
meet their obligations and where the other party was held not to be bound by the
disclaimer. The Agreement and Declaration of Trust also provides that each
Portfolio shall maintain appropriate insurance (for example, fidelity bonding
and errors and omissions insurance) covering certain kinds of potential
liabilities. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the investor's Portfolio itself was unable to meet its
obligations.
Each investor in a Portfolio is entitled to vote in proportion to the
amount of its investment in that Portfolio. Investors in the Portfolios will all
vote together in certain circumstances (e.g., election of the Trustees and
auditors, and as required by the 1940 Act and the rules thereunder). Investors
in a Portfolio do not have cumulative voting rights, and investors holding more
than 50% of the aggregate beneficial interest in the Master Portfolio or in a
Portfolio, as the case may be, may control the outcome of these votes. Investors
also have under certain circumstances the right to remove one or more Trustees
without a meeting. The Master Portfolio is not required to hold annual meetings
of investors but the Master Portfolio will hold special meetings of investors
when in the judgment of the Master Portfolio's Trustees it is necessary or
desirable to submit matters for an investor vote. No amendment may be made to
the Master Portfolio's Agreement and Declaration of Trust without the
affirmative majority vote of investors (with the vote of each being in
proportion to the amount of its investment).
As of the date of this Registration Statement, AIM Investment Funds owns a
majority interest in the Master Portfolio and each Portfolio. However, AIM
Investment Funds has undertaken that, with respect to most matters on which the
Master Portfolio seeks a vote of its interestholders, AIM Investment Funds will
seek a vote of its shareholders and will vote its interest in the Master
Portfolio in accordance with their instructions.
The Master Portfolio or any Portfolio may be terminated by (1) "the vote
of a majority of the outstanding voting securities" (as defined in the 1940 Act)
of the Master Portfolio or the affected Portfolio, respectively, or (2) if there
are fewer than 100 record owners of a beneficial interest in the Master
Portfolio or of such terminating Portfolio, the Trustees pursuant to written
notice to the record owners of the Master Portfolio or the affected Portfolio.
The Trustees may cause (i) the Master Portfolio or one or more of its Portfolios
to the extent consistent with applicable law to sell all or substantially all of
its assets, or be merged into or consolidated with another business trust or
company, (ii) the beneficial interests of a record owner in the Master Portfolio
or any Portfolio to be converted into beneficial interests in another business
trust (or series thereof) created pursuant to Section 10.4 of Article X of the
Master Portfolio's Agreement and Declaration of Trust, or (iii) the beneficial
interests of a record owner of the Master Portfolio to be exchanged under or
pursuant to any state or federal statute to the extent permitted by law. In all
respects not governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to accomplish a sale
<PAGE>
of assets, merger or consolidation including the power to create one or more
separate business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of interests in the Trust or any Portfolio into beneficial interests
in such separate business trust or trusts (or series or class thereof).
The Agreement and Declaration of Trust provides that obligations of each
Portfolio are not binding upon the Trustees individually but only upon the
property of that Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Agreement and Declaration of Trust
protects a Trustee against any liability to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office. The
Agreement and Declaration of Trust provides that the Trustees and officers will
be indemnified by the Master Portfolio against liabilities and expenses incurred
in connection with litigation in which they may be involved because of their
offices with the Master Portfolio, unless, as to liability to the Master
Portfolio or its investors, it is finally adjudicated that they engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in their offices, or unless with respect to any other matter it
is finally adjudicated that they did not act in good faith in the reasonable
belief that their actions were in the best interests of the Master Portfolio. In
the case of settlement, such indemnification will not be provided unless it has
been determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a written
opinion of independent counsel, that such officers or Trustees have not engaged
in willful misfeasance, bad faith, gross negligence or reckless disregard of
their duties.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
Beneficial interests in each Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended.
Information on the method followed by the Portfolios in determining their
net asset value and the timing of such determination is incorporated by
reference from the section entitled "Net Asset Value Determination" in the
Feeder's Part B. See also Item 7 in Part A.
Each Portfolio reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase order by
making payment in whole or in part in readily marketable securities chosen by
that Portfolio and valued as they are for purposes of computing the Portfolio's
net asset value (a redemption in kind). If payment is made in securities, an
investor may incur transaction expenses in converting these securities into
cash. Each Portfolio has elected, however, to be governed by Rule 18f-1 under
the 1940 Act as a result of which each Portfolio is obligated to redeem
beneficial interests with respect to any one investor during any 90 day period,
solely in cash up to the lesser of $250,000 or 1% of the net asset value of that
Portfolio at the beginning of the period.
<PAGE>
Each investor in a Portfolio may add to or reduce its investment in that
Portfolio on each day that the NYSE is open for trading. At the close of
trading, on each such day, the value of each investor's interest in a Portfolio
will be determined by multiplying the net asset value of such Portfolio by the
percentage representing that investor's share of the aggregate beneficial
interests in that Portfolio. Any additions or reductions which are to be
effected on that day will then be effected. The investor's percentage of the
aggregate beneficial interests in a Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the close of trading on such day
plus or minus, as the case may be, the amount of net additions to or reductions
in the investor's investment in that Portfolio effected on such day, and (ii)
the denominator of which is the aggregate net asset value of the Portfolio as of
the close of trading on such day plus or minus, as the case may be, the amount
of the net additions to or reductions in the aggregate investments in that
Portfolio by all investors in that Portfolio. The percentage so determined will
then be applied to determine the value of the investor's interest in that
Portfolio as of the close of trading on the following day the NYSE is open for
trading.
ITEM 19. TAXATION OF THE PORTFOLIO.
Information on the taxation of the Portfolios is incorporated by reference
from the section entitled "Dividends, Distributions and Tax Matters" in the
Feeder's Part B.
ITEM 20. UNDERWRITERS.
Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
- -------------------------------
The audited financial statements of the Financial Services Portfolio, the
Infrastructure Portfolio, the Resources Portfolio and the Consumer Products
Portfolio for the fiscal year ended October 31, 1998, are included herein, in
reliance on the report of PricewaterhouseCoopers LLP, independent auditors,
given on the authority of said firm as experts in auditing and accounting.
<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
/ /
AIM GLOBAL
CONSUMER
PRODUCTS AND
SERVICES FUND
/ /
ANNUAL REPORT
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of Global Consumer Products and
Services Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of the AIM Global Consumer Products and
Services Portfolio at October 31, 1998, and the results of its operations, the
changes in its net assets and the supplementary data for the periods indicated,
in conformity with generally accepted accounting principles. These financial
statements and supplementary data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
DECEMBER 18, 1998
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
Services (43.4%)
Safeway, Inc.-/- .......................................... US 79,300 $ 3,791,531 2.2
RETAILERS-FOOD
Meyer (Fred), Inc.-/- ..................................... US 71,000 3,785,180 2.2
RETAILERS-FOOD
Telecom Italia Mobile S.p.A. .............................. ITLY 631,100 3,667,546 2.2
TELEPHONE NETWORKS
Outdoor Systems, Inc.-/- .................................. US 152,000 3,353,500 2.0
BROADCASTING & PUBLISHING
Lamar Advertising Co.-/- .................................. US 105,500 3,293,578 2.0
BROADCASTING & PUBLISHING
Cinar Films, Inc. "B"-/- {\/} ............................. CAN 152,000 3,211,000 1.9
BROADCASTING & PUBLISHING
Time Warner, Inc. ......................................... US 34,000 3,155,625 1.9
BROADCASTING & PUBLISHING
Ames Department Stores, Inc.-/- ........................... US 132,600 2,436,525 1.5
RETAILERS-OTHER
Railtrack Group PLC-/- .................................... UK 90,590 2,432,607 1.5
TRANSPORTATION - ROAD & RAIL
Loblaw Cos., Ltd. ......................................... CAN 130,300 2,428,606 1.5
RETAILERS-FOOD
Etablissements Economiques du Casino Guichard-Perrachon
S.A. ..................................................... FR 24,230 2,412,660 1.5
LEISURE & TOURISM
Clear Channel Communications, Inc.-/- ..................... US 50,400 2,296,350 1.4
BROADCASTING & PUBLISHING
Tandy Corp. ............................................... US 45,000 2,230,313 1.3
RETAILERS-OTHER
Family Dollar Stores, Inc. ................................ US 118,100 2,140,563 1.3
RETAILERS-APPAREL
Promodes .................................................. FR 3,350 2,110,602 1.3
RETAILERS-FOOD
American Stores Co. ....................................... US 59,900 1,950,494 1.2
RETAILERS-FOOD
Avis Europe PLC ........................................... UK 443,600 1,937,085 1.2
TRANSPORTATION - ROAD
Musicland Stores Corp.-/- ................................. US 137,800 1,817,238 1.1
RETAILERS-OTHER
Tricon Global Restaurants, Inc. ........................... US 40,000 1,740,000 1.0
RETAILERS-FOOD
Duane Reade, Inc.-/- ...................................... US 43,300 1,672,463 1.0
RETAILERS-OTHER
Wal-Mart Stores, Inc. ..................................... US 24,000 1,656,000 1.0
RETAILERS-OTHER
Home Depot, Inc. .......................................... US 37,800 1,644,300 1.0
RETAILERS-OTHER
Dollar Tree Stores, Inc.-/- ............................... US 41,850 1,613,841 1.0
RETAILERS-OTHER
Linens 'N Things, Inc.-/- ................................. US 52,000 1,608,750 1.0
RETAILERS-APPAREL
Gap, Inc. ................................................. US 26,000 1,563,250 0.9
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
SERVICES (Continued)
RETAILERS-APPAREL
Longs Drug Stores Corp. ................................... US 36,600 $ 1,429,688 0.9
RETAILERS-OTHER
Carnival Corp. ............................................ US 43,600 1,411,550 0.8
LEISURE & TOURISM
The Kroger Co. ............................................ US 24,000 1,332,000 0.8
RETAILERS-FOOD
Costco Companies, Inc.-/- ................................. US 19,000 1,078,250 0.6
RETAILERS-FOOD
CBS Corp. ................................................. US 35,000 977,813 0.6
BROADCASTING & PUBLISHING
American Eagle Outfitters, Inc.-/- ........................ US 22,000 891,000 0.5
RETAILERS-APPAREL
Bed Bath & Beyond-/- ...................................... US 32,000 882,000 0.5
RETAILERS-OTHER
Abercrombie & Fitch Co.-/- ................................ US 22,000 873,125 0.5
RETAILERS-APPAREL
Fred's, Inc. .............................................. US 65,500 855,594 0.5
RETAILERS-OTHER
Paychex, Inc. ............................................. US 17,000 845,750 0.5
CONSUMER SERVICES
TJX Cos., Inc. ............................................ US 43,000 814,313 0.5
RETAILERS-APPAREL
Pacific Sunwear of California-/- .......................... US 32,100 694,163 0.4
RETAILERS-APPAREL
Young & Rubicam, Inc.-/- .................................. US 13,100 342,238 0.2
BUSINESS & PUBLIC SERVICES
------------
72,377,091
------------
Consumer Non-Durables (29.8%)
Heineken N.V. ............................................. NETH 99,225 5,285,838 3.1
BEVERAGES - ALCOHOLIC
The Dial Corp. ............................................ US 157,400 4,338,338 2.6
HOUSEHOLD PRODUCTS
Philip Morris Cos., Inc. .................................. US 80,400 4,110,450 2.4
TOBACCO AND FOOD
Clorox Co. ................................................ US 35,200 3,845,600 2.3
HOUSEHOLD PRODUCTS
Compagnie Financiere Richemont AG "A" Units ............... SWTZ 2,650 3,521,335 2.1
TOBACCO
Coca-Cola Co. ............................................. US 46,000 3,110,750 1.9
BEVERAGES - NON-ALCOHOLIC
Anheuser-Busch Cos., Inc. ................................. US 52,000 3,090,750 1.9
BEVERAGES - ALCOHOLIC
Nestle S.A. - Registered .................................. SWTZ 1,372 2,916,994 1.8
FOOD
Danone .................................................... FR 10,400 2,750,887 1.7
FOOD
Adolph Coors Co. "B" ...................................... US 47,200 2,360,000 1.4
BEVERAGES - ALCOHOLIC
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
CONSUMER NON-DURABLES (29.8%) (Continued)
