As filed with the Securities and Exchange Commission on February 26, 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. 7 /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
<PAGE>
PART A
Responses to Items 1, 2, 3, 5 and 9 have been omitted pursuant to
paragraph B.2(b) of the General Instructions to Form N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement of Global Investment Portfolio (the "Master Portfolio")
are incorporated herein by reference from Post-Effective Amendment No. 58 to the
Registration Statement of AIM Investment Funds ("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 A of the
Feeder Registration Statement includes the prospectuses of AIM Global Consumer
Products and Services Fund, AIM Global Financial Services Fund, AIM Global
Infrastructure Fund and AIM Global Resources Fund ("Feeder's Part A").
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
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RISKS.
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Information on the Portfolios' investment objectives, principal investment
strategies and the principal risk factors associated with investments in the
Portfolios is incorporated herein by reference from the sections entitled
"Investment Objectives and Strategies" and "Principal Risks of Investing in the
Fund" in the Feeder's Part A. Additional investment techniques, features and
limitations concerning the Portfolios' investment program are described in Part
B of this Registration Statement.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
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Each Portfolio is managed and administered by A I M Advisors, Inc.
("AIM"). AIM and its worldwide asset management affiliates provide investment
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM is an indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
A more complete description of how the business of the Portfolios is
managed is incorporated herein by reference from the section entitled "Fund
Management" in the Feeder's Part A.
Beneficial interests in the Master Portfolio are divided currently into
four separate subtrusts or "series" - Global Financial Services Portfolio
("Financial Services Portfolio"), Global Infrastructure Portfolio
("Infrastructure Portfolio"), Global Resources Portfolio ("Resources Portfolio")
and Global Consumer Products and Services Portfolio ("Consumer Products
Portfolio") (each, a "Portfolio," and collectively, the "Portfolios") - each
having a distinct investment objective and distinct investment policies and
limitations. The Financial Services Portfolio, Infrastructure Portfolio and
Resources Portfolio commenced operations on May 31, 1994. The Consumer Products
Portfolio commenced operations on December 30, 1994. Additional subtrusts to the
Master Portfolio may be organized at a later date. The assets of each Portfolio
belong only to that Portfolio, and the liabilities of each Portfolio are borne
solely by that Portfolio and no other.
A-1
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Beneficial interests in the Portfolios are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolios 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. The
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
Investor inquiries may be directed to the Advisor at the following
address: 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
ITEM 7. SHAREHOLDER INFORMATION.
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An investment in a Portfolio may be made without a sales load at the net
asset value next determined after an order is received in "good order" by a
Portfolio. There is no minimum initial or subsequent investment in a Portfolio.
However, investments must be made in federal funds (i.e., monies credited to the
account of a Portfolio's custodian bank by a Federal Reserve Bank). Each
investor in a Portfolio may add to or reduce its investment in the Portfolio on
each day the New York Stock Exchange ("NYSE") is open for trading.
Information on the time and method of valuation of the Portfolios' assets
is incorporated by reference from the section entitled "Shareholder Information
- - Pricing of Shares" in the Feeder's Part A.
Each Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
An investor in a Portfolio may reduce any portion or all of its investment
at any time at the net asset value next determined after a request in "good
order" is furnished by the investor to that Portfolio. The proceeds of a
reduction will be paid by a Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in a Portfolio may not be transferred.
The right of any investor to receive payment with respect to any reduction
may be suspended or the payment of the proceeds therefrom postponed during any
period (1) when the NYSE is closed (other than customary weekend or holiday
closings) or trading on the NYSE is restricted as determined by the SEC, (2)
when an emergency exists, as defined by the SEC, which would prohibit a
Portfolio in disposing of its portfolio securities or in fairly determining the
value of its assets, or (3) as the SEC may otherwise permit.
A-2
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Each Portfolio annually declares as a dividend all of its net investment
income, if any, which includes dividends, accrued interest and earned discount
(including both original issue and market discounts) less applicable expenses.
Each Portfolio also annually distributes substantially all of its realized net
short-term capital gain (the excess of short-term capital gains over short-term
capital losses), net capital gain (the excess of net long-term capital gain over
net short-term capital loss) and net gains from foreign currency transactions,
if any. Each Portfolio may make an additional dividend or other distribution if
necessary to avoid a 4% excise tax on certain undistributed income and gain.
Under the current method of the Portfolios' operation, they are not
subject to any income tax. However, each investor in a Portfolio is taxable on
its share (as determined in accordance with the governing instruments of the
Master Portfolio and the Internal Revenue Code of 1986, as amended ("Code") and
the regulations promulgated thereunder) of that Portfolio's income, gains,
losses, deductions, and credits in determining its income tax liability. The
determination of such share will be made in accordance with the Code and the
regulations promulgated thereunder. It is intended that each Portfolio's assets,
income, and distributions will be managed in such a way that an investor in a
Portfolio will be able to satisfy the requirements of Subchapter M of the Code,
assuming that the investor invested all of its assets in the Portfolio. See Part
B for a discussion of the foregoing tax matters and certain other matters.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
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Not applicable.
A-3
<PAGE>
APPENDIX A
RATINGS OF SECURITIES
A description of corporate bond and commercial paper ratings is
incorporated herein by reference from "Appendix" in the Feeder's Part B.
A-4
<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 are incorporated herein by reference from the 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.
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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.
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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.
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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
B-1
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Portfolio, each a subtrust or "series" of the Master Portfolio. This Part B
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.
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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 is
reimbursed 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 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.
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As of the date of this filing, Financial Services Fund, Resources Fund,
Infrastructure Fund and Consumer Products Fund (each a "Fund," collectively,
"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
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.
B-2
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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.
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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.
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Item 15(a) Management; Miscellaneous Information
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Item 15(b) Not applicable
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Item 15(c) Not applicable
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Item 15(d) Management
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Item 15(e) Not applicable
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Item 15(f) Not applicable
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Item 15(g) Not applicable
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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
B-3
<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.
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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.
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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
B-4
<PAGE>
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
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
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<PAGE>
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
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.
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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
B-6
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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.
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.
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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.
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Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
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Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
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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.
B-7
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PART C: OTHER INFORMATION
GLOBAL INVESTMENT PORTFOLIO
ITEM 23. EXHIBITS.
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Exhibit
NUMBER DESCRIPTION
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(a) - Agreement and Declaration of Trust of Registrant, dated May 7, 1998,
is filed herewith electronically.
(b) (1) - By-Laws of Registrant are filed herewith electronically.
(2) - Amended and Restated By-Laws of Registrant are filed herewith
electronically.
(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 are included as
part of Exhibits (a)(1) and (b) of this Registration Statement.
(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, is filed
herewith electronically.
(h) - Other Material Contracts - None.
(i) - Legal Opinion - None.
(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 are filed herewith electronically.
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(o) - Rule 18f-3 Plan - None.
Other Exhibits:
(1) Power of Attorney for Carol F. Relihan, dated February 25, 1999, is
filed herewith electronically.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
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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 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 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. and INVESCO (NY), Inc. is included in Schedule A and
Schedule D of Part I of each entity's Form ADV (File No. 801-12313 and File
No. 801-10254, respectively), filed with the Securities and Exchange
Commission, which are 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.
C-3
<PAGE>
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
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 26th
day of February, 1999.
GLOBAL INVESTMENT PORTFOLIO
By:*
---------------------------
Robert H. Graham, President
SIGNATURES TITLE DATE
---------- ----- ----
* Chairman, Trustee &
- --------------------------- President
(Robert H. Graham) (Principal Executive
Officer)
* Trustee
- ---------------------------
(C. Derek Anderson)
* Trustee
- ---------------------------
(Frank S. Bayley)
* Trustee
- ---------------------------
(Arthur C. Patterson)
* Trustee
- ---------------------------
(Ruth H. Quigley)
Vice President &
* Principal Financial
- --------------------------- and Accounting Officer
(Kenneth W. Chancey
* By: /s/ Carol F. Relihan
---------------------
Carol F. Relihan
Attorney-In-Fact
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Carol F. Relihan, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all his capacities as a trustee or officer of Global
Investment Portfolio, a Delaware business trust, to sign on his or its behalf
any and all Registration Statements of Global Investment Portfolio (including
any amendments to Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements thereto and
applications thereunder, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission and any other applicable regulatory authority, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, and fully as to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, may lawfully do or cause to be done by virtue hereof.
DATED this 25th day of February, 1999.
/s/ Robert H. Graham
--------------------------
Robert H. Graham
/s/ C. Derek Anderson
--------------------------
C. Derek Anderson
/s/ Frank S. Bayley
--------------------------
Frank S. Bayley
/s/ Arthur C. Patterson
--------------------------
Arthur C. Patterson
/s/ Ruth H. Quigley
--------------------------
Ruth H. Quigley
<PAGE>
INDEX TO EXHIBITS
GLOBAL INVESTMENT PORTFOLIO
EXHIBIT NUMBER
(a)(1) Agreement and Declaration of Trust of Registrant
(b)(1) By-Laws of Registrant
(b)(2) Amended and Restated By-Laws of Registrant
(g) Amendment to Custodian Contract
(j) Consent of PricewaterhouseCoopers LLP, independent auditors
(n) Financial Data Schedules
<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
/ /
AIM GLOBAL
CONSUMER
PRODUCTS AND
SERVICES FUND
/ /
ANNUAL REPORT
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of AIM Global Consumer Products and Services Fund (formerly
GT Global Consumer Products and Services Fund) and Board of Trustees of AIM
Investment Funds (formerly G.T. Investment Funds, Inc.):
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 AIM Global Consumer Products
and Services Fund - Consolidated 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
7
<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 (43.6%)
Safeway, Inc.-/- .......................................... US 79,300 $ 3,791,531 2.3
RETAILERS-FOOD
Meyer (Fred), Inc.-/- ..................................... US 71,000 3,785,180 2.3
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
RETAILERS-APPAREL
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<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)
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 (30.0%)
Heineken N.V. ............................................. NETH 99,225 5,285,838 3.2
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 2.5
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 (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) * .................... 170,346,639 102.6
Other Assets and Liabilities ................................ (4,330,217) (2.6)
------------ -----
NET ASSETS .................................................. $166,016,422 100.0
------------ -----
------------ -----
</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
-------------
-------------
11
<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) ............... 3.9 3.9
United Kingdom (UK/GBP) .............. 7.0 7.0
United States (US/USD) ............... 63.2 7.9 71.1
----- --- -----
Total ............................... 92.1 7.9 100.0
----- --- -----
----- --- -----
- --------------
{d} Percentages indicated are based on net assets of $166,016,422.
The accompanying notes are an integral part of the financial statements.
11A
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $133,549,669) (Note 1).......................... $152,857,639
Repurchase Agreement, at value and cost (Note 1).......................................... 17,489,000
U.S. currency................................................................. $ 535
Foreign currencies (cost $2,750,495).......................................... 2,755,656 2,756,191
----------
Receivable for securities sold............................................................ 1,546,087
Receivable for Fund shares sold........................................................... 323,204
Dividends and dividend withholding tax reclaims receivable................................ 150,278
Miscellaneous receivable.................................................................. 12,035
Unamortized organizational costs (Note 1)................................................. 11,964
Interest receivable....................................................................... 5,148
------------
Total assets............................................................................ 175,151,546
------------
Liabilities:
Payable for securities purchased.......................................................... 8,091,057
Payable for Fund shares repurchased....................................................... 442,536
Payable for service and distribution expenses (Note 2).................................... 241,953
Payable for investment management and administration fees (Note 2)........................ 130,694
Payable for transfer agent fees (Note 2).................................................. 100,185
Payable for printing and postage expenses................................................. 42,237
Payable for professional fees............................................................. 24,648
Payable for Trustees' fees and expenses (Note 2).......................................... 12,056
Payable for registration and filing fees.................................................. 5,125
Payable for fund accounting fees (Note 2)................................................. 2,449
Payable for custodian fees................................................................ 848
Other accrued expenses.................................................................... 41,236
------------
Total liabilities....................................................................... 9,135,024
Minority interest (Notes 1 & 2)........................................................... 100
------------
Net assets.................................................................................. $166,016,422
------------
------------
Class A:
Net asset value and redemption price per share ($59,879,529 DIVIDED BY 2,702,075 shares
outstanding)............................................................................. $ 22.16
------------
------------
Maximum offering price per share (100/95.25 of $22.16) *.................................. $ 23.27
------------
------------
Class B:+
Net asset value and offering price per share ($91,613,414 DIVIDED BY 4,222,200 shares
outstanding)............................................................................. $ 21.70
------------
------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($14,523,479
DIVIDED BY 642,459 shares outstanding)................................................... $ 22.61
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................................................. $144,231,004
Accumulated net realized gain on investments and foreign currency transactions............ 2,459,227
Net unrealized appreciation on translation of assets and liabilities in foreign
currencies............................................................................... 18,221
Net unrealized appreciation of investments................................................ 19,307,970
------------
Total -- representing net assets applicable to capital shares outstanding................... $166,016,422
------------
------------
</TABLE>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $109,205)............................... $ 1,263,585
Interest income............................................................................ 727,860
Securities lending income.................................................................. 61,127
-----------
Total investment income.................................................................. 2,052,572
-----------
Expenses:
Investment management and administration fees (Note 2)..................................... 1,786,377
Service and distribution expenses: (Note 2)
Class A..................................................................... $ 335,139
Class B..................................................................... 1,005,968 1,341,107
-----------
Transfer agent fees (Note 2)............................................................... 478,410
Printing and postage expenses.............................................................. 117,338
Professional fees.......................................................................... 85,210
Fund accounting fees (Note 2).............................................................. 47,155
Registration and filing fees............................................................... 44,460
Custodian fees............................................................................. 43,690
Trustees' fees and expenses (Note 2)....................................................... 22,550
Amortization of organization costs (Note 1)................................................ 10,300
Other expenses............................................................................. 21,447
-----------
Total expenses before reductions......................................................... 3,998,044
-----------
Expense reductions (Note 5)............................................................ (40,195)
-----------
Total net expenses....................................................................... 3,957,849
-----------
Net investment loss.......................................................................... (1,905,277)
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
(Note 1)
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......................................... $13,522,857
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<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 loss..................................................................... $ (1,905,277) $ (1,662,851)
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.................................. 13,522,857 13,795,252
--------------- ---------------
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments................................................... (5,574,558) (3,424,902)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments................................................... (8,128,120) (4,055,905)
Advisor Class:
Distributions to shareholders: (Note 1)
From net realized gain on investments................................................... (962,828) (308,573)
--------------- ---------------
Total distributions................................................................... (14,665,506) (7,789,380)
--------------- ---------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................................ 92,335,349 136,239,369
Decrease from capital shares repurchased................................................ (87,838,591) (151,833,735)
--------------- ---------------
Net increase (decrease) from capital share transactions............................... 4,496,758 (15,594,366)
--------------- ---------------
Total increase (decrease) in net assets................................................... 3,354,109 (9,588,494)
Net assets:
Beginning of year....................................................................... 162,662,313 172,250,807
--------------- ---------------
End of year *........................................................................... $166,016,422 $162,662,313
--------------- ---------------
--------------- ---------------
* Includes undistributed net investment income........................................... $ -- --
--------------- ---------------
--------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A
---------------------------------------------------------------
DECEMBER 30, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
---------------------------------- OPERATIONS)
1998 (d) 1997 (d) 1996 (d) TO OCTOBER 31, 1995 (d)
---------- ---------- ---------- ---------------------------
Per Share Operating Performance:
Net asset value, beginning of period.......................... $ 22.19 $ 20.98 $ 14.59 $ 11.43
---------- ---------- ---------- --------
Income from investment operations:
Net investment income (loss)................................ (0.19) (0.15) (0.22) 0.02*
Net realized and unrealized gain on investments............. 2.05 2.27 7.13 3.14
---------- ---------- ---------- --------
Net increase from investment operations................... 1.86 2.12 6.91 3.16
---------- ---------- ---------- --------
Distributions to shareholders:
From net realized gain on investments....................... (1.89) (0.91) (0.52) --
---------- ---------- ---------- --------
Total distributions....................................... (1.89) (0.91) (0.52) --
---------- ---------- ---------- --------
Net asset value, end of period................................ $ 22.16 $ 22.19 $ 20.98 $ 14.59
---------- ---------- ---------- --------
---------- ---------- ---------- --------
Total investment return (c)................................... 8.66% 10.55% 48.82% 27.65% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).......................... $ 59,880 $ 62,637 $ 76,900 $ 4,082
Ratio of net investment income (loss) to average net assets:
With expense reductions and/or reimbursement (Notes 2 &
5)......................................................... (0.81)% (0.72)% (1.14)% 0.20% (a)
Without expense reductions and/or reimbursement............. (0.83)% (0.87)% (1.24)% (11.11)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement (Notes 2 &
5)......................................................... 1.93% 1.84% 2.24% 2.32% (a)
Without expense reductions and/or reimbursement............. 1.95% 1.99% 2.34% 13.63% (a)
Portfolio turnover rate++..................................... 221% 392% 169% 240% (a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share operating data were calculated based upon
average shares outstanding during the period.
* Before reimbursement net investment income (loss) per share would have
been reduced (increased) by $1.12, $1.04 and $0.61 for Class A, Class
B and Advisor Class, respectively.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover is calculated on the basis of the Portfolio as a
whole without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS B
---------------------------------------------------------------
DECEMBER 30, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
---------------------------------- OPERATIONS)
1998 (d) 1997 (d) 1996 (d) TO OCTOBER 31, 1995 (d)
---------- ---------- ---------- ---------------------------
Per Share Operating Performance:
Net asset value, beginning of period............................. $ 21.86 $ 20.79 $ 14.53 $ 11.43
---------- ---------- ---------- --------
Income from investment operations:
Net investment income (loss)................................... (0.30) (0.24) (0.31) (0.04) *
Net realized and unrealized gain on investments................ 2.03 2.22 7.09 3.14
---------- ---------- ---------- --------
Net increase from investment operations...................... 1.73 1.98 6.78 3.10
---------- ---------- ---------- --------
Distributions to shareholders:
From net realized gain on investments.......................... (1.89) (0.91) (0.52) --
---------- ---------- ---------- --------
Total distributions.......................................... (1.89) (0.91) (0.52) --
---------- ---------- ---------- --------
Net asset value, end of period................................... $ 21.70 $ 21.86 $ 20.79 $ 14.53
---------- ---------- ---------- --------
---------- ---------- ---------- --------
Total investment return (c)...................................... 8.16% 9.95% 48.11% 27.12% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)............................. $ 91,613 $ 93,978 $ 87,904 $ 2,959
Ratio of net investment income (loss) to average net assets:
With expense reductions and/or reimbursement (Notes 2 & 5)..... (1.31)% (1.22)% (1.64)% (0.30)% (a)
Without expense reductions and/or reimbursement................ (1.33)% (1.37)% (1.74)% (11.61)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement (Notes 2 & 5)..... 2.43% 2.34% 2.74% 2.82% (a)
Without expense reductions and/or reimbursement................ 2.45% 2.49% 2.84% 14.13% (a)
Portfolio turnover rate++........................................ 221% 392% 169% 240% (a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share operating data were calculated based upon
average shares outstanding during the period.
* Before reimbursement net investment income (loss) per share would have
been reduced (increased) by $1.12, $1.04 and $0.61 for Class A, Class
B and Advisor Class, respectively.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover is calculated on the basis of the Portfolio as a
whole without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR CLASS+
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------- JUNE 1, 1995
1998 (d) 1997 (d) 1996 (d) TO OCTOBER 31, 1995 (d)
---------- ---------- ---------- ---------------------------
Per Share Operating Performance:
Net asset value, beginning of period............................. $ 22.50 $ 21.15 $ 14.64 $ 11.84
---------- ---------- ---------- --------
Income from investment operations:
Net investment income (loss)................................... (0.08) (0.04) (0.13) 0.04*
Net realized and unrealized gain on investments................ 2.08 2.30 7.16 2.76
---------- ---------- ---------- --------
Net increase from investment operations...................... 2.00 2.26 7.03 2.80
---------- ---------- ---------- --------
Distributions to shareholders:
From net realized gain on investments.......................... (1.89) (0.91) (0.52) --
---------- ---------- ---------- --------
Total distributions.......................................... (1.89) (0.91) (0.52) --
---------- ---------- ---------- --------
Net asset value, end of period................................... $ 22.61 $ 22.50 $ 21.15 $ 14.64
---------- ---------- ---------- --------
---------- ---------- ---------- --------
Total investment return (c)...................................... 9.20% 11.15% 49.50% 23.65% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)............................. $ 14,523 $ 6,047 $ 7,446 $ 164
Ratio of net investment income (loss) to average net assets:
With expense reductions and/or reimbursement (Notes 2 & 5)..... (0.31)% (0.22)% (0.64)% 0.70% (a)
Without expense reductions and/or reimbursement................ (0.33)% (0.37)% (0.74)% (10.61)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement (Notes 2 & 5)..... 1.43% 1.34% 1.74% 1.82% (a)
Without expense reductions and/or reimbursement................ 1.45% 1.49% 1.84% 13.13% (a)
Portfolio turnover rate++........................................ 221% 392% 169% 240% (a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share operating data were calculated based upon
average shares outstanding during the period.
* Before reimbursement net investment income (loss) per share would have
been reduced (increased) by $1.12, $1.04 and $0.61 for Class A, Class
B and Advisor Class, respectively.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover is calculated on the basis of the Portfolio as a
whole without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Global Consumer Products and Services Fund (the "Fund"), formerly GT Global
Consumer Products and Services Fund, is a separate series of AIM Investment
Funds (the "Trust"), formerly G.T. Investment Funds, Inc. The Trust is organized
as a Delaware business trust and is registered under the Investment Company Act
of 1940, as amended ("1940 Act"), as an open-end management investment company.
The Trust has thirteen series of shares in operation, each series corresponding
to a distinct portfolio of investments.