Quaker Oats Co. ........................................... US 37,100 $ 2,191,219 1.3
FOOD
Unilever PLC-/- ........................................... UK 212,210 2,130,266 1.3
HOUSEHOLD PRODUCTS
British American Tobacco PLC - ADR-/- ..................... US 116,600 2,120,663 1.3
TOBACCO
Diageo PLC ................................................ UK 174,500 1,883,094 1.1
BEVERAGES - ALCOHOLIC
Foster's Brewing Group Ltd. ............................... AUSL 750,000 1,842,188 1.1
BEVERAGES - ALCOHOLIC
SEITA (Societe Nationale d'Exploitation Industrielle des
Tabacs et Allumettes) .................................... FR 29,400 1,746,943 1.1
TOBACCO
The Earthgrains Co. ....................................... US 47,000 1,410,000 0.8
FOOD
Interstate Bakeries Corp. ................................. US 24,800 621,550 0.4
FOOD
Saputo Group, Inc. ........................................ CAN 13,700 293,096 0.2
FOOD
------------
49,569,961
------------
Consumer Durables (6.7%)
Microsoft Corp.-/- ........................................ US 48,900 5,177,288 3.1
COMPUTER SOFTWARE
Sonic Automotive, Inc.-/- ................................. US 91,300 1,854,531 1.1
AUTOMOBILES
Daimler Benz AG ........................................... GER 21,565 1,674,281 1.0
AUTOMOBILES
Maytag Corporation ........................................ US 31,900 1,577,056 0.9
APPLIANCES & HOUSEHOLD
Best Buy Co., Inc.-/- ..................................... US 20,000 960,000 0.6
CONSUMER ELECTRONICS
------------
11,243,156
------------
Finance (5.8%)
Fannie Mae ................................................ US 40,900 2,896,231 1.7
OTHER FINANCIAL
Axa - UAP ................................................. FR 18,850 2,131,516 1.3
INSURANCE - MULTI-LINE
Providian Financial Corp. ................................. US 21,000 1,666,875 1.0
CONSUMER FINANCE
SunAmerica, Inc. .......................................... US 22,200 1,565,100 0.9
INSURANCE - MULTI-LINE
Metris Cos., Inc. ......................................... US 44,000 1,446,500 0.9
CONSUMER FINANCE
------------
9,706,222
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
MATERIALS/BASIC INDUSTRY (3.4%)
CRH PLC ................................................... UK 212,679 $ 3,099,271 1.9
BUILDING MATERIALS & COMPONENTS
Tyco International Ltd. ................................... US 41,000 2,539,438 1.5
MISC. MATERIALS & COMMODITIES
------------
5,638,709
------------
MULTI-INDUSTRY/MISCELLANEOUS (2.6%)
General Electric Co. ...................................... US 49,400 4,322,500 2.6
------------ -----
CONGLOMERATE
TOTAL EQUITY INVESTMENTS (cost $133,549,669) ................ 152,857,639 92.1
------------ -----
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
Dated October 30, 1998, with State Street Bank & Trust Co.,
due November 2, 1998, for an effective yield of 5.30%,
collateralized by $17,540,000 U.S. Treasury Notes, 5.75%
due 9/30/99 (market value of collateral is $17,842,372,
including accrued interest). (cost $17,489,000) .......... 17,489,000 10.5
------------ -----
TOTAL INVESTMENTS (cost $151,038,669) * .................... 170,346,639 102.2
Other Assets and Liabilities ................................ (3,733,178) (2.2)
------------ -----
NET ASSETS .................................................. $166,613,461 100.0
============ =====
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $153,515,812 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 18,855,154
Unrealized depreciation: (2,024,327)
-------------
Net unrealized appreciation: $ 16,830,827
-------------
-------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The Fund's Portfolio of Investments at October 31, 1998, was concentrated in the
following countries:
PERCENTAGE OF NET ASSETS {d}
----------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ----- ------------ -----
Australia (AUSL/AUD) ................. 1.1 1.1
Canada (CAN/CAD) ..................... 3.6 3.6
France (FR/FRF) ...................... 6.9 6.9
Germany (GER/DEM) .................... 1.0 1.0
Italy (ITLY/ITL) ..................... 2.2 2.2
Netherlands (NETH/NLG) ............... 3.2 3.2
Switzerland (SWTZ/CHF) ............... 3.8 3.8
United Kingdom (UK/GBP) .............. 6.8 6.8
United States (US/USD) ............... 63.1 8.3 71.4
----- --- -----
Total ............................... 92.7 8.3 100.0
----- --- -----
----- --- -----
- --------------
{d} Percentages indicated are based on net assets of $166,613,461.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $151,038,669)................................... $170,346,639
U.S. currency................................................................. $ 535
Foreign currencies (cost $2,750,495).......................................... 2,755,656 2,756,191
----------
Receivable for securities sold............................................................ 1,546,087
Dividends and dividend withholding tax reclaims receivable................................ 150,278
Miscellaneous receivable.................................................................. 12,035
Interest receivable....................................................................... 5,148
------------
Total assets............................................................................ 174,816,378
------------
Liabilities:
Payable for securities purchased.......................................................... 8,091,057
Payable for investment management and administration fees................................. 97,291
Payable for professional fees............................................................. 5,574
Payable for custodian fees................................................................ 848
Other accrued expenses.................................................................... 8,147
------------
Total liabilities....................................................................... 8,202,917
------------
Net assets.................................................................................. $166,613,461
------------
Net assets consist of:
Paid in capital........................................................................... $115,811,555
Accumulated net investment income......................................................... 1,784,104
Accumulated net realized gain on investments and foreign currency transactions............ 29,691,611
Net unrealized appreciation on translation of assets and liabilities in foreign
currencies............................................................................... 18,221
------------
Net unrealized appreciation of investments................................................ 19,307,970
Total -- net assets applicable to beneficial interest outstanding........................... $166,613,461
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:
Dividend income (net of foreign withholding tax of $109,205)............................... $ 1,263,585
Interest income............................................................................ 727,860
Other lending income....................................................................... 61,127
-----------
Total investment income.................................................................. 2,052,572
-----------
Expenses:
Investment management and administration fees ............................................. 1,329,063
Custodian fees............................................................................. 43,690
Professional fees.......................................................................... 5,840
Other expenses............................................................................. 11,447
-----------
Total expenses before reductions......................................................... 1,390,040
-----------
Expense reductions..................................................................... (40,195)
-----------
Total net expenses....................................................................... 1,349,845
-----------
Net investment income........................................................................ 702,727
-----------
Net realized and unrealized gain on investments and foreign currencies:
Net realized gain on investments.............................................. 4,701,157
Net realized loss on foreign currency transactions............................ (45,712)
-----------
Net realized gain during the year........................................................ 4,655,445
Net change in unrealized appreciation on translation of assets and liabilities
in foreign currencies........................................................ 13,162
Net change in unrealized appreciation of investments.......................... 10,759,527
-----------
Net unrealized appreciation during the year.............................................. 10,772,689
-----------
Net realized and unrealized gain on investments and foreign currencies....................... 15,428,134
-----------
Net increase in net assets resulting from operations......................................... $16,130,861
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
--------------- ---------------
Increase (Decrease) in net assets
Operations:
Net investment income................................................................... $ 702,727 $ 847,035
Net realized gain on investments and foreign currency transactions...................... 4,655,445 16,167,449
Net change in unrealized appreciation on translation of assets and liabilities in
foreign currencies..................................................................... 13,162 5,172
Net change in unrealized appreciation (depreciation) of investments..................... 10,759,527 (714,518)
--------------- ---------------
Net increase in net assets resulting from operations.................................. 16,130,861 16,305,138
--------------- ---------------
Beneficial interest transactions:
Contributions........................................................................... 32,490,022 53,941,866
Withdrawals............................................................................. (44,623,457) (77,923,852)
--------------- ---------------
Net decrease from beneficial interest transactions.................................... (12,133,435) (23,981,986)
--------------- ---------------
Total increase (decrease) in net assets................................................... 3,997,426 (7,676,848)
Net assets:
Beginning of year....................................................................... 162,616,460 170,292,882
--------------- ---------------
End of year............................................................................. $166,613,034 $162,616,034
--------------- ---------------
--------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DECEMBER 30, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
---------------------------------- OPERATIONS)
1998 1997 1996 TO OCTOBER 31, 1995
---------- ---------- ---------- ---------------------------
Ratios and supplemental data:
Net assets, end of period in (in 000's)...................... $ 166,613 $ 162,616 $ 170,293 $ 6,502
Ratio of net investment income to
average net assets.......................................... 0.38% 0.51% 0.39% 0.30% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 4)............................... 0.74% 0.61% 0.72% 2.37% (a)
Without expense reductions and/or reimbursement............ 0.76% 0.76% 0.83% 2.44% (a)
Portfolio turnover rate...................................... 221% 392% 169% 240% (a)
</TABLE>
- ----------------
(a) Annualized
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
Global Consumer Products and Services Portfolio, (the "Portfolio") is organized
as a subtrust of Global Investment Portfolio, a Delaware business trust and is
registered under the 1940 Act as an open-end management investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Portfolio in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
The Portfolio calculates the net asset value of and completes orders to
purchase, exchange or repurchase Portfolio shares of beneficial interest on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by AIM Advisors, Inc. (the
"Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Trust's Board of Trustees.
<PAGE>
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Trust's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund and Portfolio are maintained in U.S. dollars.
The market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolio after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
The Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
<PAGE>
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities".
The Portfolio could be exposed to risk if a counter party is unable to meet the
terms of the contract or if the value of the currency changes unfavorably. The
Portfolio may enter into Forward Contracts in connection with planned purchases
or sales of securities, or to hedge against adverse fluctuations in exchange
rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers, unless a quotation
from only one broker is available, in which case only that broker's price will
be used. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security and the
liability related to such option is extinguished. If a written call option is
exercised, a gain or loss is realized from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the underlying security
purchased would be decreased by the premium originally received. The Portfolio
can write options only on a covered basis, which, for a call, requires that the
Portfolio hold the underlying security and, for a put, requires the Portfolio to
set aside cash, U.S. government securities or other liquid securities in an
amount not less than the exercise price, or otherwise provide adequate cover at
all times while the put option is outstanding. The Portfolio may use options to
manage its exposure to the stock market and to fluctuations in currency values
or interest rates.