The Fund invests substantially all of its investable assets in Global Consumer
Products and Services Portfolio, (the "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 Portfolio has investment objectives, policies, and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
October 31, 1998, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or A I M Advisors, Inc. (the "Manager"), which has a
nominal ($100) investment in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
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 Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund 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 by 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.
18
<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.
18A
<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.
19
<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 the year ended October 31, 1998, the Fund received fees of
$61,127.
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.
19A
<PAGE>
(I) TAXES
It is the intended policy of the Fund to meet the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the 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) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Portfolio and timing differences.
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500. These expenses
are being amortized on a straightline basis over a five-year period.
(L) 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.
(M) 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.
(N) 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. At the end of the year, restricted
securities, if any, (excluding 144A issues), are shown at the end of the Fund's
Portfolio of Investments.
(O) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager, has a line of credit with each of BankBoston and State Street Bank and
Trust Company. The arrangements with the banks allow the Fund and certain other
Funds to borrow, on a first come, first serve basis, an aggregate maximum amount
of $250,000,000. The Fund is limited to borrowing up to 33 1/3% of the value of
the Fund's total assets. On October 31, 1998, the Fund had no loans outstanding.
For the year ended October 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $1,349,405, with a weighted average interest rate of 6.27%. Interest expense
for the year ended October 31, 1998 was $10,094 and is included in "Other
Expenses" on the Statement of Operations.
20
<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. As of the close of business on May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of Chancellor LGT
Asset Management, Inc. ("Chancellor LGT") consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. A I M
Distributors, Inc. ("AIM Distributors"), a wholly-owned subsidiary of the
Manager, is the Fund's distributor as of the close of business on May 29, 1998.
The Trust was reorganized from a Maryland corporation into a Delaware business
trust, and the Portfolio was reorganized from a New York common law trust into a
Delaware business trust on September 8, 1998. Finally, as of the close of
business on September 4, 1998, A I M Fund Services, Inc. ("AFS"), an affiliate
of the Manager and AIM Distributors, replaced GT Global Investor Services, Inc.
("GT Services") as the transfer agent of the Fund.
The Fund pays the Manager administration fees at the annualized rate of 0.25% of
such Fund's average daily net assets. 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.
AIM Distributors, an affiliate of the Manager, serves as the Fund's distributor.
For the period ended May 29, 1998, GT Global, Inc. ("GT Global") served as the
Fund's distributor. The Fund offers Class A, Class B, and Advisor Class shares
for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and re allows a portion of such charges to dealers through which
the sales are made. For the year ended October 31, 1998, AIM Distributors and GT
Global retained sales charges of $14,898 and $11,522, respectively. Purchases of
Class A shares exceeding $1,000,000 may be subject to a contingent deferred
sales charge ("CDSC") upon redemption, in accordance with the Fund's current
prospectus. AIM Distributors and GT Global collected no CDSCs for the year ended
October 31, 1998. AIM Distributors also makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, AIM Distributors, from its own resources, pays commissions to dealers
through which the sales are made. Certain redemptions of Class B shares made
within six years of purchase are subject to CDSCs, in accordance with the Fund's
current prospectus. For the year ended October 31, 1998, AIM Distributors and GT
Global
20A
<PAGE>
collected CDSCs in the amount of $107,172 and $246,092, respectively. In
addition, AIM Distributors makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Trust's Board of
Trustees with respect to the Fund's Class A shares ("Class A Plan") and Class B
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Trust's Board of Trustees adopted a Master Distribution Plan
applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which the Fund compensates AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.50% of the average
daily net assets of the Fund's Class A shares. Under the Class B Plan, the Fund
compensates AIM Distributors at an annualized rate of 1.00% of the average daily
net assets of the Fund's Class B shares.
The Class A Plan and the Class B Plan (together, the "Plans") are designed to
compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A and Class B shares of
the Fund. Payments also can be directed by AIM Distributors to Financial
Institutions who have entered into service agreements with respect to Class A
and Class B shares of the Fund and who provide continuing personal services to
their customers who own Class A and Class B shares of the Fund. The service fees
payable to selected Financial Institutions are calculated at the annual rate of
0.25% of the average daily net asset value of those Fund shares that are held in
such Institution's customers' accounts that were purchased on or after a
prescribed date set forth in the Plans.
The Manager and AIM Distributors voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
Effective as of the close of business September 4, 1998, the Fund, pursuant to a
transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") an annualized fee of $24.85 per shareholder accounts that are open
during any monthly period (this fee includes all out-of-pocket expenses), and an
annualized fee of $0.70 per shareholder account that is closed during any
monthly period. Both fees shall be billed by AFS monthly in arrears on a
prorated basis of 1/12 of the annualized fee for all such accounts.
21
<PAGE>
For the period November 1, 1997 to September 4, 1998, GT Services, an affiliate
of the Manager and AIM Distributors, was the transfer agent of the Fund. For
performing shareholder servicing, reporting, and general transfer agent
services, GT Services received an annual maintenance fee of $17.50 per account,
a new account fee of $4.00 per account, a per transaction fee of $1.75 for all
transactions other than exchanges and a per exchange fee of $2.25. GT Services
also was reimbursed by the Fund for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund and Portfolio. The
monthly fee for these services paid to the Manager is a percentage, not to
exceed 0.03% annually, of a Fund's average daily net assets. The annual fee rate
is derived based on the aggregate net assets of the funds which comprise the
following investment companies: AIM Growth Series, AIM Investment Funds, AIM
Investment Portfolios, AIM Series Trust, G.T. Global Variable Investment Series
and G.T. Global Variable Investment Trust. The fee is calculated at the rate of
0.03% of the first $5 billion of assets and 0.02% to the assets in excess of $5
billion. An amount is allocated to and paid by each such fund based on its
relative average daily net assets.
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.
21A
<PAGE>
4. CAPITAL SHARES
At October 31, 1998, there were 6,000,000,000 shares of the Trust's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the AIM Global Telecommunications Fund; 400,000,000 were classified as
shares of AIM Global Government Income Fund; 200,000,000 were classified as
shares of AIM Global Health Care Fund; 200,000,000 were classified as shares of
AIM Strategic Income Fund; 200,000,000 were classified as shares of AIM
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of AIM Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of AIM Latin
American Growth Fund; 200,000,000 were classified as shares of AIM Emerging
Markets Fund; 200,000,000 were classified as shares of AIM Emerging Markets Debt
Fund; 200,000,000 were classified as shares of AIM Global Financial Services
Fund; 200,000,000 were classified as shares of AIM Global Resources Fund;
200,000,000 were classified as shares of AIM Global Infrastructure Fund;
200,000,000 were classified as shares of AIM Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Trust's were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Trust's and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
----------------------- -----------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------- ---------- ----------- ---------- -----------
Shares sold........................................................ 1,525,543 $35,645,676 3,438,964 $69,880,587
Shares issued in connection with reinvestment of distributions..... 232,572 5,000,306 143,274 2,884,089
---------- ----------- ---------- -----------
1,758,115 40,645,982 3,582,238 72,764,676
Shares repurchased................................................. (1,879,330) (43,281,212) (4,424,828) (88,957,730)
---------- ----------- ---------- -----------
Net decrease....................................................... (121,215) $(2,635,230) (842,590) $(16,193,054)
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
CLASS B
- -------------------------------------------------------------------
Shares sold........................................................ 1,214,959 $28,040,109 2,703,434 $53,329,784
Shares issued in connection with reinvestment of distributions..... 327,547 6,924,836 168,859 3,364,713
---------- ----------- ---------- -----------
1,542,506 34,964,945 2,872,293 56,694,497
Shares repurchased................................................. (1,618,880) (36,544,113) (2,802,820) (55,171,454)
---------- ----------- ---------- -----------
Net increase (decrease)............................................ (76,374) $(1,579,168) 69,473 $ 1,523,043
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
ADVISOR CLASS
- -------------------------------------------------------------------
Shares sold........................................................ 675,379 $15,761,998 287,832 $ 6,471,623
Shares issued in connection with reinvestment of distributions..... 44,088 962,424 15,186 308,573
---------- ----------- ---------- -----------
719,467 16,724,422 303,018 6,780,196
Shares repurchased................................................. (345,732) (8,013,266) (386,341) (7,704,551)
---------- ----------- ---------- -----------
Net increase (decrease)............................................ 373,735 $ 8,711,156 (83,323) $ (924,355)
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
</TABLE>
5. 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.
22
<PAGE>
6. PROXY RESULTS (UNAUDITED)
The Special Meeting of Shareholders of the G.T. Investment Funds, Inc., now
known as AIM Investment Funds (the "Trust"), was held on May 20, 1998 at the
Trust's offices, 50 California Street, 26th Floor, San Francisco, California.
The meeting was held for the following purposes:
(1) To elect Trustees as follows: C. Derek Anderson, Frank S. Bayley, William J.
Guilfoyle, Arthur C. Patterson, Ruth H. Quigley.
(2) To approve a new Investment Management and Administration Contract and
Sub-Advisory and Sub-Administration Contract with respect to each series of
the Trust (each, a "Fund," and collectively, the "Funds").
(3) To approve replacement Rule 12b-1 plans of distribution with respect to
Class A and B Shares of the Fund.
(4) To approve changes to the fundamental investment restrictions of the Fund.
(5) To approve an agreement and plan of conversion and termination for the
Trust.
(6) To approve the conversion of the portfolios in which certain Funds invest to
Delaware business trusts.
(7) To ratify the selection of Coopers & Lybrand L.L.P., now known as
PricewaterhouseCoopers LLP, as the Trust's independent public accountants.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VOTES WITHHELD/
TRUSTEE/MATTER VOTES FOR AGAINST ABSTENTIONS
------------------------------------------------------------ -------------- ------------ -------------
(1) C. Derek Anderson........................................... 191,685,088 N/A 13,123,292
Frank S. Bayley............................................. 191,766,811 N/A 13,041,568
William J. Guilfoyle........................................ 191,828,959 N/A 12,979,420
Arthur C. Patterson......................................... 191,845,270 N/A 12,963,109
Ruth H. Quigley............................................. 191,869,887 N/A 12,938,492
(2)(a) Approval of investment management and administration
contract................................................... 3,261,661 143,193 1,148,028*
(2)(b) Approval of sub-advisory and sub-administration contract.... 3,246,354 152,082 1,154,446*
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A SHARES.............................................. 1,367,697 66,289 137,847
CLASS B SHARES.............................................. 2,090,063 80,546 169,123
(4)(a) Modification of Fundamental Restriction on Portfolio
Diversification............................................ 3,234,115 159,402 1,159,366*
(4)(b) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money............................. 3,234,136 159,381 1,159,366*
(4)(c) Modification of Fundamental Restriction on Making Loans..... 3,235,430 158,087 1,159,366*
(4)(d) Modification of Fundamental Restriction on Underwriting
Securities................................................. 3,235,430 158,087 1,159,366*
(4)(e) Modification of Fundamental Restriction on Real Estate
Investments................................................ 3,235,304 158,213 1,159,366*
(4)(f) Modification of Fundamental Restriction on Investing in
Commodities................................................ 3,235,430 158,087 1,159,366*
(4)(g) Modification of Fundamental Restriction on Margin
Transactions............................................... 3,235,304 158,213 1,159,366*
(4)(h) Elimination of Fundamental Restriction on Pledging Assets... 3,235,325 158,192 1,159,366*
(4)(i) Elimination of Fundamental Restriction on Investments in
Oil, Gas and Mineral Leases and Programs................... 3,235,199 158,318 1,159,366*
(5) Approval of an agreement and plan of conversion and
termination with respect to the Trust...................... 190,027,469 6,362,084 94,055,040*
(6) Approval of the conversion of the portfolios in which
certain Funds invest....................................... 3,267,649 116,825 1,168,407*
(7) Ratification of the selection of Coopers and Lybrand L.L.P.,
now known as PricewaterhouseCoopers LLP, as the Trust's
independent public accountants............................. 191,358,779 2,114,168 11,333,063
</TABLE>
- ------------------------
* Includes Broker Non-Votes
- ------------------------
23
<PAGE>
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$800,000 as capital gain dividends for the fiscal year ended October 31, 1998.