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
<PAGE>
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1998, stocks with an aggregate value of $23,872,564 were on loan
to brokers. The loans were secured by cash collateral of $24,380,125 received by
the Portfolio.
For international securities, cash collateral is received by the Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
<PAGE>
(I) TAXES
It is the intended policy of the Portfolio to meet the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). Therefore, no provision has been made for
Federal taxes on income, capital gains, unrealized appreciation of securities
held, or excise tax on income and capital gains.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Portfolio's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
In addition, the Portfolio's policy of concentrating its investments in
companies in the consumer products and services industry subject the Portfolio
to greater risk than a fund that is more diversified.
(K) INDEXED SECURITIES
The Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered.
<PAGE>
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult.
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager"), an indirect wholly-owned subsidiary of
AMVESCAP PLC, is the Portfolio's investment manager and administrator.
The Portfolio pays investment management and administration fees to the Manager
at the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. These fees are computed daily and paid
monthly.
The Trust pays each Trustee who is not an employee, officer or director of the
Manager, or any other affiliated company, $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $340,437,744 and $336,491,637, respectively.
For the year ended October 31, 1998, purchases and sales of U.S. government
obligations aggregated $34,683,892 and $33,938,540, respectively.
4. EXPENSE REDUCTIONS
The manager has directed certain portfolio trades to brokers who then paid a
portion of the Portfolio's expenses. For the year ended October 31, 1998, the
Portfolio's expenses were reduced by $40,195 under these arrangements.
<PAGE>
BOARD OF TRUSTEES
C. Derek Anderson
President, Plantagenet Capital
Management, LLC (an investment
partnership); Chief Executive Officer,
Plantagenet Holdings, Ltd.
(an investment banking firm)
Frank S. Bayley
Partner, law firm of
Baker & McKenzie
Robert H. Graham
President and Chief Executive Officer,
A I M Management Group Inc.
Arthur C. Patterson
Managing Partner, Accel Partners
(a venture capital firm)
Ruth H. Quigley
Private Investor
OFFICERS
Robert H. Graham
Chairman and President
Helge K. Lee
Vice President & Secretary
Dana R. Sutton
Vice President & Assistant Treasurer
Kenneth W. Chancey
Vice President &
Principal Accounting Officer
John J. Arthur
Vice President
Melville B. Cox
Vice President
Gary T. Crum
Vice President
Carol F. Relihan
Vice President
David P. Hess
Assistant Secretary
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Pamela Ruddock
Assistant Treasurer
Paul Wozniak
Assistant Treasurer
OFFICE OF THE FUND
11 Greenway Plaza
Suite 100
Houston, TX 77046
<PAGE>
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
COUNSEL TO THE FUND
Kirkpatrick & Lockhart, LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL OF THE TRUSTEES
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of Global Financial Services
Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Global Financial Services
Portfolio at October 31, 1998, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
DECEMBER 18, 1998
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
Banks-Regional (29.1%)
Allied Irish Bank PLC: ..................................... IRE -- -- 2.8
Common{V} ................................................ -- 98,797 $ 1,413,275 --
Common ................................................... -- 79,460 1,147,550 --
First Union Corp. (N.C.) ................................... US 42,433 2,461,114 2.8
GreenPoint Financial Corp. ................................. US 66,200 2,172,188 2.5
Bank of Ireland ............................................ IRE 111,659 2,063,410 2.4
City National Corp. ........................................ US 52,550 1,796,553 2.0
Crestar Financial Corp. .................................... US 21,800 1,436,075 1.6
Sparebanken NOR (Union Bank of Norway) ..................... NOR 71,436 1,359,391 1.6
Norwest Corp. .............................................. US 35,000 1,301,563 1.5
St. George Bank Ltd. ....................................... AUSL 191,555 1,277,672 1.5
Bayerische Vereinsbank ..................................... GER 16,070 1,276,784 1.4
Bank of Nova Scotia ........................................ CAN 54,600 1,139,786 1.3
North Fork Bancorporation, Inc. ............................ US 50,000 993,750 1.2
Sovereign Bancorp, Inc. .................................... US 73,840 969,150 1.1
Fleet Financial Group, Inc. ................................ US 24,000 958,500 1.1
TeleBanc Financial Corp.-/- ................................ US 52,100 950,825 1.1
UnionBanCal Corp. .......................................... US 8,000 740,000 0.9
Halifax PLC ................................................ UK 49,600 657,239 0.8
Banco Commercial S.A.: ..................................... URGY -- -- 0.8
144A GDR(::) {.} {\/} .................................... -- 15,300 306,000 --
Reg S GDR{c} {\/} ........................................ -- 15,200 304,000 --
Banca Turco Romana S.A. - Reg S GDR-/- {c} {\/} ............ ROM 88,000 402,600 0.5
ForeningsSparbanken AB ..................................... SWDN 5,750 155,933 0.2
-----------
25,283,358
-----------
Banks-Money Center (18.1%)
Citigroup, Inc. ............................................ US 39,925 1,878,970 2.1
BankAmerica Corp. .......................................... US 30,143 1,731,339 2.0
HSBC Holdings PLC .......................................... UK 59,990 1,405,153 1.6
UBS AG - Registered ........................................ SWTZ 4,836 1,326,276 1.5
Lloyds TSB Group PLC ....................................... UK 101,401 1,251,183 1.5
ABN AMRO Holdings N.V. ..................................... NETH 56,347 1,055,865 1.2
Deutsche Bank AG ........................................... GER 14,770 919,165 1.1
Mellon Bank Corp. .......................................... US 14,600 877,825 1.0
National Australia Bank Ltd. ............................... AUSL 66,137 876,315 1.0
Bank Hapoalim Ltd. ......................................... ISRL 483,000 873,834 1.0
Chase Manhattan Corp. ...................................... US 14,500 823,781 1.0
Istituto Banc San Paolo Tori-/- ............................ ITLY 55,000 817,042 1.0
Anglo-Irish Bank Corp., PLC{V} ............................. IRE 325,168 783,406 0.9
Barclays PLC ............................................... UK 25,000 538,314 0.6
Dresdner Bank AG ........................................... GER 13,620 530,778 0.6
-----------
15,689,246
-----------
Other Financial (14.2%)
Newcourt Credit Group, Inc. ................................ CAN 74,400 2,447,844 2.7
Fannie Mae ................................................. US 31,000 2,195,188 2.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
Other Financial (Continued)
Doral Financial Corp. ...................................... US 102,400 $ 1,792,000 2.1
Investors Financial Services Corp. ......................... US 25,500 1,373,813 1.6
UniCapital Corp.-/- ........................................ US 160,000 1,110,000 1.3
ING Groep N.V. ............................................. NETH 20,035 969,678 1.1
Merita Ltd. "A" ............................................ FIN 178,850 963,107 1.1
Fidelity National Financial, Inc. .......................... US 22,000 676,500 0.8
Household International, Inc. .............................. US 12,752 466,245 0.5
Shohkoh Fund ............................................... JPN 1,200 365,590 0.4
-----------
12,359,965
-----------
Consumer Finance (11.6%)
Providian Financial Corp. .................................. US 46,000 3,651,249 4.2
Capital One Financial Corp. ................................ US 19,600 1,994,300 2.3
Aeon Credit Service ........................................ HK 8,894,000 1,481,472 1.7
Acom Co., Ltd. ............................................. JPN 20,000 1,118,941 1.3
Metris Cos., Inc. .......................................... US 30,000 986,250 1.1
American Express Co. ....................................... US 9,500 839,563 1.0
-----------
10,071,775
-----------
Insurance - Multi-Line (10.8%)
SunAmerica, Inc. ........................................... US 47,800 3,369,899 3.9
Allianz AG ................................................. GER 7,503 2,574,892 3.0
Allstate Corp. ............................................. US 44,400 1,911,975 2.2
Axa - UAP .................................................. FR 13,150 1,486,973 1.7
-----------
9,343,739
-----------
Insurance-Life (3.2%)
Conseco, Inc. .............................................. US 44,155 1,531,627 1.7
AEGON N.V. ................................................. NETH 14,457 1,254,674 1.5
-----------
2,786,301
-----------
Securities Broker (3.1%)
Athlon Groep N.V. .......................................... NETH 55,670 1,579,671 1.8
Knight/Trimark Group, Inc. "A"-/- .......................... US 138,200 1,122,875 1.3
Peregrine Investment Holdings Ltd.(::) ..................... HK 532,000 -- --
-----------
2,702,546
-----------
Investment Management (2.0%)
Alliance Capital Management L.P. ........................... US 68,800 1,707,100 2.0
-----------
Banks-Super Regional (1.0%)
Abbey National PLC ......................................... UK 44,000 855,412 1.0
-----------
Consumer Services (0.8%)
Rent-Way, Inc.-/- .......................................... US 30,000 708,750 0.8
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Transportation - Road (0.7%)
Avis Rent A Car, Inc.-/- ................................... US 30,000 $ 611,250 0.7
----------- -----
TOTAL EQUITY INVESTMENTS (cost $72,533,065) .................. 82,119,442 94.6
----------- -----
PRINCIPAL
FIXED INCOME INVESTMENTS CURRENCY AMOUNT
- -------------------------------------------------------------- -------- -----------
Corporate Bonds (2.4%)
United States (2.4%)
Citicorp, 7.125% due 6/1/03 .............................. USD 1,000,000 1,053,240 1.2
BankAmerica Corp., 6.85% due 3/1/03 ...................... USD 1,000,000 1,037,530 1.2
-----------
Total Corporate Bonds (cost $2,085,050) ...................... 2,090,770
----------- -----
TOTAL FIXED INCOME INVESTMENTS (cost $2,085,050) ............. 2,090,770 2.4
----------- -----
REPURCHASE AGREEMENT
- --------------------------------------------------------------
Dated October 30, 1998, with State Street Bank & Trust Co.,
due November 2, 1998, for an effective yield of 5.30%,
collateralized by $3,475,000 U.S. Treasury Notes, 5.75% due
9/30/99 (market value of collateral is $3,534,906,
including accrued interest). (cost $3,464,000) ............ 3,464,000 4.0
----------- -----
TOTAL INVESTMENTS (cost $78,082,115) * ...................... 87,674,212 101.0
Other Assets and Liabilities ................................. (862,586) (1.0)
----------- -----
NET ASSETS ................................................... $86,811,626 100.0
----------- -----
----------- -----
</TABLE>
- --------------
{V} Security is denominated in GBP.
-/- Non-income producing security.
(::) Valued in good faith at fair value using procedures approved by the
Board of Trustees (See Note 1 of Notes to Financial Statements).