Pursuant to Section 854 of the Internal Revenue Code, the Fund designates
18.56% of ordinary income dividends paid (including short-term capital gain
distributions, if any) by the Fund as income qualifying for the dividends
received deduction for corporations for the fiscal year ended October 31, 1998.
23A
<PAGE>
1. Significant Accounting Policies (See also Note 2)
AIM Global Consumer Products and Services Fund (the 'Fund'), formerly GT
Global Consumer Products and Services Fund, is a separate series of AIM
Investment Funds, Inc. (the 'Trust'), formerly G.T. Investment Funds, Inc. The
Trust is organized as a Delaware business trust and is registered under the
Investment Company Act of 1940, as amended ('1940 Act'), as an open-end
management investment company. The Trust has thirteen series of shares in
operation, each series corresponding to a distinct portfolio of investments.
ecific fees and expenses.
The Fund invests substantially all of its investable assets in Global
Consumer Products and Services Portfolio, (the '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 Portfolio has investment objectives, policies, and limitations
substantially identical to those of its corresponding Fund. Therefore, the
financial statements of the Fund and Portfolio have been presented on a
consolidated basis, and represent all activities of both the Fund and Portfolio.
Through October 31, 1998, all of the shares of beneficial interest of the
Portfolio were owned by either the Fund or INVESCO (NY), Inc. (the
'Sub-advisor'), which has a nominal ($100) investment in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which
has equal rights as to assets and voting privileges except that Class A and
Class B each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
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 Fund calculates the net asset value of and completes orders to
purchase, exchange or repurchase Fund 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 by A I M 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.
24
<PAGE>
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 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 25
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.
25
<PAGE>
(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.
(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.
26
<PAGE>
(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 the year ended October 31, 1998, the Fund
received fees of $61,127.
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 Fund to meet the requirements for
qualification as a 'regulated investment company' under the Internal Revenue
Code of 1986, as amended ('Code'). It is also the intention of the Fund to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the 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. The Fund currently has a capital loss carryforward
of $____ which expires in 20__.
(J) Distributions to Shareholders
Distributions to shareholders are recorded by the Fund on the ex-date.
Income and capital gain distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Portfolio and
timing differences.
(K) Deferred Organizational Expenses
Expenses incurred by the Fund in connection with its organization, its
initial registration with the Securities and Exchange Commission and with
various states and the initial public offering of its shares aggregated $63,100.
These expenses are being amortized on a straightline basis over a five-year
period.
(L) 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.
(M) 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.
(N) 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. At the end of the year, restricted
securities, if any, (excluding 144A issues), are shown at the end of the Fund's
Portfolio
27
<PAGE>
of Investments.
(O) Line of Credit
The Fund, along with certain other funds advised and/or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and certain
other Funds to borrow, on a first come, first serve basis, an aggregate maximum
amount of $250,000,000. The Fund is limited to borrowing up to 33 1/3% of the
value of the Fund's total assets. On October 31, 1998, the Fund had no loan
outstanding.
For the year ended October 31, 1998, the weighted average outstanding
daily balance of bank loans (based on the number of days the loans were
outstanding) was $1,349,405, with a weighted average interest rate of 6.27%.
Interest expense for the year ended October 31, 1998 was $10,094 and is included
in 'Other Expenses' on the Statement of Operations.
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 and INVESCO (NY), Inc., (formerly, Chancellor LGT Asset
Management, Inc.) is the Fund's and Portfolio's investment sub-advisor and
sub-administrator. As of the close of business on May 29, 1998, Liechtenstein
Global Trust AG ('LGT'), the former indirect parent organization of Chancellor
LGT Asset Management, Inc. ('Chancellor LGT') consummated a purchase agreement
with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. As a
result of this transaction, Chancellor LGT was renamed INVESCO (NY), Inc., and
is now an indirect wholly-owned subsidiary of AMVESCAP PLC. A I M Distributors,
Inc. ('AIM Distributors') became the Fund's distributor. The Trust was
reorganized from a Maryland corporation into a Delaware business trust, and the
Portfolio was reorganized from a New York common law trust into a Delaware
business trust. Finally, as of the close of business on September 4, 1998, A I M
Fund Services, Inc. ('AFS'), an affiliate of the Manager and AIM Distributors,
replaced GT Global Investor Services, Inc. ('GT Services') as the transfer agent
of the Fund.
The Fund pays the Manager administration fees at the annualized rate of
0.25% of such Fund's average daily net assets. 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 and are
subject to reduction in any year to the extent that the Fund's or Portfolio's
expenses (exclusive of brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary expenses) exceed the most
stringent limits prescribed by law or regulations of any state in which the
Fund's shares are offered for sale, based on the average total net asset value
of the Fund.
AIM Distributors, an affiliate of the Manager, serves as the Fund's
distributor. For the period ended May 29, 1998, GT Global, Inc. ('GT Global'),
an affiliate of the investment sub-advisor, served as the Fund's distributor.
The Fund offers Class A, Class B, and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time
of purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and re allows a portion of such charges to
dealers through which the sales are made. For the year ended October 31, 1998,
AIM Distributors and GT Global retained sales charges of $____ and $____,
respectively, for the Fund. Purchases of Class A shares exceeding $1,000,000 may
be subject to a contingent deferred sales charge ('CDSC') upon redemption, in
accordance with the Fund's current prospectus. AIM Distributors and GT Global
collected CDSCs for the year ended October 31, 1998 of $___ and $____,
respectively. AIM Distributors also makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B
shares are sold, AIM Distributors, from its own resources, pays commissions to
dealers through which the sales are made. Certain redemptions of Class B shares
made within six years of purchase are subject to CDSCs, in accordance with the
Fund's current prospectus. For the year ended October 31, 1998, AIM Distributors
and GT Global collected CDSCs in the amount of $____ and $___, respectively for
the Fund. In addition, AIM Distributors makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class B shares.
28
<PAGE>
For the period ended May 29, 1998, pursuant to the then effective
separate distribution plans adopted under the 1940 Act Rule 12b-1 by the Trust's
Board of Trustees with respect to the Fund's Class A shares ('Class A Plan') and
Class B shares ('Class B Plan'), the Fund reimbursed GT Global for a portion of
its shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Class B Plan, the Fund
was permitted to pay GT Global a service fee at the annualized rate of up to
0.25% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually were permitted to be carried forward for reimbursement in subsequent
years as long as that Plan continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule
12b-1 under the 1940 Act, the Trust's Board of Trustees adopted a Master
Distribution Plan applicable to the Fund's Class A shares ('Class A Plan') and
Class B shares ('Class B Plan'), pursuant to which the Fund compensates AIM
Distributors for the purpose of financing any activity that is intended to
result in the sale of Class A or Class B shares of the Fund. Under the Class A
Plan, the Fund compensates AIM Distributors at the annualized rate of 0.50% of
the average daily net assets of the Fund's Class A shares.
Pursuant to the Fund's Class B Plan, the Fund compensates AIM
Distributors at an annualized rate of 1.00% of the average
daily net assets of the Fund's Class B shares.
The Class A Plan and the Class B Plan (together, the 'Plans') are
designed to compensate AIM Distributors for certain promotional and other
sales-related costs, and to implement a dealer incentive program that provides
for periodic payments to selected dealers who furnish continuing personal
shareholder services to their customers who purchase and own Class A and Class B
shares of the Fund. Payments also can be directed by AIM Distributors to
Financial Institutions who have entered into service agreements with respect to
Class A and Class B shares of the Fund and who provide continuing personal
services to their customers who own Class A and Class B shares of the Fund. The
service fees payable to selected Financial Institutions are calculated at the
annual rate of 0.25% of the average daily net asset value of those Fund shares
that are held in such Institution's customers' accounts that were purchased on
or after a prescribed date set forth in the Plans.
The Manager and AIM Distributors voluntarily have undertaken to limit the
Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expense) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of
the average daily net assets of the Fund's Class A, Class B, and Advisor Class
shares, respectively. If necessary, this limitation will be effected by waivers
by the Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
The Fund, pursuant to a transfer agency and service agreement, has agreed
to pay A I M Fund Services, Inc. ('AFS') a fee for providing transfer agency and
shareholder services to the Fund. For the period September 8, 1998, to October
31, 1998, AFS was paid $_____ for such services.
For the period November 1, 1997 to September 4, 1998, GT Services, an
affiliate of the Manager and AIM Distributors, was the transfer agent of the
Fund. For performing shareholder servicing, reporting, and general transfer
agent services, GT Services received an annual maintenance fee of $17.50 per
account, a new account fee of $4.00 per account, a per transaction fee of $1.75
for all transactions other than exchanges and a per
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of AIM Global Financial Services Fund (formerly GT Global
Financial Services Fund) and Board of Trustees of AIM Investment Funds (formerly
G.T. Investment Funds, Inc.):
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 AIM Global Financial Services
Fund - Consolidated 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
6
<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 (29.2%)
Allied Irish Bank PLC: ..................................... IRE -- -- 2.9
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 (18.2%)
Citigroup, Inc. ............................................ US 39,925 1,878,970 2.2
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 (14.3%)
Newcourt Credit Group, Inc. ................................ CAN 74,400 2,447,844 2.8
Fannie Mae ................................................. US 31,000 2,195,188 2.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<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 (3.3%)
Conseco, Inc. .............................................. US 44,155 1,531,627 1.8
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>
<S> <C> <C> <C> <C>
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
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 95.0
----------- -----
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
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
----------- -----
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 $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) * ...................... 87,674,212 101.4
Other Assets and Liabilities ................................. (1,179,228) (1.4)
----------- -----
NET ASSETS ................................................... $86,494,984 100.0
----------- -----
----------- -----
</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.
9
<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>
<S> <C> <C> <C> <C>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/ CURRENCY CODE) EQUITY FIXED INCOME & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
Australia (AUSL/AUD) ................. 2.5 2.5
Canada (CAN/CAD) ..................... 4.1 4.1
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) .................... 6.2 6.2
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 2.6 57.2
Uruguay (URGY/UYP) ................... 0.8 0.8
------ ----- ----- -----
Total ............................... 95.0 2.4 2.6 100.0
------ ----- ----- -----
------ ----- ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $86,494,984.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO BUY: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ----------- -------- --------------
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 5.29%.
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.
10A
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $78,082,115) (Note 1)................................ $87,674,212
U.S. currency....................................................................... $ 938
Foreign currencies (cost $4,377).................................................... 4,380 5,318
---------
Receivable for securities sold................................................................. 4,129,995
Receivable for Fund shares sold................................................................ 104,187
Dividends and dividend withholding tax reclaims receivable..................................... 88,587
Interest receivable............................................................................ 42,125
Unamortized organizational costs (Note 1)...................................................... 7,323
Miscellaneous receivable....................................................................... 2,937
----------
Total assets................................................................................. 92,054,684
----------
Liabilities:
Payable for securities purchased............................................................... 4,776,801
Payable for open forward foreign currency contracts, net (Note 1).............................. 286,918
Payable for Fund shares repurchased............................................................ 202,495
Payable for service and distribution expenses (Note 2)......................................... 139,817
Payable for investment management and administration fees (Note 2)............................. 79,722
Payable for professional fees.................................................................. 22,216
Payable for transfer agent fees (Note 2)....................................................... 21,064
Payable for registration and filing fees....................................................... 7,076
Payable for printing and postage expenses...................................................... 5,080
Payable for Trustees' fees and expenses (Note 2)............................................... 4,040
Payable for fund accounting fees (Note 2)...................................................... 2,080
Payable for custodian fees..................................................................... 924
Other accrued expenses......................................................................... 11,367
----------
Total liabilities............................................................................ 5,559,600
Minority interest (Notes 1 & 2)................................................................ 100
----------
Net assets....................................................................................... $86,494,984
----------
----------
Class A:
Net asset value and redemption price per share ($28,433,478 DIVIDED BY 1,667,488 shares
outstanding).................................................................................. $ 17.05
----------
----------
Maximum offering price per share (100/95.25 of $17.05) *....................................... $ 17.90
----------
----------
Class B:+
Net asset value and offering price per share ($48,785,265 DIVIDED BY 2,919,965 shares
outstanding).................................................................................. $ 16.71
----------
----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($9,276,241 DIVIDED
BY 535,745 shares outstanding)................................................................ $ 17.31
----------
----------
Net assets consist of:
Paid in capital (Note 4)....................................................................... $78,345,098
Undistributed net investment income............................................................ 88,991
Accumulated net realized loss on investments and foreign currency transactions................. (1,245,109)
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........................ $86,494,984
----------
----------
</TABLE>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income: (Note 1)
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 (Note 2)....................................... 976,095
Service and distribution expenses: (Note 2)
Class A........................................................................ $ 167,776
Class B........................................................................ 565,170 732,946
----------
Transfer agent fees (Note 2)................................................................. 232,225
Professional fees............................................................................ 73,585
Registration and filing fees................................................................. 65,845
Printing and postage expenses................................................................ 44,885
Custodian fees............................................................................... 31,835
Fund accounting fees (Note 2)................................................................ 27,027
Trustees' fees and expenses (Note 2)......................................................... 17,060
Amortization of organization costs (Note 1).................................................. 12,621
Other expenses............................................................................... 9,777
---------
Total expenses before reductions........................................................... 2,223,901
---------
Expense reductions (Note 5).............................................................. (15,228)
---------
Total net expenses......................................................................... 2,208,673
---------
Net investment income.......................................................................... 140,505
---------
Net realized and unrealized gain (loss) on investments and foreign currencies:
(Note 1)
Net realized 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........................................... $ 836,217
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
----------- -----------
Increase in net assets
Operations:
Net investment income (loss)................................................. $ 140,505 $ (31,012)
Net realized gain (loss) 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....................... 836,217 9,105,811
----------- -----------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................................................... (11,044) --
From net realized gain on investments........................................ (1,099,618) (580,522)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................................................... (16,883) --
From net realized gain on investments........................................ (1,681,050) (823,692)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................................................... (2,239) --
From net realized gain on investments........................................ (222,890) (5,018)
----------- -----------
Total distributions........................................................ (3,033,724) (1,409,232)
----------- -----------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............................. 118,551,242 130,520,030
Decrease from capital shares repurchased..................................... (110,820,385) (74,514,633)
----------- -----------
Net increase from capital share transactions............................... 7,730,857 56,005,397
----------- -----------
Total increase in net assets................................................... 5,533,350 63,701,976
Net assets:
Beginning of year............................................................ 80,961,634 17,259,658
----------- -----------
End of year *................................................................ $86,494,984 $80,961,634
----------- -----------
----------- -----------
* Includes undistributed net investment income of............................. $ 88,991 $ --
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS A
--------------------------------------------------------------------
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------------------ OPERATIONS) TO
1998 (D) 1997 (D) 1996 (D) 1995 (D) OCTOBER 31, 1994
---------- ---------- ----------- ----------- ------------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.22 $ 14.20 $ 11.92 $ 11.62 $ 11.43
---------- ---------- ----------- ----------- --------
Income from investment operations:
Net investment income (loss).......... 0.07 0.04 0.05* 0.17* * 0.02* * *
Net realized and unrealized gain on
investments.......................... 0.37 3.97 2.36 0.13 0.17
---------- ---------- ----------- ----------- --------
Net increase from investment
operations......................... 0.44 4.01 2.41 0.30 0.19
---------- ---------- ----------- ----------- --------
Distributions to shareholders:
From net investment income............ (0.01) -- (0.12) -- --
From net realized gain on
investments.......................... (0.60) (0.99) (0.01) -- --
---------- ---------- ----------- ----------- --------
Total distributions................. (0.61) (0.99) (0.13) -- --
---------- ---------- ----------- ----------- --------
Net asset value, end of period.......... $ 17.05 $ 17.22 $ 14.20 $ 11.92 $ 11.62
---------- ---------- ----------- ----------- --------
---------- ---------- ----------- ----------- --------
Total investment return (c)............. 2.53% 29.91% 20.21% 2.58% 1.66 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 28,433 $ 29,639 $ 7,302 $ 5,687 $ 3,175
Ratio of net investment income (loss) to
average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 0.37% 0.23% 0.41% 1.46% 0.66 % (a)
Without expense reductions and/or
reimbursement........................ 0.35% 0.16% (0.66)% (5.34)% (7.26)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 1.97% 2.29% 2.32% 2.34% 2.40 % (a)
Without expense reductions and/or
reimbursement........................ 1.99% 2.36% 3.39% 9.14% 10.32 % (a)
Portfolio turnover rate++............... 111% 91% 103% 170% 53 % (a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment income per share would have
been reduced by $0.13 for each of the three classes.
* * Before reimbursement the net investment income per share would have
been reduced by $0.59, $0.59, $0.30 for Class A, Class B, and Advisor
Class, respectively.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.23 for Class A and Class B.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B
--------------------------------------------------------------------
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------------------ OPERATIONS) TO
1998 (D) 1997 (D) 1996 (D) 1995 (D) OCTOBER 31, 1994
---------- ---------- ----------- ----------- ------------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 16.97 $ 14.06 $ 11.83 $ 11.60 $ 11.43
---------- ---------- ----------- ----------- --------
Income from investment operations:
Net investment income (loss).......... (0.02) (0.04) (0.01) * 0.11* * 0.00* * *
Net realized and unrealized gain on
investments.......................... 0.37 3.94 2.34 0.12 0.17
---------- ---------- ----------- ----------- --------
Net increase from investment
operations......................... 0.35 3.90 2.33 0.23 0.17
---------- ---------- ----------- ----------- --------
Distributions to shareholders:
From net investment income............ (0.01) -- (0.09) -- --
From net realized gain on
investments.......................... (0.60) (0.99) (0.01) -- --
---------- ---------- ----------- ----------- --------
Total distributions................. (0.61) (0.99) (0.10) -- --
---------- ---------- ----------- ----------- --------
Net asset value, end of period.......... $ 16.71 $ 16.97 $ 14.06 $ 11.83 $ 11.60
---------- ---------- ----------- ----------- --------
---------- ---------- ----------- ----------- --------
Total investment return (c)............. 2.08% 29.13% 19.81% 1.98% 1.49 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 48,785 $ 47,585 $ 9,886 $ 4,548 $ 2,235
Ratio of net investment income (loss) to
average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... (0.13)% (0.27)% (0.09)% 0.96% 0.16 % (a)
Without expense reductions and/or
reimbursement........................ (0.15)% (0.34)% (1.16)% (5.84)% (7.76)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 2.47% 2.79% 2.82% 2.84% 2.90 % (a)
Without expense reductions and/or
reimbursement........................ 2.49% 2.86% 3.89% 9.64% 10.82 % (a)
Portfolio turnover rate++............... 111% 91% 103% 170% 53 % (a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment income per share would have
been reduced by $0.13 for each of the three classes.
* * Before reimbursement the net investment income per share would have
been reduced by $0.59, $0.59, $0.30 for Class A, Class B, and Advisor
Class, respectively.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.23 for Class A and Class B.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR CLASS+
------------------------------------------------------
JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1998 (D) 1997 (D) 1996 (D) 1995 (D)
----------- ----------- ----------- ---------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.40 $ 14.26 $ 11.95 $ 11.09
----------- ----------- ----------- ---------------
Income from investment operations:
Net investment income (loss).......... 0.17 0.12 0.12* 0.09* *
Net realized and unrealized gain on
investments.......................... 0.35 4.01 2.36 0.77
----------- ----------- ----------- ---------------
Net increase from investment
operations......................... 0.52 4.13 2.48 0.86
----------- ----------- ----------- ---------------
Distributions to shareholders:
From net investment income............ (0.01) -- (0.16) --
From net realized gain on
investments.......................... (0.60) (0.99) (0.01) --
----------- ----------- ----------- ---------------
Total distributions................. (0.61) (0.99) (0.17) --
----------- ----------- ----------- ---------------
Net asset value, end of period.......... $ 17.31 $ 17.40 $ 14.26 $ 11.95
----------- ----------- ----------- ---------------
----------- ----------- ----------- ---------------
Total investment return (c)............. 3.03% 30.52% 20.87% 7.75% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 9,276 $ 3,738 $ 72 $ 31
Ratio of net investment income (loss) to
average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 0.87% 0.73% 0.91% 1.96% (a)
Without expense reductions and/or
reimbursement........................ 0.85% 0.66% (0.16)% (4.84)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 1.47% 1.79% 1.82% 1.84% (a)
Without expense reductions and/or
reimbursement........................ 1.49% 1.86% 2.89% 8.64% (a)
Portfolio turnover rate++............... 111% 91% 103% 170%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment income per share would have
been reduced by $0.13 for each of the three classes.
* * Before reimbursement the net investment income per share would have
been reduced by $0.59, $0.59, $0.30 for Class A, Class B, and Advisor
Class, respectively.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.23 for Class A and Class B.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Global Financial Services Fund (the "Fund"), formerly GT Global Financial
Services Fund, is a separate series of AIM Investment Funds (the "Trust"),
formerly G.T. Investment Funds, Inc. The Trust is organized as a Delaware
business trust and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company. The Trust
has thirteen series of shares in operation, each series corresponding to a
distinct portfolio of investments.