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
* For Federal income tax purposes, cost is $79,608,503 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 13,063,563
Unrealized depreciation: (4,997,854)
-------------
Net unrealized appreciation: $ 8,065,709
=============
Abbreviation:
GDR--Global Depositary Receipt
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1998, was concentrated in the
following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/ CURRENCY CODE) EQUITY FIXED INCOME & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 2.5 2.5
Canada (CAN/CAD) ..................... 4.0 4.0
Finland (FIN/FIM) .................... 1.1 1.1
France (FR/FRF) ...................... 1.7 1.7
Germany (GER/DEM) .................... 6.1 6.1
Hong Kong (HK/HKD) ................... 1.7 1.7
Ireland (IRE/IEP) .................... 6.1 6.1
Israel (ISRL/ILS) .................... 1.0 1.0
Italy (ITLY/ITL) ..................... 1.0 1.0
Japan (JPN/JPY) ...................... 1.7 1.7
Netherlands (NETH/NLG) ............... 5.6 5.6
Norway (NOR/NOK) ..................... 1.6 1.6
Romania (ROM/ROL) .................... 0.5 0.5
Sweden (SWDN/SEK) .................... 0.2 0.2
Switzerland (SWTZ/CHF) ............... 1.5 1.5
United Kingdom (UK/GBP) .............. 5.5 5.5
United States (US/USD) ............... 52.2 2.4 3.0 57.4
Uruguay (URGY/UYP) ................... 0.8 0.8
------ ----- ----- -----
Total ............................... 94.6 2.4 2.6 100.0
====== ===== ===== =====
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $86,811,626.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1998
<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO BUY: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Australian Dollars...................... 1,062,858 1.57888 11/27/98 $ (13,854)
Canadian Dollars........................ 2,366,270 1.54610 11/24/98 5,491
Canadian Dollars........................ 1,147,479 1.54560 11/24/98 2,293
-------------- --------------
Total Contracts to Buy (Payable amount
$4,582,677).......................... 4,576,607 (6,070)
-------------- --------------
THE VALUE OF CONTRACTS TO BUY AS A
PERCENTAGE OF NET ASSETS IS 5.27%.
10
<PAGE>
CONTRACTS TO SELL:
- ----------------------------------------
Australian Dollars...................... 2,313,279 1.72236 11/27/98 (165,059)
Canadian Dollars........................ 3,662,856 1.52600 11/24/98 39,634
Canadian Dollars........................ 1,147,479 1.52600 11/24/98 12,416
Japanese Yen............................ 859,402 144.60000 11/12/98 (167,839)
-------------- --------------
Total Contracts to Sell (Receivable
amount $7,702,168)................... 7,983,016 (280,848)
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS A
PERCENTAGE OF NET ASSETS IS 9.23%.
Total Open Forward Foreign Currency
Contracts, Net....................... $ (286,918)
--------------
--------------
</TABLE>
- ----------------
See Note 1 of Notes to the Financial Statements.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $78,082,115)......................................... $87,674,212
U.S. currency....................................................................... $ 938
Foreign currencies (cost $4,377).................................................... 4,380 5,318
---------
Receivable for securities sold................................................................. 4,129,995
Dividends and dividend withholding tax reclaims receivable..................................... 88,587
Interest receivable............................................................................ 42,125
Miscellaneous receivable....................................................................... 2,937
----------
Total assets................................................................................. 91,943,174
----------
Liabilities:
Payable for securities purchased............................................................... 4,776,801
Payable for open forward foreign currency contracts, net....................................... 286,918
Payable for investment management and administration fees...................................... 49,670
Payable for professional fees.................................................................. 4,501
Payable for custodian fees..................................................................... 924
Other accrued expenses......................................................................... 12,734
----------
Total liabilities............................................................................ 5,131,548
----------
Net assets....................................................................................... $86,811,626
----------
----------
Net assets consist of:
Paid in capital................................................................................ $71,419,084
Accumulated net investment income.............................................................. 2,867,663
Accumulated net realized loss on investments and foreign currency transactions................. 3,218,875
Net unrealized depreciation on translation of assets and liabilities in foreign currencies..... (286,093)
Net unrealized appreciation of investments..................................................... 9,592,097
----------
Total -- representing net assets applicable to capital shares outstanding........................ $86,811,626
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:)
Dividend income (net of foreign withholding tax of $137,628)................................. $2,001,511
Interest income.............................................................................. 272,885
Securities lending income.................................................................... 74,782
----------
Total investment income.................................................................... 2,349,178
---------
Expenses:
Investment management and administration fees................................................ 726,002
Custodian fees............................................................................... 31,835
Professional fees............................................................................ 3,205
Other expenses............................................................................... 9,222
---------
Total expenses before reductions........................................................... 768,264
---------
Expense reductions (Note 5).............................................................. (15,228)
---------
Total net expenses......................................................................... 753,036
---------
Net investment income.......................................................................... 1,596,142
---------
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized gain (loss) on investments.......................................... (1,401,803)
Net realized gain on foreign currency transactions............................... 698,914
----------
Net realized loss during the year.......................................................... (702,889)
Net change in unrealized depreciation on translation of assets and liabilities in
foreign currencies.............................................................. (351,998)
Net change in unrealized appreciation of investments............................. 1,750,599
----------
Net unrealized appreciation during the year................................................ 1,398,601
---------
Net realized and unrealized gain on investments and foreign currencies......................... 695,712
---------
Net increase in net assets resulting from operations........................................... $2,291,854
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
----------- -----------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income........................................................ $ 1,596,142 $ 839,144
Net realized gain on investments and foreign currency transactions........... (702,889) 2,628,562
Net change in unrealized appreciation (depreciation) on translation of assets
and liabilities in foreign currencies....................................... (351,998) 58,275
Net change in unrealized appreciation of investments......................... 1,750,599 6,449,986
----------- -----------
Net increase in net assets resulting from operations....................... 2,291,854 9,975,967
----------- -----------
Beneficial interest transactions:
Contributions................................................................ 72,019,286 87,995,110
Withdrawals.................................................................. (67,746,313) (34,197,555)
----------- -----------
Net increase from beneficial interest transactions......................... 4,272,973 53,797,555
----------- -----------
Total increase in net assets................................................... 6,564,827 63,773,522
Net assets:
Beginning of year............................................................ 80,246,799 16,473,277
----------- -----------
End of year.................................................................. $86,811,626 $80,246,799
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------------------ OPERATIONS) TO
1998 1997 1996 1995 OCTOBER 31, 1994
---------- ---------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 86,812 $ 80,247 $ 16,473 $ 9,793 $ 5,176
Ratio of net investment income (loss) to
average net assets..................... 1.59% 1.76% 1.90% 2.60% 1.19 % (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 4).......... 0.75% 0.77% 0.86% 1.43% 4.43 % (a)
Without expense reductions and/or
reimbursement........................ 0.77% 0.84% 0.94% 1.46% N/A
Portfolio turnover rate................. 111% 91% 103% 170% 53 % (a)
</TABLE>
- ----------------
(a) Annualized
N/A Not applicable
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
Global Financial Services Portfolio, (the "Portfolio") is organized as a
Delaware business trust and is registered under the subtrust of Global
Investment Portfolio, a 1940 Act as an open-end management investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
The Portfolio calculates the net asset value of and completes orders to
purchase, exchange or repurchase Portfolio shares on each business day, with the
exception of those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined the securities are valued on
the exchange determined by the AIM Advisor, Inc. ("the Manager") to be the
primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Trust's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Trust's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolio are maintained in U.S. dollars. The
market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolio after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
The Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
<PAGE>
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities".
The Portfolio could be exposed to risk if a counter party is unable to meet the
terms of the contract or if the value of the currency changes unfavorably. The
Portfolio may enter into Forward Contracts in connection with planned purchases
or sales of securities, or to hedge against adverse fluctuations in exchange
rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers, unless a quotation
from only one broker is available, in which case only that broker's price will
be used. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security and the
liability related to such option is extinguished. If a written call option is
exercised, a gain or loss is realized from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the underlying security
purchased would be decreased by the premium originally received. The Portfolio
can write options only on a covered basis, which, for a call, requires that the
Portfolio hold the underlying security and, for a put, requires the Portfolio to
set aside cash, U.S. government securities or other liquid securities in an
amount not less than the exercise price, or otherwise provide adequate cover at
all times while the put option is outstanding. The Portfolio may use options to
manage its exposure to the stock market and to fluctuations in currency values
or interest rates.
<PAGE>
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1998, stocks with an aggregate value of $6,839,546 were on loan
to brokers. The loans were secured by cash collateral of $6,903,878 received by
the Portfolio.
<PAGE>
For international securities, cash collateral is received by the Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
(I) TAXES
It is the intended policy of the Portfolio to meet the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). Therefore, no provision has been made for
Federal taxes on income, capital gains, unrealized appreciation of securities
held, or excise tax on income and capital gains.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Portfolio's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
In addition, the Portfolio's policy of concentrating its investments in
companies in the financial services industry subject the Portfolio to greater
risk than a fund that is more diversified.
(K) INDEXED SECURITIES
The Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager"), an indirect wholly-owned subsidiary of
AMVESCAP PLC, is the Fund's and Portfolio's investment manager and
administrator.
The Portfolio pays investment management and administration fees to the Manager
at the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. These fees are computed daily and paid
monthly.
The Trust pays each Trustee who is not an employee, officer or director of the
Manager, or any other affiliated company, $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $110,772,267 and $103,481,033, respectively.
For the year ended October 31, 1998, there were no purchases and sales of U.S.
government obligations.
4. EXPENSE REDUCTIONS
The manager has directed certain portfolio trades to brokers who then paid a
portion of the Portfolio's expenses. For the year ended October 31, 1998, the
Portfolio's expenses were reduced by $15,228 under these arrangements.
<PAGE>
BOARD OF TRUSTEES
C. Derek Anderson
President, Plantagenet Capital
Management, LLC (an investment
partnership); Chief Executive Officer,
Plantagenet Holdings, Ltd.
(an investment banking firm)
Frank S. Bayley
Partner, law firm of
Baker & McKenzie
Robert H. Graham
President and Chief Executive Officer,
A I M Management Group Inc.