The Fund invests substantially all of its investable assets in Global Financial
Services Portfolio, (the "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 Portfolio has investment objectives, policies, and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
October 31, 1998, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or A I M Advisors, Inc. (the "Manager"), which has a
nominal ($100) investment in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
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 Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund 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 by 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.
17
<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.
17A
<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.
18
<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 $6,839,546 were on loan
to brokers. The loans were secured by cash collateral of $6,903,878 received by
the Portfolio. For the year ended October 31, 1998, the Fund received fees of
$74,782.
18A
<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 Fund to meet the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the 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. The Fund currently has a capital loss carryforward of $159,536
which expires in 2006.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Portfolio and timing differences.
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $63,100. These expenses
are being amortized on a straightline basis over a five-year period.
(L) 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.
(M) 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.
(N) 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. At the end of the year, restricted
securities, if any, (excluding 144A issues), are shown at the end of the Fund's
Portfolio of Investments.
(O) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager, has a line of credit with each of BankBoston and State Street Bank and
Trust Company. The arrangements with the banks allow the Fund and certain other
Funds to borrow, on a first come, first serve basis, an aggregate maximum amount
of $250,000,000. The Fund is limited to borrowing up to 33 1/3% of the value of
the Fund's total assets. On October 31, 1998, the Fund had no loans outstanding.
19
<PAGE>
For the year ended October 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $1,290,000, with a weighted average interest rate of 6.18%. Interest expense
for the year ended October 31, 1998 was $2,214 and is included in "Other
Expenses" on the Statement of Operations.
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. As of the close of business on May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of Chancellor LGT
Asset Management, Inc. ("Chancellor LGT") consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. A I M
Distributors, Inc. ("AIM Distributors"), a wholly-owned subsidiary of the
Manager, became the Fund's distributor as of the close of business on May 29,
1998. The Trust was reorganized from a Maryland corporation into a Delaware
business trust, and the Portfolio was reorganized from a New York common law
trust into a Delaware business trust on September 8, 1998. Finally, as of the
close of business on September 4, 1998, A I M Fund Services, Inc. ("AFS"), an
affiliate of the Manager and AIM Distributors, replaced GT Global Investor
Services, Inc. ("GT Services") as the transfer agent of the Fund.
The Fund pays the Manager administration fees at the annualized rate of 0.25% of
such Fund's average daily net assets. 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.
AIM Distributors, an affiliate of the Manager, serves as the Fund's distributor.
For the period ended May 29, 1998, GT Global, Inc.
19A
<PAGE>
("GT Global") served as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and reallows a portion of such charges to dealers through which
the sales are made. For the year ended October 31, 1998, AIM Distributors and GT
Global retained sales charges of $5,454 and $9,448, respectively. Purchases of
Class A shares exceeding $1,000,000 may be subject to a contingent deferred
sales charge ("CDSC") upon redemption, in accordance with the Fund's current
prospectus. AIM Distributors and GT Global collected CDSCs for the year ended
October 31, 1998 of $3,131 and $0, respectively. AIM Distributors also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, AIM Distributors, from its own resources, pays commissions to dealers
through which the sales are made. Certain redemptions of Class B shares made
within six years of purchase are subject to CDSCs, in accordance with the Fund's
current prospectus. For the year ended October 31, 1998, AIM Distributors and GT
Global collected CDSCs in the amount of $67,472 and $120,815, respectively. In
addition, AIM Distributors makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Trust's Board of
Trustees with respect to the Fund's Class A shares ("Class A Plan") and Class B
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Trust's Board of Trustees adopted a Master Distribution Plan
applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which the Fund compensates AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.50% of the average
daily net assets of the Fund's Class A shares. Under the Class B Plan, the Fund
compensates AIM Distributors at an annualized rate of 1.00% of the average daily
net assets of the Fund's Class B shares.
The Class A Plan and the Class B Plan (together, the "Plans") are designed to
compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A and Class B shares of
the Fund. Payments also can be directed by AIM Distributors to Financial
Institutions who have entered into service agreements with respect to Class A
and Class B shares of the Fund and who provide continuing personal services to
their customers who own Class A and Class B shares of the Fund. The service fees
payable to selected Financial Institutions are calculated at the annual rate of
0.25% of the average daily net asset value of those Fund shares that are held in
such Institution's customers' accounts that were purchased on or after a
prescribed date set forth in the Plans.
20
<PAGE>
The Manager and AIM Distributors voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
Effective as of the close of business September 4, 1998, the Fund, pursuant to a
transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") an annualized fee of $24.85 per shareholder accounts that are open
during any monthly period (this fee includes all out-of-pocket expenses), and an
annualized fee of $0.70 per shareholder account that is closed during any
monthly period. Both fees shall be billed by AFS monthly in arrears on a
prorated basis of 1/12 of the annualized fee for all such accounts.
For the period November 1, 1997 to September 4, 1998, GT Services, an affiliate
of the Manager and AIM Distributors, was the transfer agent of the Fund. For
performing shareholder servicing, reporting, and general transfer agent
services, GT Services received an annual maintenance fee of $17.50 per account,
a new account fee of $4.00 per account, a per transaction fee of $1.75 for all
transactions other than exchanges and a per exchange fee of $2.25. GT Services
also was reimbursed by the Fund for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
20A
<PAGE>
The Manager is the pricing and accounting agent for the Fund and Portfolio. The
monthly fee for these services paid to the Manager is a percentage, not to
exceed 0.03% annually, of a Fund's average daily net assets. The annual fee rate
is derived based on the aggregate net assets of the funds which comprise the
following investment companies: AIM Growth Series, AIM Investment Funds, AIM
Investment Portfolios, AIM Series Trust, G.T. Global Variable Investment Series
and G.T. Global Variable Investment Trust. The fee is calculated at the rate of
0.03% of the first $5 billion of assets and 0.02% to the assets in excess of $5
billion. An amount is allocated to and paid by each such fund based on its
relative average daily net assets.
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. CAPITAL SHARES
At October 31, 1998, there were 6,000,000,000 shares of the Trust's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the AIM Global Telecommunications Fund; 400,000,000 were classified as
shares of AIM Global Government Income Fund; 200,000,000 were classified as
shares of AIM Global Health Care Fund; 200,000,000 were classified as shares of
AIM Strategic Income Fund; 200,000,000 were classified as shares of AIM
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of AIM Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of AIM Latin
American Growth Fund; 200,000,000 were classified as shares of AIM Emerging
Markets Fund; 200,000,000 were classified as shares of AIM Emerging Markets Debt
Fund; 200,000,000 were classified as shares of AIM Global Financial Services
Fund; 200,000,000 were classified as shares of AIM Global Resources Fund;
200,000,000 were classified as shares of AIM Global Infrastructure Fund;
200,000,000 were classified as shares of AIM Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Trust's were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Trust's and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
-------------------------- --------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------- ----------- -------------
Shares sold............................. 3,687,543 $ 67,971,118 3,783,353 $ 60,418,186
Shares issued in connection with
reinvestment of distributions......... 54,738 960,105 35,121 488,531
----------- ------------- ----------- -------------
3,742,281 68,931,223 3,818,474 60,906,717
Shares repurchased...................... (3,795,511) (69,778,399) (2,611,893) (41,931,634)
----------- ------------- ----------- -------------
Net increase (decrease)................. (53,230) $ (847,176) 1,206,581 $ 18,975,083
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
21
<PAGE>
CLASS B
- ----------------------------------------
Shares sold............................. 2,101,129 $ 37,907,965 4,102,099 $ 64,968,183
Shares issued in connection with
reinvestment of distributions......... 76,614 1,322,362 44,922 618,563
----------- ------------- ----------- -------------
2,177,743 39,230,327 4,147,021 65,586,746
Shares repurchased...................... (2,061,758) (36,498,531) (2,045,933) (32,384,709)
----------- ------------- ----------- -------------
Net increase............................ 115,985 $ 2,731,796 2,101,088 $ 33,202,037
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
ADVISOR CLASS
- ----------------------------------------
Shares sold............................. 563,080 $ 10,164,684 220,956 $ 4,021,549
Shares issued in connection with
reinvestment of distributions......... 12,691 225,008 359 5,018
----------- ------------- ----------- -------------
575,771 10,389,692 221,315 4,026,567
Shares repurchased...................... (254,804) (4,543,455) (11,568) (198,290)
----------- ------------- ----------- -------------
Net increase............................ 320,967 $ 5,846,237 209,747 $ 3,828,277
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
21A
<PAGE>
5. 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.
6. PROXY RESULTS (UNAUDITED)
The Special Meeting of Shareholders of the G.T. Investment Funds, Inc., now
known as AIM Investment Funds (the "Trust"), was held on May 20, 1998 at the
Trust's offices, 50 California Street, 26th Floor, San Francisco, California.
The meeting was held for the following purposes:
(1) To elect Trustees as follows: C. Derek Anderson, Frank S. Bayley, William J.
Guilfoyle, Arthur C. Patterson, Ruth H. Quigley.
(2) To approve a new Investment Management and Administration Contract and
Sub-Advisory and Sub-Administration Contract with respect to each series of
the Trust (each, a "Fund," and collectively, the "Funds").
(3) To approve replacement Rule 12b-1 plans of distribution with respect to
Class A and B Shares of the Fund.
(4) To approve changes to the fundamental investment restrictions of the Fund.
(5) To approve an agreement and plan of conversion and termination for the
Trust.
(6) To approve the conversion of the portfolios in which certain Funds invest to
Delaware business trusts.
(7) To ratify the selection of Coopers & Lybrand L.L.P., now known as
PricewaterhouseCoopers LLP, as the Trust's independent public accountants.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VOTES WITHHELD/
TRUSTEE/MATTER VOTES FOR AGAINST ABSTENTIONS
------------------------------------------------------------ -------------- ------------ -------------
(1) C. Derek Anderson........................................... 191,685,088 N/A 13,123,292
Frank S. Bayley............................................. 191,766,811 N/A 13,041,568
William J. Guilfoyle........................................ 191,828,959 N/A 12,979,420
Arthur C. Patterson......................................... 191,845,270 N/A 12,963,109
Ruth H. Quigley............................................. 191,869,887 N/A 12,938,492
(2)(a) Approval of investment management and administration
contract................................................... 2,367,476 83,815 803,685*
(2)(b) Approval of sub-advisory and sub-administration contract.... 2,340,636 101,116 813,224*
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A SHARES.............................................. 882,319 45,827 76,485
CLASS B SHARES.............................................. 1,564,175 34,241 127,535
(4)(a) Modification of Fundamental Restriction on Portfolio
Diversification............................................ 2,325,974 100,433 828,568*
(4)(b) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money............................. 2,325,387 101,020 828,568*
(4)(c) Modification of Fundamental Restriction on Making Loans..... 2,325,974 100,433 828,568*
(4)(d) Modification of Fundamental Restriction on Underwriting
Securities................................................. 2,325,974 100,433 828,568*
(4)(e) Modification of Fundamental Restriction on Real Estate
Investments................................................ 2,325,871 100,536 828,568*
(4)(f) Modification of Fundamental Restriction on Investing in
Commodities................................................ 2,325,336 101,071 828,568*
(4)(g) Elimination of Fundamental Restriction on Margin
Transactions............................................... 2,322,619 103,788 828,568*
(4)(h) Elimination of Fundamental Restriction on Pledging Assets... 2,322,032 104,375 828,568*
(4)(i) Elimination of Fundamental Restriction on Investments in
Oil, Gas and Mineral Leases and Programs................... 2,322,135 104,272 828,568*
(5) Approval of an agreement and plan of conversion and
termination with respect to the Trust...................... 190,027,469 6,362,084 94,055,040*
(6) Approval of the conversion of the portfolios in which
certain Funds invest....................................... 2,345,919 78,750 830,306*
(7) Ratification of the selection of Coopers and Lybrand L.L.P.,
now known as PricewaterhouseCoopers LLP, as the Trust's
independent public accountants............................. 191,358,779 2,114,168 11,333,063
</TABLE>
- ------------------------
* Includes Broker Non-Votes
------------------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$1,025,171 as capital gain dividends for the fiscal year ended October 31, 1998.