Arthur C. Patterson
Managing Partner, Accel Partners
(a venture capital firm)
Ruth H. Quigley
Private Investor
OFFICERS
Robert H. Graham
Chairman and President
Helge K. Lee
Vice President & Secretary
Dana R. Sutton
Vice President & Assistant Treasurer
Kenneth W. Chancey
Vice President &
Principal Accounting Officer
John J. Arthur
Vice President
Melville B. Cox
Vice President
Gary T. Crum
Vice President
Carol F. Relihan
Vice President
David P. Hess
Assistant Secretary
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Pamela Ruddock
Assistant Treasurer
Paul Wozniak
Assistant Treasurer
OFFICE OF THE FUND
11 Greenway Plaza
Suite 100
Houston, TX 77046
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
<PAGE>
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
COUNSEL TO THE FUND
Kirkpatrick & Lockhart, LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL OF THE TRUSTEES
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
<PAGE>
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of Global Infrastructure Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of the Global Infrastructure Portfolio at
October 31, 1998, and the results of its operations, the changes in its net
assets and the supplementary data for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
supplementary data are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements based on our
audits. We conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
DECEMBER 18, 1998
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Energy (35.1%)
AES Corp.-/- ............................................... US 48,264 $ 1,975,808 3.0
ELECTRICAL & GAS UTILITIES
Enron Corp. ................................................ US 35,001 1,846,303 2.9
GAS PRODUCTION & DISTRIBUTION
Houston Industries, Inc. ................................... US 59,000 1,832,688 2.8
ELECTRICAL & GAS UTILITIES
Dominion Resources, Inc. ................................... US 38,000 1,755,125 2.8
ELECTRICAL & GAS UTILITIES
Endesa S.A. - ADR{\/} ...................................... SPN 68,400 1,739,925 2.8
ELECTRICAL & GAS UTILITIES
Pinnacle West Capital Corp. ................................ US 32,000 1,402,000 2.2
ELECTRICAL & GAS UTILITIES
National Grid Group PLC .................................... UK 200,000 1,368,580 2.2
ELECTRICAL & GAS UTILITIES
Edison S.p.A. .............................................. ITLY 150,000 1,325,549 2.1
ELECTRICAL & GAS UTILITIES
BG PLC ..................................................... UK 200,000 1,310,022 2.1
ELECTRICAL & GAS UTILITIES
Union Electrica Fenosa S.A.-/- ............................. SPN 60,000 973,652 1.5
ELECTRICAL & GAS UTILITIES
Texas Utilities Co. ........................................ US 20,000 875,000 1.4
ELECTRICAL & GAS UTILITIES
EVN Energie-Versorgung Niederoesterreich AG ................ ASTRI 5,600 798,420 1.3
ELECTRICAL & GAS UTILITIES
Montana Power Co. .......................................... US 18,000 779,625 1.2
ELECTRICAL & GAS UTILITIES
Interstate Energy Corp. .................................... US 23,740 734,456 1.2
ELECTRICAL & GAS UTILITIES
GPU, Inc. .................................................. US 16,000 690,000 1.1
ELECTRICAL & GAS UTILITIES
Public Service Enterprise Group, Inc. ...................... US 17,000 646,000 1.0
ELECTRICAL & GAS UTILITIES
EDP-Electricidade de Portugal S.A. ......................... PORT 25,400 638,739 1.0
ELECTRICAL & GAS UTILITIES
USEC, Inc.-/- .............................................. US 39,600 579,150 0.9
ENERGY SOURCES
Viag AG .................................................... GER 800 543,774 0.9
ELECTRICAL & GAS UTILITIES
El Paso Energy Corp. ....................................... US 12,400 439,425 0.7
GAS PRODUCTION & DISTRIBUTION
Hub Power Co. .............................................. PAK 400 79 --
ELECTRICAL & GAS UTILITIES
-----------
22,254,320
-----------
Services (29.3%)
Vivendi .................................................... FR 11,982 2,737,841 4.3
CONSUMER SERVICES
Mannesmann AG .............................................. GER 19,000 1,871,186 2.9
WIRELESS COMMUNICATIONS
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Services (Continued)
Telecom Italia SpA - Di Risp ............................... ITLY 300,000 $ 1,519,597 2.4
TELEPHONE NETWORKS
SBC Communications ......................................... US 29,000 1,343,063 2.1
TELEPHONE - REGIONAL/LOCAL
Portugal Telecom S.A. - ADR{\/} ............................ PORT 28,000 1,323,000 2.1
TELEPHONE NETWORKS
Bell Atlantic Corp. ........................................ US 22,000 1,168,750 1.9
TELEPHONE - REGIONAL/LOCAL
MCI WorldCom, Inc.-/- ...................................... US 20,000 1,105,000 1.8
TELEPHONE NETWORKS
Comair Holdings, Inc. ...................................... US 32,300 1,061,863 1.7
TRANSPORTATION - AIRLINES
Swisscom AG-/- ............................................. SWTZ 2,671 905,056 1.4
TELEPHONE NETWORKS
Tele-Communications, Inc. "A"-/- ........................... US 20,000 842,500 1.3
CABLE TELEVISION
Equant N.V.-/- {\/} ........................................ NETH 18,880 826,000 1.3
TELEPHONE NETWORKS
Brisa-Auto Estradas de Portugal S.A. ....................... PORT 16,000 744,230 1.2
TRANSPORTATION - ROAD & RAIL
Canadian National Railway Co. .............................. CAN 12,800 639,378 1.0
TRANSPORTATION - ROAD & RAIL
Aeroporti di Roma SpA ...................................... ITLY 96,000 600,615 1.0
TRANSPORTATION - AIRLINES
Deutsche Lufthansa AG ...................................... GER 20,000 435,019 0.7
TRANSPORTATION - AIRLINES
AirTouch Communications, Inc.-/- ........................... US 7,100 397,600 0.6
WIRELESS COMMUNICATIONS
AMR Corp.-/- ............................................... US 5,700 381,900 0.6
TRANSPORTATION - AIRLINES
Stagecoach Holdings PLC .................................... UK 96,000 372,628 0.6
TRANSPORTATION - ROAD & RAIL
RailWorks Corp.-/- ......................................... US 23,700 157,013 0.2
TRANSPORTATION - ROAD & RAIL
China Telecom (Hong Kong) Ltd.-/- .......................... HK 80,000 150,300 0.2
WIRELESS COMMUNICATIONS
Hellenic Telecommunication Organization S.A. (OTE) ......... GREC 11 250 --
TELEPHONE NETWORKS
-----------
18,582,789
-----------
Capital Goods (11.1%)
Kaufman and Broad Home Corp. ............................... US 42,000 1,199,625 1.8
CONSTRUCTION
Gulfstream Aerospace Corp.-/- .............................. US 25,000 1,106,250 1.8
AEROSPACE/DEFENSE
General Electric Co. PLC ................................... UK 122,500 978,647 1.6
AEROSPACE/DEFENSE
Nokia Oyj "A" - ADR{\/} .................................... FIN 10,000 930,625 1.5
TELECOM EQUIPMENT
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Capital Goods (Continued)
United Technologies Corp. .................................. US 7,000 $ 666,750 1.1
AEROSPACE/DEFENSE
Tellabs, Inc.-/- ........................................... US 12,000 660,000 1.0
TELECOM EQUIPMENT
MAN AG ..................................................... GER 1,500 489,396 0.8
MACHINERY & ENGINEERING
British Aerospace PLC ...................................... UK 65,000 483,395 0.8
AEROSPACE/DEFENSE
Boeing Co. ................................................. US 9,700 363,750 0.6
AEROSPACE/DEFENSE
L-3 Communications Holdings, Inc.-/- ....................... US 1,300 55,900 0.1
AEROSPACE/DEFENSE
-----------
6,934,338
-----------
Materials/Basic Industry (9.0%)
Lafarge S.A. ............................................... FR 20,000 2,045,483 3.2
BUILDING MATERIALS & COMPONENTS
Martin Marietta Materials, Inc. ............................ US 25,000 1,226,563 1.9
MISC. MATERIALS & COMMODITIES
La Cementos Nacional, C.A. - 144A GDR{.} {\/} .............. ECDR 5,975 687,125 1.1
CEMENT
Hanson PLC - ADR{\/} ....................................... UK 16,000 565,000 0.9
BUILDING MATERIALS & COMPONENTS
CRH PLC .................................................... UK 38,000 553,756 0.9
BUILDING MATERIALS & COMPONENTS
Suez Cement Co. - Reg S GDR{c} {\/} ........................ EGPT 22,000 324,500 0.5
CEMENT
Centex Corp. ............................................... US 9,400 314,900 0.5
BUILDING MATERIALS & COMPONENTS
-----------
5,717,327
-----------
Technology (2.8%)
Cisco Systems, Inc.-/- ..................................... US 17,250 1,086,750 1.7
NETWORKING
Tekelec-/- ................................................. US 40,000 717,500 1.1
TELECOM TECHNOLOGY
-----------
1,804,250
----------- -----
TOTAL EQUITY INVESTMENTS (cost $44,438,182) .................. 55,293,024 87.3
----------- -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- -------------------------------------------------------------- ----------- -------------
<S> <C> <C>
Dated October 30, 1998, with State Street Bank & Trust Co.,
due November 2, 1998, for an effective yield of 5.30%,
collateralized by $5,070,000 U.S. Treasury Notes, 6.50% due
5/15/05 (market value of collateral is $5,810,321,
including accrued interest). (cost $5,694,000) ............ $ 5,694,000 8.9
----------- -----
TOTAL INVESTMENTS (cost $50,132,182) * ....................... 60,987,024 96.2
Other Assets and Liabilities ................................. 2,379,084 3.8
----------- -----
NET ASSETS ................................................... $63,366,108 100.0
----------- -----
----------- -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $50,132,182 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 11,779,031
Unrealized depreciation: (924,189)
-------------
Net unrealized appreciation: $ 10,854,842
-------------
-------------
Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The Fund's Portfolio of Investments at October 31, 1998, was concentrated in the
following countries:
PERCENTAGE OF NET ASSETS {D}
------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ------------- -----
Austria (ASTRI/ATS) .................. 1.3 1.3
Canada (CAN/CAD) ..................... 1.0 1.0
Ecuador (ECDR/ECS) ................... 1.1 1.1
Egypt (EGPT/EGP) ..................... 0.5 0.5
Finland (FIN/FIM) .................... 1.5 1.5
France (FR/FRF) ...................... 7.5 7.5
Germany (GER/DEM) .................... 5.3 5.3
Hong Kong (HK/HKD) ................... 0.2 0.2
Italy (ITLY/ITL) ..................... 5.5 5.5
Netherlands (NETH/NLG) ............... 1.3 1.3
Portugal (PORT/PTE) .................. 4.3 4.3
Spain (SPN/ESP) ...................... 4.3 4.3
Switzerland (SWTZ/CHF) ............... 1.4 1.4
United Kingdom (UK/GBP) .............. 9.1 9.1
United States (US/USD) ............... 43.0 12.7 55.7
------ ----- -----
Total ............................... 87.3 12.7 100.0
------ ----- -----
------ ----- -----
- --------------
{d} Percentages indicated are based on net assets of $62,877,637.
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1998
<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO BUY: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ------------ -------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 2,117,189 1.63655 11/27/98 $ (21,456)
Deutsche Marks.......................... 604,912 1.67875 11/27/98 9,230
Deutsche Marks.......................... 483,929 1.74405 11/27/98 25,227
French Francs........................... 2,525,704 5.47050 12/8/98 (33,477)
-------------- --------------
Total Contracts to Buy (Payable amount
$5,752,210).......................... 5,731,734 (20,476)
-------------- --------------
THE VALUE OF CONTRACTS TO BUY AS
PERCENTAGE OF NET ASSETS IS 9.05%.
CONTRACTS TO SELL:
- ----------------------------------------
Deutsche Marks.......................... 3,206,030 1.78600 11/27/98 (238,505)
French Francs........................... 2,525,704 5.76105 12/8/98 (95,591)
-------------- --------------
Total Contracts to Sell (Receivable
amount $5,397,638)................... 5,731,734 (334,096)
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 9.05%.