Pursuant to Section 854 of the Internal Revenue Code, the Fund designates 100%
of ordinary income dividends paid (including short- term capital gain
distributions, if any) by the Fund as income qualifying for the dividends
received deduction for corporations for the fiscal year ended October 31, 1998.
22
<PAGE>
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of AIM Global Infrastructure Fund (formerly GT Global
Infrastructure Fund) and Board of Trustees of AIM Investment Funds (formerly
G.T. Investment Funds, Inc.):
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 AIM Global Infrastructure
Fund - Consolidated 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
- -------------------------------------------------------------- -------- ----------- ----------- -------------
Energy (35.3%)
AES Corp.-/- ............................................... US 48,264 $ 1,975,808 3.1
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 2.9
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 (29.5%)
Vivendi .................................................... FR 11,982 2,737,841 4.4
CONSUMER SERVICES
Mannesmann AG .............................................. GER 19,000 1,871,186 3.0
WIRELESS COMMUNICATIONS
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<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)
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 (11.2%)
Kaufman and Broad Home Corp. ............................... US 42,000 1,199,625 1.9
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.
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
- -------------------------------------------------------------- -------- ----------- ----------- -------------
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 (9.1%)
Lafarge S.A. ............................................... FR 20,000 2,045,483 3.3
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 87.9
----------- -----
</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>
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 $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 9.1
----------- -----
TOTAL INVESTMENTS (cost $50,132,182) * ....................... 60,987,024 97.0
Other Assets and Liabilities ................................. 1,890,613 3.0
----------- -----
NET ASSETS ................................................... $62,877,637 100.0
----------- -----
----------- -----
</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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11
<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) ...................... 7.7 7.7
Germany (GER/DEM) .................... 5.4 5.4
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) ............... 43.3 12.1 55.4
------ ----- -----
Total ............................... 87.9 12.1 100.0
------ ----- -----
------ ----- -----
- --------------
{d} Percentages indicated are based on net assets of $62,877,637.
The accompanying notes are an integral part of the financial statements.
11A
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO BUY: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ------------ -------- --------------
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 9.12%.
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 9.12%.
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.
12
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $50,132,182) (Note 1)............................ $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
Unamortized organizational costs (Note 1).................................................. 5,980
Receivable for Fund shares sold............................................................ 3,337
Interest and miscellaneous receivable...................................................... 2,860
----------
Total assets............................................................................. 65,193,769
----------
Liabilities:
Payable for securities purchased........................................................... 1,353,704
Payable for open forward foreign currency contracts, net (Note 1).......................... 354,572
Payable for Fund shares repurchased........................................................ 271,106
Payable for service and distribution expenses (Note 2)..................................... 91,358
Payable for transfer agent fees (Note 2)................................................... 73,036
Payable for printing and postage expenses.................................................. 54,875
Payable for professional fees.............................................................. 42,068
Payable for investment management and administration fees (Note 2)......................... 25,654
Payable for registration and filing fees................................................... 23,067
Payable for custodian fees................................................................. 11,419
Payable for Trustees' fees and expenses (Note 2)........................................... 3,587
Payable for fund accounting fees (Note 2).................................................. 1,541
Other accrued expenses..................................................................... 10,045
----------
Total liabilities........................................................................ 2,316,032
Minority interest (Notes 1 & 2)............................................................ 100
----------
Net assets................................................................................... $62,877,637
----------
----------
Class A:
Net asset value and redemption price per share ($23,531,410 DIVIDED BY 1,659,002 shares
outstanding)................................................................................ $ 14.18
----------
----------
Maximum offering price per share (100/95.25 of $14.18) *..................................... $ 14.89
----------
----------
Class B:+
Net asset value and offering price per share ($32,349,296 DIVIDED BY 2,333,106 shares
outstanding)................................................................................ $ 13.87
----------
----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($6,996,931 DIVIDED
BY 483,874 shares outstanding).............................................................. $ 14.46
----------
----------
Net assets consist of:
Paid in capital (Note 4)................................................................... $47,321,830
Undistributed net investment income........................................................ 147,120
Accumulated net realized gain on investments and foreign currency transactions............. 4,932,520
Net unrealized depreciation on translation of assets and liabilities in foreign
currencies................................................................................ (378,675)
Net unrealized appreciation of investments................................................. 10,854,842
----------
Total -- representing net assets applicable to capital shares outstanding.................... $62,877,637
----------
</TABLE>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $181,399)............................... $1,666,460
Interest income............................................................................ 396,324
Securities lending income.................................................................. 45,192
----------
Total investment income.................................................................. 2,107,976
----------
Expenses:
Investment management and administration fees (Note 2)..................................... 822,356
Service and distribution expenses: (Note 2)
Class A....................................................................... $ 157,270
Class B....................................................................... 451,823 609,093
---------
Transfer agent fees (Note 2)............................................................... 300,290
Professional fees.......................................................................... 93,695
Printing and postage expenses.............................................................. 73,214
Registration and filing fees............................................................... 72,670
Custodian fees............................................................................. 39,785
Fund accounting fees (Note 2).............................................................. 22,640
Trustees' fees and expenses (Note 2)....................................................... 13,870
Amortization of organization costs (Note 1)................................................ 10,300
Other expenses............................................................................. 6,446
----------
Total expenses before reductions......................................................... 2,064,359
----------
Expenses reimbursed by A I M Advisors, Inc. (Note 2)................................... (193,053)
Expense reductions (Note 5)............................................................ (7,816)
----------
Total net expenses....................................................................... 1,863,490
----------
Net investment income........................................................................ 244,486
----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
(Note 1)
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......................................... $(3,153,339)
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED
YEAR ENDED OCTOBER
OCTOBER 31, 31,
1998 1997
----------- ----------
Increase (decrease) in net assets
Operations:
Net investment income (loss)................................................... $ 244,486 $ (405,469)
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.............. (3,153,339) 8,903,852
----------- ----------
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments.......................................... (275,162) (1,943,050)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments.......................................... (454,982) (2,733,339)
Advisor Class:
Distributions to shareholders: (Note 1)
From net realized gain on investments.......................................... (39,917) (17,129)
----------- ----------
Total distributions.......................................................... (770,061) (4,693,518)
----------- ----------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............................... 15,304,011 44,324,471
Decrease from capital shares repurchased....................................... (46,522,033) (42,934,337)
----------- ----------
Net increase (decrease) from capital share transactions...................... (31,218,022) 1,390,134
----------- ----------
Total increase (decrease) in net assets.......................................... (35,141,422) 5,600,468
Net assets:
Beginning of year.............................................................. 98,019,059 92,418,591
----------- ----------
End of year *.................................................................. $62,877,637 $98,019,059
----------- ----------
----------- ----------
* Includes undistributed net investment income of............................. $ 147,120 $ --
----------- ----------
----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS A
-----------------------------------------------------------------
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
---------------------------------------------- OPERATIONS) TO
1998 (d) 1997 (d) 1996 (d) 1995 OCTOBER 31, 1994
---------- ---------- ---------- ---------- -----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.01 $ 14.42 $ 12.11 $ 12.47 $ 11.43
---------- ---------- ---------- ---------- -----------------
Income from investment operations:
Net investment income (loss).......... 0.07* (0.01) (0.03) (0.03) ** 0.01* * *
Net realized and unrealized gain
(loss) on investments................ (0.79) 1.32 2.34 (0.33) 1.03
---------- ---------- ---------- ---------- -----------------
Net increase (decrease) from
investment operations.............. (0.72) 1.31 2.31 (0.36) 1.04
---------- ---------- ---------- ---------- -----------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.11) (0.72) -- -- --
---------- ---------- ---------- ---------- -----------------
Total distributions................. (0.11) (0.72) -- -- --
---------- ---------- ---------- ---------- -----------------
Net asset value, end of period.......... $ 14.18 $ 15.01 $ 14.42 $ 12.11 $ 12.47
---------- ---------- ---------- ---------- -----------------
---------- ---------- ---------- ---------- -----------------
Total investment return (c)............. (4.82)% 9.38% 19.08% (2.89)% 9.10% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 23,531 $ 38,281 $ 38,397 $ 36,241 $ 23,615
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement (Notes 2 & 5).......... 0.52% (0.09)% (0.19)% (0.32)% 0.41% (a)
Without expense reductions and
reimbursement........................ 0.28% (0.17)% (0.30)% (0.58)% (0.47)% (a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement (Notes 2 & 5).......... 1.99% 2.00% 2.14% 2.36% 2.40% (a)
Without expense reductions and
reimbursement........................ 2.23% 2.08% 2.25% 2.62% 3.28% (a)
Portfolio turnover rate++............... 96% 41% 41% 45% 18%
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment income per share would have
been reduced by $0.03 for Class A shares, $0.03 for Class B shares,
and $0.04 for Advisor Class shares.
* * Before reimbursement the net investment income per share would have
been reduced by $0.03 for Class A shares, $0.03 for Class B shares,
and $0.02 for Advisor Class shares.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.02 for Class A and Class B from May 31, 1994 to
October 31, 1994.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B
-----------------------------------------------------------------
MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
---------------------------------------------- OPERATIONS) TO
1998 (d) 1997 (d) 1996 (d) 1995 OCTOBER 31, 1994
---------- ---------- ---------- ---------- -----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 14.75 $ 14.24 $ 12.03 $ 12.45 $ 11.43
---------- ---------- ---------- ---------- -----------------
Income from investment operations:
Net investment income (loss).......... --* (0.09) (0.09) (0.09) ** (0.01) * * *
Net realized and unrealized gain
(loss) on investments................ (0.77) 1.32 2.30 (0.33) 1.03
---------- ---------- ---------- ---------- -----------------
Net increase (decrease) from
investment operations.............. (0.77) 1.23 2.21 (0.42) 1.02
---------- ---------- ---------- ---------- -----------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.11) (0.72) -- -- --
---------- ---------- ---------- ---------- -----------------
Total distributions................. (0.11) (0.72) -- -- --
---------- ---------- ---------- ---------- -----------------
Net asset value, end of period.......... $ 13.87 $ 14.75 $ 14.24 $ 12.03 $ 12.45
---------- ---------- ---------- ---------- -----------------
---------- ---------- ---------- ---------- -----------------
Total investment return (c)............. (5.31)% 8.83% 18.37% (3.37)% 8.92% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 32,349 $ 57,199 $ 53,678 $ 50,181 $ 30,954
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement (Notes 2 & 5).......... 0.02% (0.59)% (0.69)% (0.82)% (0.09)% (a)
Without expense reductions and
reimbursement........................ (0.22)% (0.67)% (0.80)% (1.08)% (0.97)% (a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement (Notes 2 & 5).......... 2.49% 2.50% 2.64% 2.86% 2.90% (a)
Without expense reductions and
reimbursement........................ 2.73% 2.58% 2.75% 3.12% 3.78% (a)
Portfolio turnover rate++............... 96% 41% 41% 45% 18%
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment income per share would have
been reduced by $0.03 for Class A shares, $0.03 for Class B shares,
and $0.04 for Advisor Class shares.