Total Open Forward Foreign Currency
Contracts, Net....................... $ (354,572)
--------------
--------------
</TABLE>
- ----------------
See Note 1 of Notes to the Financial Statements.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost
$50,132,182) .................................................................. $60,987,024
U.S. currency................................................................... $ 187
Foreign currencies (cost $1,246,112)............................................ 1,222,705 1,222,892
---------
Receivable for securities sold............................................................. 2,900,604
Dividends and dividend withholding tax reclaims receivable................................. 71,072
Interest receivable........................................................................ 1,677
Miscellaneous receivable................................................................... 1,183
----------
Total assets............................................................................. 65,184,452
----------
Liabilities:
Payable for securities purchased........................................................... 1,353,704
Payable for open forward foreign currency contracts, net .................................. 354,572
Payable for investment management and administration fees ................................. 77,134
Payable for custodian fees................................................................. 11,419
Payable for professional fees ............................................................. 9,700
Other accrued expenses..................................................................... 11,815
----------
Total liabilities........................................................................ 1,838,344
----------
Net assets................................................................................... $63,366,108
----------
----------
Net assets consist of:
Paid in capital ........................................................................... $37,105,827
Accumulated net investment income.......................................................... 4,948,847
Accumulated net realized gain on investments and foreign currency transactions............. 10,835,267
Net unrealized depreciation on translation of assets and liabilities in foreign
currencies................................................................................ (378,675)
Net unrealized appreciation of investments................................................. 10,854,842
----------
Total -- net assets applicable to beneficial interest outstanding............................ $63,366,108
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:
Dividend income (net of foreign withholding tax of $181,399)............................... $1,666,460
Interest income............................................................................ 396,324
Other income............................................................................... 45,192
----------
Total investment income.................................................................. 2,107,976
----------
Expenses:
Investment management and administration fees ............................................. 612,027
Custodian fees............................................................................. 39,785
Professional fees.......................................................................... 5,110
Other expenses............................................................................. 4,987
----------
Total expenses before reductions......................................................... 661,909
----------
Expense reductions..................................................................... (7,816)
----------
Total net expenses....................................................................... 654,093
----------
Net investment income........................................................................ 1,453,883
----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized gain on investments................................................ 4,932,911
Net realized loss on foreign currency transactions.............................. (76,810)
---------
Net realized gain during the year........................................................ 4,856,101
Net change in unrealized depreciation on translation of assets and liabilities
in foreign currencies.......................................................... (333,974)
Net change in unrealized appreciation of investments............................ (7,919,952)
-----------
Net unrealized depreciation during the year.............................................. (8,253,926)
----------
Net realized and unrealized loss on investments and foreign currencies....................... (3,397,825)
----------
Net decrease in net assets resulting from operations......................................... $(1,943,942)
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
----------- ----------
<S> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income.......................................................... $ 1,453,883 $ 1,298,702
Net realized gain on investments and foreign currency transactions............. 4,856,101 778,612
Net change in unrealized depreciation on translation of assets and liabilities
in foreign currencies......................................................... (333,974) (116,926)
Net change in unrealized appreciation (depreciation) of investments............ (7,919,952) 8,647,635
----------- ----------
Net increase (decrease) in net assets resulting from operations.............. (1,943,942) 10,608,023
----------- ----------
Beneficial interest transactions:
Contributions.................................................................. 1,825,124 21,536,627
Withdrawals.................................................................... (35,090,285) (25,593,997)
Net decrease from beneficial interest transactions........................... (33,265,161) (4,057,370)
----------- ----------
Total increase (decrease) in net assets.......................................... (35,209,103) 6,550,653
Net assets:
Beginning of year.............................................................. 98,575,211 92,024,558
----------- ----------
End of year.................................................................... $63,366,108 $98,575,211
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------------------ OPERATIONS) TO
1998 1997 1996 1995 OCTOBER 31, 1994
---------- ---------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 63,366 $ 98,575 $ 92,025 $ 86,010 $ 51,107
Ratio of net investment income (loss) to
average net assets..................... 1.72% 1.22% 1.21% 1.22% 1.44%
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 4).......... 0.78% 0.69% 0.74% 0.83% 1.17% (a)
Without expense reductions and
reimbursement........................ 0.79% 0.77% 0.85% 0.88% N/A
Portfolio turnover rate................. 96% 41% 41% 45% 18%
</TABLE>
- ----------------
(a) Annualized
N/A Not applicable
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
Global Infrastructure Portfolio, (the "Portfolio") is organized as asubtrust of
Global Investment Portfolio, a Delaware business trust and is registered under
the 1940 Act as an open-end management investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Portfolio in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
The Portfolio calculates the net asset value of and completes orders to
purchase, exchange or repurchase Portfolio shares of beneficial interest on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the AIM Advisors, Inc. ("the
Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Trust's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Trust's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolio are maintained in U.S. dollars. The
market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolio after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
The Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
<PAGE>
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities".
The Portfolio could be exposed to risk if a counter party is unable to meet the
terms of the contract or if the value of the currency changes unfavorably. The
Portfolio may enter into Forward Contracts in connection with planned purchases
or sales of securities, or to hedge against adverse fluctuations in exchange
rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers, unless a quotation
from only one broker is available, in which case only that broker's price will
be used. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security and the
liability related to such option is extinguished. If a written call option is
exercised, a gain or loss is realized from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the underlying security
purchased would be decreased by the premium originally received. The Portfolio
can write options only on a covered basis, which, for a call, requires that the
Portfolio hold the underlying security and, for a put, requires the Portfolio to
set aside cash, U.S. government securities or other liquid securities in an
amount not less than the exercise price, or otherwise provide adequate cover at
all times while the put option is outstanding. The Portfolio may use options to
manage its exposure to the stock market and to fluctuations in currency values
or interest rates.
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
<PAGE>
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1998, stocks with an aggregate value of $9,982,375 were on loan
to brokers. The loans were secured by cash collateral of $10,007,255 received by
the Portfolio.
For international securities, cash collateral is received by the Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
<PAGE>
(I) TAXES
It is the intended policy of the Portfolio to meet the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). Therefore, no provision has been made for
Federal taxes on income, capital gains, unrealized appreciation of securitie
held, or excise tax on income and capital gains.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Portfolio's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
In addition, the Portfolio's policy of concentrating its investments in
companies in the infrastructure industry subject the Portfolio to greater risk
than a fund that is more diversified.
(K) INDEXED SECURITIES
The Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult.
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager"), an indirect wholly-owned subsidiary of
AMVESCAP PLC, is the Portfolio's investment manager and administrator
The Portfolio pays investment management and administration fees to the Manager
at the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. These fees are computed daily and paid
monthly.
The Trust pays each Trustee who is not an employee, officer or director of the
Manager, or any other affiliated company, $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $73,625,025 and $110,306,469, respectively.
For the year ended October 31, 1998, there were no purchases and sales of U.S.
government obligations.
4. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who then paid a
portion of the Portfolio's expenses. For the year ended October 31, 1998, the
Portfolio's expenses were reduced by $7,816 under these arrangements.
<PAGE>
BOARD OF TRUSTEES
C. Derek Anderson
President, Plantagenet Capital
Management, LLC (an investment
partnership); Chief Executive Officer,
Plantagenet Holdings, Ltd.
(an investment banking firm)
Frank S. Bayley
Partner, law firm of
Baker & McKenzie
Robert H. Graham
President and Chief Executive Officer,
A I M Management Group Inc.
Arthur C. Patterson
Managing Partner, Accel Partners
(a venture capital firm)
Ruth H. Quigley
Private Investor
OFFICERS
Robert H. Graham
Chairman and President
Helge K. Lee
Vice President & Secretary
Dana R. Sutton
Vice President & Assistant Treasurer
Kenneth W. Chancey
Vice President &
Principal Accounting Officer
John J. Arthur
Vice President
Melville B. Cox
Vice President
Gary T. Crum
Vice President
Carol F. Relihan
Vice President
David P. Hess
Assistant Secretary
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Pamela Ruddock
Assistant Treasurer
Paul Wozniak
Assistant Treasurer
OFFICE OF THE FUND
11 Greenway Plaza
Suite 100
Houston, TX 77046
<PAGE>
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
COUNSEL TO THE FUND
Kirkpatrick & Lockhart, LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL OF THE TRUSTEES
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of Global Resources Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of the Global Resources Portfolio at October
31, 1998, and the results of its operations, the changes in its net assets and
the supplementary data foar the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and supplementary
data (hereafter referred to as "financial statements") are the responsibility of
the Portfolio's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
DECEMBER 18, 1998
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Energy Sources (27.5%)
Exxon Corp. ................................................ US 21,900 $ 1,560,370 3.0
Mobil Corp. ................................................ US 19,600 1,483,475 2.8
Total Compagnie Francaise des Petroles S.A. - ADR{\/} ...... FR 24,700 1,444,950 2.8
Chevron Corp. .............................................. US 17,600 1,434,400 2.7
Santa Fe Energy Resources, Inc.-/- ......................... US 163,700 1,330,063 2.5
Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} .......... ITLY 20,400 1,239,300 2.4
Amoco Corp. ................................................ US 20,800 1,167,400 2.2
ERG SpA .................................................... ITLY 373,000 1,124,237 2.2
Elf Aquitaine ADR{\/} ...................................... FR 19,000 1,102,000 2.1
Suncor Energy, Inc. ........................................ CAN 30,000 952,998 1.8
Repsol S.A. ................................................ SPN 11,900 597,493 1.1
Orogen Minerals Ltd. - 144A ADR{.} {\/} .................... AUSL 37,100 505,488 1.0
Triton Energy Ltd.-/- ...................................... US 43,900 477,413 0.9
-----------
14,419,587
-----------
Electrical & Gas Utilities (19.9%)
Montana Power Co. .......................................... US 26,000 1,126,125 2.2
AGL Resources, Inc. ........................................ US 50,000 1,046,875 2.0
Suburban Propane Partners L.P. ............................. US 46,000 868,250 1.7
Leviathan Gas Pipeline Partners L.P. ....................... US 24,900 638,063 1.2
Northern Border Partners L.P. .............................. US 18,100 633,500 1.2
Buckeye Partners L.P. ...................................... US 21,600 610,200 1.2
Lakehead Pipe Line Partners L.P. ........................... US 11,300 596,075 1.1
TEPPCO Partners L.P. ....................................... US 20,400 594,150 1.1
AmeriGas Partners L.P. ..................................... US 23,000 576,438 1.1
Ferrellgas Partners L.P. ................................... US 26,600 555,275 1.1
Kaneb Pipe Line Partners L.P. .............................. US 14,700 467,644 0.9
Pembina Pipeline Income Fund Trust Units{=} ................ CAN 80,500 443,598 0.8
Heritage Propane Partners L.P. ............................. US 17,800 409,400 0.8
TransCanada Power L.P. ..................................... CAN 22,800 407,961 0.8
Cornerstone Propane Partners L.P. .......................... US 19,600 404,250 0.7
Superior Propane Income Fund ............................... CAN 44,100 403,118 0.7
AEC Pipelines L.P. ......................................... CAN 66,000 374,392 0.7
The OPTUS Natural Gas Distribution Income Fund ............. CAN 20,000 306,645 0.6
-----------
10,461,959
-----------
Chemicals (10.7%)
Henkel KGaA Non-Voting Preferred ........................... GER 10,645 910,076 1.8
BASF AG .................................................... GER 20,400 865,253 1.7
Solutia, Inc. .............................................. US 35,400 776,588 1.4
Solvay S.A. "A" ............................................ BEL 7,900 619,789 1.2
Air Liquide ................................................ FR 3,600 602,841 1.1
Crompton & Knowles Corp. ................................... US 35,900 576,644 1.1
Potash Corporation of Saskatchewan, Inc.{\/} ............... CAN 8,200 568,875 1.1
Monsanto Co. ............................................... US 10,250 416,406 0.8
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Chemicals (Continued)
Tesoro Petroleum Corp. ..................................... US 17,700 $ 262,181 0.5
-----------
5,598,653
-----------
Misc. Materials & Commodities (8.3%)
USG Corp. .................................................. US 36,900 1,759,669 3.4
Martin Marietta Materials, Inc. ............................ US 27,900 1,368,844 2.6
Encore Wire Corp.-/- ....................................... US 46,425 516,478 1.0
Scheid Vineyards, Inc. "A" ................................. US 79,700 448,313 0.8
Fresh Del Monte Produce, Inc. .............................. US 12,300 219,863 0.4
Chiquita Brands International .............................. US 13,100 139,188 0.3
-----------
4,452,355
-----------
Cement (6.3%)
Southdown, Inc. ............................................ US 28,372 1,544,501 2.9
Lafarge S.A. ............................................... FR 13,200 1,350,019 2.6
Lafarge Corp. .............................................. US 14,600 491,838 0.9
-----------
3,386,358
-----------
Metals - Non-Ferrous (6.4%)
USEC, Inc.-/- .............................................. US 72,300 1,057,388 2.6
Aluminum Company of America (ALCOA) ........................ US 9,300 737,025 1.4
Rio Tinto PLC .............................................. UK 50,900 617,408 1.1
Phelps Dodge Corporation ................................... US 9,000 518,625 1.0
EdperBrascan Corp. "A" ..................................... CAN 27,819 407,591 0.8
-----------
3,338,037
-----------
Energy Equipment & Services (5.2%)
Enerflex Systems Ltd. ...................................... CAN 30,600 644,733 1.3
Stolt Comex Seaway S.A.: ................................... UK -- -- 1.1
Common-/- {\/} ........................................... -- 32,500 414,375 --
ADR-/- {\/} .............................................. -- 14,000 144,375 --
J. Ray McDermott S.A.-/- ................................... US 17,400 545,925 1.0
Coflexip - ADR{\/} ......................................... FR 10,100 486,063 0.9
Core Laboratories N.V.-/-{\/} .............................. NETH 21,500 485,094 0.9
-----------
2,720,565
-----------
Building Materials & Components (3.9%)
Centex Construction Products, Inc. ......................... US 25,400 854,075 1.7
Centex Corp. ............................................... US 21,400 716,900 1.3
Pulte Corp. ................................................ US 19,200 494,400 0.9
-----------
2,065,375
-----------
Gold (3.1%)
Barrick Gold Corp.{\/} ..................................... CAN 31,700 677,588 1.3
Freeport-McMoRan Copper & Gold, Inc. "B" ................... US 38,000 467,875 0.9
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Gold (Continued)
Placer Dome, Inc. .......................................... US 29,700 $ 467,775 0.9
-----------
1,613,238
-----------
Gas Production & Distribution (2.8%)
Coastal Corp. .............................................. US 42,600 1,501,650 2.8
-----------
Forest Products (2.8%)
Stora Kopparbergs Bergslags Aktiebolag (STORA) "A" ......... SWDN 46,280 510,332 1.0
Plum Creek Timber Company L.P. ............................. US 15,711 439,908 0.8
Crown Pacific Partners L.P. ................................ US 16,300 402,406 0.8
Doman Industries Ltd. "B"-/- ............................... CAN 117,130 95,678 0.2
-----------
1,448,324
-----------
Metals - Steel (2.6%)
IPSCO, Inc. ................................................ CAN 45,700 896,224 1.7
British Steel PLC - ADR{\/} ................................ UK 28,300 495,250 0.9
-----------
1,391,474
-----------
Consumer Services (0.4%)
United Road Services, Inc.-/- .............................. US 13,200 211,200 0.4
----------- -----
TOTAL EQUITY INVESTMENTS (cost $57,535,092) .................. 52,608,775 100.2
----------- -----
TOTAL INVESTMENTS (cost $57,535,092) * ...................... 52,608,775 100.2
Other Assets and Liabilities ................................. (78,778) (0.2)
----------- -----
NET ASSETS ................................................... $52,529,997 100.0
----------- -----
</TABLE>
- --------------
{\/} U.S. currency denominated.
-/- Non-income producing security.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
{=} Pembina Pipeline Income Fund acquired and holds all of the Notes
and issued and outstanding common shares of Pembina Corp.
* For Federal income tax purposes, cost is $58,097,575 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 1,895,512
Unrealized depreciation: (7,384,312)
-------------
Net unrealized depreciation: $ (5,488,800)
-------------
-------------
Abbreviations:
ADR--American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1998, was concentrated in the
following countries:
PERCENTAGE OF NET ASSETS{d}
------------------------------
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY OTHER TOTAL
- -------------------------------------- ------ ------------- -----
Australia (AUSL/AUD) ................. 1.0 1.0
Belgium (BEL/BEF) .................... 1.2 1.2
Canada (CAN/CAD) ..................... 11.9 11.9
France (FR/FRF) ...................... 9.5 9.5
Germany (GER/DEM) .................... 3.5 3.5
Italy (ITLY/ITL) ..................... 4.6 4.6
Netherlands (NETH/NLG) ............... 0.9 0.9
Spain (SPN/ESP) ...................... 1.1 1.1
Sweden (SWDN/SEK) .................... 0.9 0.9
United Kingdom (UK/GBP) .............. 3.2 3.2
United States (US/USD) ............... 62.4 (0.2) 62.2
------ --- -----
Total ............................... 100.2 (0.2) 100.0
------ --- -----
------ --- -----
- --------------
{d} Percentages indicated are based on net assets of $52,529,997.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $57,535,092)....................................... $52,608,775
U.S. currency..................................................................... $ 29
Foreign currencies (cost $776,844)................................................ 777,050 777,079
---------
Receivable for securities sold............................................................... 222,089
Dividends and dividend withholding tax reclaims receivable................................... 117,621
Miscellaneous receivable..................................................................... 1,429
----------
Total assets............................................................................... 55,726,993
----------
Liabilities:
Payable for securities purchased............................................................. 950,376
Payable for investment management and administration fees.................................... 126,313
Borrowings................................................................................... 87,000
Payable to custodian fees.................................................................... 12,283
Payable for professional fees................................................................ 6,132
Other accrued expenses....................................................................... 14,892
----------
Total liabilities.......................................................................... 1,196,996
----------
Net assets..................................................................................... $52,529,997
----------
----------
Net assets consist of:
Paid in capital (Note 4)..................................................................... $66,043,342
Accumulated net investment income............................................................ 956,529
Accumulated net realized loss on investments and foreign currency transactions............... (9,543,378)
Net unrealized depreciation on translation of assets and liabilities in foreign currencies... (179)
Net unrealized depreciation of investments................................................... (4,926,317)
----------
Total -- net assets applicable to beneficial interest outstanding.............................. $52,529,997
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:
Dividend income (net of foreign withholding tax of $94,244).................................. $ 848,873
Interest income.............................................................................. 271,397
Other income................................................................................. 28,903
-------------
Total investment income.................................................................... 1,149,173
-------------
Expenses:
Investment management and administration fees................................................ 678,775
Custodian fees............................................................................... 40,150
Professional fees............................................................................ 6,205
Other expenses............................................................................... 33,814
-------------
Total expenses before reductions........................................................... 758,944
-------------
Expense reductions....................................................................... (45,111)
-------------
Total net expenses......................................................................... 713,833
-------------
Net investment loss............................................................................ 435,340
-------------
Net realized and unrealized loss on investments and foreign currencies:
Net realized loss on investments.............................................. $ (21,765,337)
Net realized loss on foreign currency transactions............................ (113,638)
-------------
Net realized loss during the year.......................................................... (21,878,975)
Net change in unrealized depreciation on translation of assets and liabilities
in foreign currencies........................................................ 108,725
Net change in unrealized depreciation of investments.......................... (39,300,386)
-------------
Net unrealized depreciation during the year................................................ (39,191,661)
-------------
Net realized and unrealized loss on investments and foreign currencies......................... (61,070,636)
-------------
Net decrease in net assets resulting from operations........................................... $ (60,635,296)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
-------------- --------------
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $ 435,340 $ (127,889)
Net realized gain (loss) on
investments and foreign currency
transactions......................... (21,878,975) 7,540,578
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 108,725 (125,779)
Net change in unrealized appreciation
(depreciation) of investments........ (39,300,386) 18,607,939
-------------- --------------
Net increase (decrease) in net
assets resulting from operations... (60,635,296) 25,894,849
-------------- --------------
Beneficial interest transactions:
Contributions....................... 118,621,006 196,198,112
Withdrawals......................... (176,486,911) (163,110,420)
-------------- --------------
Net increase (decrease) from
beneficial interest transaction. (57,865,905) 33,087,692
-------------- --------------
Total increase (decrease) in net
assets................................. (118,501,201) 58,982,541
Net assets:
Beginning of year..................... 171,031,199 112,048,658
-------------- --------------
End of year........................... $ 52,529,998 $ 171,031,199
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------------------ OPERATIONS) TO
1998 1997 1996 1995 OCTOBER 31, 1994
---------- ---------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 52,530 $ 171,031 $ 112,049 $ 26,760 $ 26,950
Ratio of net investment income (loss) to
average net assets..................... 0.47% (0.09)% (0.07)% 1.88% 3.47% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 4).......... 0.77% 0.72% 0.73% 0.93% 2.15%
With expense reductions and/or
reimbursement........................ 0.84% 0.82% 0083% 0.96% N/A
Portfolio turnover rate................. 201% 321% 94% 87% 137%
</TABLE>
- ----------------
(a) Annualized
N/A Not applicable
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
Global Resources Portfolio, (the "Portfolio") is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust and is registered under
the 1940 Act as an open-end management investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
The Portfolio calculates the net asset value of and completes orders to
purchase, exchange or repurchase Portfolio shares of beneficial interest on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by AIM Advisor, Inc. ("the
Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Trust's Board of Trustees.
<PAGE>
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Trust's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund and Portfolio are maintained in U.S. dollars.
The market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolio after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
The Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
<PAGE>
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities".
The Portfolio could be exposed to risk if a counter party is unable to meet the
terms of the contract or if the value of the currency changes unfavorably. The
Portfolio may enter into Forward Contracts in connection with planned purchases
or sales of securities, or to hedge against adverse fluctuations in exchange
rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers, unless a quotation
from only one broker is available, in which case only that broker's price will
be used. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security and the
liability related to such option is extinguished. If a written call option is
exercised, a gain or loss is realized from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the underlying security
purchased would be decreased by the premium originally received. The Portfolio
can write options only on a covered basis, which, for a call, requires that the
Portfolio hold the underlying security and, for a put, requires the Portfolio to
set aside cash, U.S. government securities or other liquid securities in an
amount not less than the exercise price, or otherwise provide adequate cover at
all times while the put option is outstanding. The Portfolio may use options to
manage its exposure to the stock market and to fluctuations in currency values
or interest rates.
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
<PAGE>
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1998, stocks with an aggregate value of $6,432,456 were on loan
to brokers. The loans were secured by cash collateral of $6,546,297 received by
the Portfolio.
<PAGE>
For international securities, cash collateral is received by the Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
(I) TAXES
It is the intended policy of the Portfolio to meet the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). Therefore, no provision has been made for
Federal taxes on income, capital gains, unrealized appreciation of securities
held, or excise tax on income and capital gains.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Portfolio's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
In addition, the Portfolio's policy of concentrating its investments in
companies in the natural resources industry subject the Portfolio to greater
risk than a fund that is more diversified.
(K) INDEXED SECURITIES
The Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
<PAGE>
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager"), an indirect wholly-owned subsidiary of
AMVESCAP PLC, is the Fund's and Portfolio's investment manager and
administrator.
The Portfolio pays investment management and administration fees to the Manager
at the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and0.65% on amounts thereafter. These fees are computed daily and paid
monthly.
The Trust pays each Trustee who is not an employee, officer or director of the
Manager, or any other affiliated company, $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $171,815,753 and $229,084,684, respectively.
For the year ended October 31, 1998, purchases and sales of U.S. government
obligations aggregated $9,032,740 and $9,264,039, respectively.
4. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who then paid a
portion of the Portfolio's expenses. For the year ended October 31, 1998, the
Portfolio's expenses were reduced by $45,111 under these arrangements.
<PAGE>
BOARD OF TRUSTEES
C. Derek Anderson
President, Plantagenet Capital
Management, LLC (an investment
partnership); Chief Executive Officer,
Plantagenet Holdings, Ltd.
(an investment banking firm)
Frank S. Bayley
Partner, law firm of
Baker & McKenzie
Robert H. Graham
President and Chief Executive Officer,
A I M Management Group Inc.
Arthur C. Patterson
Managing Partner, Accel Partners
(a venture capital firm)
Ruth H. Quigley
Private Investor
OFFICERS
Robert H. Graham
Chairman and President
Helge K. Lee
Vice President & Secretary
Dana R. Sutton
Vice President & Assistant Treasurer
Kenneth W. Chancey
Vice President &
Principal Accounting Officer
John J. Arthur
Vice President
Melville B. Cox
Vice President
Gary T. Crum
Vice President
Carol F. Relihan
Vice President
David P. Hess
Assistant Secretary
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Pamela Ruddock
Assistant Treasurer
Paul Wozniak
Assistant Treasurer
OFFICE OF THE FUND
11 Greenway Plaza
Suite 100
Houston, TX 77046
<PAGE>
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
COUNSEL TO THE FUND
Kirkpatrick & Lockhart, LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL OF THE TRUSTEES
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
<PAGE>
PART C: OTHER INFORMATION
GLOBAL INVESTMENT PORTFOLIO
ITEM 23. EXHIBITS.
Exhibit
Number Description
- ------ -----------
(a) - Agreement and Declaration of Trust of Registrant, dated May 7,
1998, was filed electronically as an Exhibit to Amendment No. 7 to
the Registration Statement on Form N-1A, on February 26, 1999, and
is hereby incorporated by reference.
(b) (1) - By-Laws of Registrant was filed electronically as an Exhibit to
Amendment No. 7 to the Registration Statement on Form N-1A, on
February 26, 1999, and is hereby incorporated by reference.
(2) - Amended and Restated By-Laws of Registrant was filed
electronically as an Exhibit to Amendment No. 7 to the
Registration Statement on Form N-1A, on February 26, 1999, and is
hereby incorporated by reference.
(c) - Provisions of instruments defining the rights of holders of
Registrant's securities are contained in the Agreement and
Declaration of Trust, as amended, Articles II, VI, VII, VIII and
IX and By-Laws Articles IV, V, VI, VII and VIII, which were
included as part of Exhibits (a)(1) and (b) to Amendment No. 7 to
the Registration Statement on Form N-1A, on February 26, 1999, and
are hereby incorporated by reference.
(d) - Investment Management and Administration Contract, dated May 29,
1998, between Registrant and A I M Advisors, Inc. was filed as an
Exhibit to Amendment No. 6 to the Registration Statement on Form
N-1A, on June 23, 1998, and is hereby incorporated by reference.
(e) - Underwriting Contracts - None.
(f) - Bonus or Profit Sharing Contracts - None.
(g) - Amendment to Custodian Contract, dated January 26, 1999, was filed
electronically as an Exhibit to Amendment No. 7 to the
Registration Statement on Form N-1A, on February 26, 1999, and is
hereby incorporated by reference.
(h) - Other Material Contracts - None.
(i) - Legal Opinion - None.
C-1
<PAGE>
(j) - Consent of PricewaterhouseCoopers LLP, independent auditors, is
filed herewith electronically.
(k) - Omitted Financial Statements - None.
(l) - Initial Capitalization Agreements - None.
(m) - Rule 12b-1 Plan - None.
(n) - Financial Data Schedules - None.
(o) - Rule 18f-3 Plan - None.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
PROVIDE A LIST OR DIAGRAM OF ALL PERSONS DIRECTLY OR INDIRECTLY CONTROLLED
BY OR UNDER COMMON CONTROL WITH THE FUND. FOR ANY PERSON CONTROLLED BY ANOTHER
PERSON, DISCLOSE THE PERCENTAGE OF VOTING SECURITIES OWNED BY THE IMMEDIATELY
CONTROLLING PERSON OR OTHER BASIS OF THAT PERSON'S CONTROL. FOR EACH COMPANY,
ALSO PROVIDE THE STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH THE
COMPANY IS ORGANIZED.
None.
ITEM 25. INDEMNIFICATION.
STATE THE GENERAL EFFECT OF ANY CONTRACT, ARRANGEMENTS OR STATUTE UNDER
WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR AFFILIATED PERSON OF THE FUND IS
INSURED OR INDEMNIFIED AGAINST ANY LIABILITY INCURRED IN THEIR OFFICIAL
CAPACITY, OTHER THAN INSURANCE PROVIDED BY ANY DIRECTOR, OFFICER, AFFILIATED
PERSON, OR UNDERWRITER FOR THEIR OWN PROTECTION.
Article VIII of the Registrant's Agreement and Declaration of Trust, as
amended, provides for indemnification of certain persons acting on behalf
of the Registrant. Article VIII, Section 8.1 provides that a Trustee, when
acting in such capacity, shall not be personally liable to any person for
any act, omission, or obligation of the Registrant or any Trustee;
provided, however, that nothing contained in the Registrant's Agreement and
Declaration of Trust or in the Delaware Business Trust Act shall protect
any Trustee against any liability to the Registrant or the Shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of the office of Trustee.
Article VIII, Section 3 of the Registrant's Amended and Restated By-Laws
also provides that every person who is, or has been, a Trustee or Officer
of the Registrant to the fullest extent permitted by the Delaware Business
Trust Act, the Registrant's Amended and Restated By-Laws and other
applicable law.
C-2
<PAGE>
Section 9 of the Investment Management and Administration Contract between
the Registrant and AIM provides that AIM shall not be liable, and each
series of the Registrant shall indemnify AIM and its directors, officers
and employees, for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by any series of the
Registrant or the Registrant in connection with the matters to which the
Investment Management and Administration Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of AIM in the performance by AIM of its duties or from reckless
disregard by AIM of its obligations and duties under the Investment
Management and Administration Contract.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
DESCRIBE ANY OTHER BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT OF A
SUBSTANTIAL NATURE THAT EACH INVESTMENT ADVISOR, AND EACH DIRECTOR, OFFICER OR
PARTNER OF THE ADVISOR, IS OR HAS BEEN ENGAGED WITHIN THE LAST TWO FISCAL YEARS
FOR HIS OR HER OWN ACCOUNT OR IN THE CAPACITY OF DIRECTOR, OFFICER, EMPLOYEE,
PARTNER, OR TRUSTEE.
See the material under the headings "Trustees and Executive Officers" and
"Management" included in Part B (Statement of Additional Information) of
this Amendment. Information as to the Directors and Officers of A I M
Advisors, Inc. is included in Schedule A and Schedule D of Part I of the
entity's Form ADV (File No. 801-12313), filed with the Securities and
Exchange Commission, which is incorporated herein by reference thereto.
ITEM 27. PRINCIPAL UNDERWRITERS.
None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
STATE THE NAME AND ADDRESS OF EACH PERSON MAINTAINING PHYSICAL POSSESSIONS
OF EACH ACCOUNT, BOOK, OR OTHER DOCUMENT REQUIRED TO BE MAINTAINED BY SECTION
31(A) [15 U.S.C. 80A-30(A)] AND THE RULES UNDER THAT SECTION.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended, are maintained and held in
the offices of the Registrant and its advisor, A I M Advisors, Inc., 11
Greenway Plaza, Suite 100, Houston, Texas 77046, and its custodian, State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110.
ITEM 29. MANAGEMENT SERVICES.
PROVIDE A SUMMARY OF THE SUBSTANTIVE PROVISIONS OF ANY MANAGEMENT-RELATED
SERVICE CONTRACT NOT DISCUSSED IN PART A OR B, DISCLOSING THE PARTIES TO THE
C-3
<PAGE>
CONTRACT AND THE TOTAL AMOUNT PAID AND BY WHOM FOR THE FUND'S LAST THREE FISCAL
YEARS.
None.
ITEM 30. UNDERTAKINGS.
None.
C-4
<PAGE>
SIGNATURES
Pursuant to the Investment Company Act of 1940, the Global Investment
Portfolio has duly caused this Registration Statement to be signed on its behalf
by the undersigned, duly authorized, in the City of Houston, Texas on the 11th
day of August, 1999.
GLOBAL INVESTMENT PORTFOLIO
By: /s/ Robert H. Graham
--------------------------
Robert H. Graham, President
<PAGE>
INDEX TO EXHIBITS
GLOBAL INVESTMENT PORTFOLIO
Exhibit Number
- --------------
(j) Consent of PricewaterhouseCoopers LLP, independent auditors
<PAGE>
PRICEWATERHOUSECOOPERS
Consent of Independent Accountants
To the Trustees of Global Investment Portfolio:
RE: Global Investment Portfolio:
Global Financial Services Portfolio
Global Infrastructure Portfolio
Global Natural Resources Portfolio
Global Consumer Products and Services Portfolio
We consent to the inclusion in Amendment No. 8 to the Registration Statement on
Form N-1A, under the Investment Company Act of 1940, of Global Investment
Portfolio (the "Portfolio"), of our reports dated December 18, 1998, on our
audits of the financial statements and supplementary data of Global Financial
Services Portfolio, Global Infrastructure Portfolio, Global Natural Resources
Portfolio and Global Consumer Products and Services Portfolio, each a subtrust
of the Portfolio, for the periods stated therein, which are included in this
Registration Statement. We also consent to the reference to our Firm as
"Experts" under the caption "Financial Statements."
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 19, 1999