* * Before reimbursement the net investment income per share would have
been reduced by $0.03 for Class A shares, $0.03 for Class B shares,
and $0.02 for Advisor Class shares.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.02 for Class A and Class B from May 31, 1994 to
October 31, 1994.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR CLASS+
---------------------------------------------------
JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO
------------------------------------ OCTOBER 31,
1998 (d) 1997 (d) 1996 (d) 1995
----------- ----------- ---------- -------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.23 $ 14.52 $ 12.14 $ 12.00
----------- ----------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... 0.16* 0.05 0.04 0.02* *
Net realized and unrealized gain
(loss) on investments................ (0.82) 1.38 2.34 0.12
----------- ----------- ---------- -------------
Net increase (decrease) from
investment operations.............. (0.66) 1.43 2.38 0.14
----------- ----------- ---------- -------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.11) (0.72) -- --
----------- ----------- ---------- -------------
Total distributions................. (0.11) (0.72) -- --
----------- ----------- ---------- -------------
Net asset value, end of period.......... $ 14.46 $ 15.23 $ 14.52 $ 12.14
----------- ----------- ---------- -------------
----------- ----------- ---------- -------------
Total investment return (c)............. (4.35)% 10.10% 19.60% 1.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 6,997 $ 2,539 $ 344 $ 216
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement (Notes 2 & 5).......... 1.02% 0.41% 0.31% 0.18%(a)
Without expense reductions and
reimbursement........................ 0.78% 0.33% 0.20% (0.08)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement (Notes 2 & 5).......... 1.49% 1.50% 1.64% 1.86%(a)
Without expense reductions and
reimbursement........................ 1.73% 1.58% 1.75% 2.12%(a)
Portfolio turnover rate++............... 96% 41% 41% 45%
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment income per share would have
been reduced by $0.03 for Class A shares, $0.03 for Class B shares,
and $0.04 for Advisor Class shares.
* * Before reimbursement the net investment income per share would have
been reduced by $0.03 for Class A shares, $0.03 for Class B shares,
and $0.02 for Advisor Class shares.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.02 for Class A and Class B from May 31, 1994 to
October 31, 1994.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Global Infrastructure Fund (the "Fund"), formerly GT Global Infrastructure
Fund, is a separate series of AIM Investment Funds (the "Trust"), formerly G.T.
Investment Funds, Inc. The Trust is organized as a Delaware business trust and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as an open-end management investment company. The Trust has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
The Fund invests substantially all of its investable assets in Global
Infrastructure Portfolio, (the "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 Portfolio has investment objectives, policies, and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
October 31, 1998, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or A I M Advisors, Inc. (the "Manager"), which has a
nominal ($100) investment in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
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 Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund 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 by 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.
19
<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.
19A
<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.
20
<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 the year ended October 31, 1998, the Fund received fees of
$45,192.
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.
20A
<PAGE>
(I) TAXES
It is the intended policy of the Fund to meet the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the 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) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Portfolio and timing differences.
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500. These expenses
are being amortized on a straightline basis over a five-year period.
(L) 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.
(M) 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.
(N) 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. At the end of the year, restricted
securities, if any, (excluding 144A issues), are shown at the end of the Fund's
Portfolio of Investments.
(O) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager, has a line of credit with each of BankBoston and State Street Bank and
Trust Company. The arrangements with the banks allow the Fund and certain other
Funds to borrow, on a first come, first serve basis, an aggregate maximum amount
of $250,000,000. The Fund is limited to borrowing up to 33 1/3% of the value of
the Fund's total assets. There were no loans throughout the year. On October 31,
1998, the Fund had no loans outstanding.
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. As of the close of business on May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of Chancellor LGT
Asset Management, Inc. ("Chancellor LGT") consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. A I M
Distributors, Inc. ("AIM Distributors"), a wholly-owned subsidiary of the
Manager, is the Fund's distributor as of the close of business on May 29, 1998.
The Trust was reorganized from a Maryland corporation into a Delaware business
trust, and the Portfolio was reorganized from a New York common law trust into a
Delaware business trust on September 8, 1998. Finally, as of the close of
business on September 4, 1998, A I M Fund Services, Inc. ("AFS"), an affiliate
of the Manager and AIM Distributors, replaced GT Global Investor Services, Inc.
("GT Services") as the transfer agent of the Fund.
21
<PAGE>
The Fund pays the Manager administration fees at the annualized rate of 0.25% of
such Fund's average daily net assets. 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.
AIM Distributors, an affiliate of the Manager, serves as the Fund's distributor.
For the period ended May 29, 1998, GT Global, Inc. ("GT Global") served as the
Fund's distributor. The Fund offers Class A, Class B, and Advisor Class shares
for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and reallows a portion of such charges to dealers through which
the sales are made. For the year ended October 31, 1998, AIM Distributors and GT
Global retained sales charges of $1,469 and $3,607, respectively. Purchases of
Class A shares exceeding $1,000,000 may be subject to a contingent deferred
sales charge ("CDSC") upon redemption, in accordance with the Fund's current
prospectus. AIM Distributors and GT Global collected no CDSCs for the year ended
October 31, 1998. AIM Distributors also makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, AIM Distributors, from its own resources, pays commissions to dealers
through which the sales are made. Certain redemptions of Class B shares made
within six years of purchase are subject to CDSCs, in accordance with the Fund's
current prospectus. For the year ended October 31, 1998, AIM Distributors and GT
Global collected CDSCs in the amount of $108,570 and $244,354, respectively. In
addition, AIM Distributors makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by
21A
<PAGE>
the Trust's Board of Trustees with respect to the Fund's Class A shares ("Class
A Plan") and Class B shares ("Class B Plan"), the Fund reimbursed GT Global for
a portion of its shareholder servicing and distribution expenses. Under the
Class A Plan, the Fund was permitted to pay GT Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and was permitted to pay GT Global a
distribution fee at the annualized rate of up to 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for GT Global's expenditures incurred in providing
services as distributor. All expenses for which GT Global was reimbursed under
the Class A Plan would have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Trust's Board of Trustees adopted a Master Distribution Plan
applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which the Fund compensates AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.50% of the average
daily net assets of the Fund's Class A shares. Under the Class B Plan, the Fund
compensates AIM Distributors at an annualized rate of 1.00% of the average daily
net assets of the Fund's Class B shares.
The Class A Plan and the Class B Plan (together, the "Plans") are designed to
compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A and Class B shares of
the Fund. Payments also can be directed by AIM Distributors to Financial
Institutions who have entered into service agreements with respect to Class A
and Class B shares of the Fund and who provide continuing personal services to
their customers who own Class A and Class B shares of the Fund. The service fees
payable to selected Financial Institutions are calculated at the annual rate of
0.25% of the average daily net asset value of those Fund shares that are held in
such Institution's customers' accounts that were purchased on or after a
prescribed date set forth in the Plans.
The Manager and AIM Distributors voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
Effective as of the close of business September 4, 1998, the Fund, pursuant to a
transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") an annualized fee of $24.85 per shareholder accounts that are open
during any monthly period (this fee includes all out-of-pocket expenses), and an
annualized fee of $0.70 per shareholder account that is closed during any
monthly period. Both fees shall be billed by AFS monthly in arrears on a
prorated basis of 1/12 of the annualized fee for all such accounts.
For the period November 1, 1997 to September 4, 1998, GT Services, an affiliate
of the Manager and AIM Distributors, was the transfer agent of the Fund. For
performing shareholder servicing, reporting, and general transfer agent
services, GT Services received an annual maintenance fee of $17.50 per account,
a new account fee of $4.00 per account, a per transaction fee of $1.75 for all
transactions other than exchanges and a per exchange fee of $2.25. GT Services
also was reimbursed by the Fund for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
22
<PAGE>
The Manager is the pricing and accounting agent for the Fund and Portfolio. The
monthly fee for these services paid to the Manager is a percentage, not to
exceed 0.03% annually, of a Fund's average daily net assets. The annual fee rate
is derived based on the aggregate net assets of the funds which comprise the
following investment companies: AIM Growth Series, AIM Investment Funds, AIM
Investment Portfolios, AIM Series Trust, G.T. Global Variable Investment Series
and G.T. Global Variable Investment Trust. The fee is calculated at the rate of
0.03% of the first $5 billion of assets and 0.02% to the assets in excess of $5
billion. An amount is allocated to and paid by each such fund based on its
relative average daily net assets.
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.
22A
<PAGE>
4. CAPITAL SHARES
At October 31, 1998, there were 6,000,000,000 shares of the Trust's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the AIM Global Telecommunications Fund; 400,000,000 were classified as
shares of AIM Global Government Income Fund; 200,000,000 were classified as
shares of AIM Global Health Care Fund; 200,000,000 were classified as shares of
AIM Strategic Income Fund; 200,000,000 were classified as shares of AIM
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of AIM Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of AIM Latin
American Growth Fund; 200,000,000 were classified as shares of AIM Emerging
Markets Fund; 200,000,000 were classified as shares of AIM Emerging Markets Debt
Fund; 200,000,000 were classified as shares of AIM Global Financial Services
Fund; 200,000,000 were classified as shares of AIM Global Resources Fund;
200,000,000 were classified as shares of AIM Global Infrastructure Fund;
200,000,000 were classified as shares of AIM Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Trust's were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Trust's and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
------------------------- -------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------ ----------- ------------ ----------- ------------
Shares sold................................................. 127,344 $ 1,959,159 1,282,535 $ 19,272,428
Shares issued in connection with reinvestment of
distributions............................................. 16,842 254,490 123,795 1,776,449
----------- ------------ ----------- ------------
144,186 2,213,649 1,406,330 21,048,877
Shares repurchased.......................................... (1,036,046) (15,749,628) (1,518,962) (23,157,570)
----------- ------------ ----------- ------------
Net decrease................................................ (891,860) $(13,535,979) (112,632) $ (2,108,693)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
CLASS B
- ------------------------------------------------------------
Shares sold................................................. 378,526 $ 5,629,835 1,233,796 $ 18,394,879
Shares issued in connection with reinvestment of
distributions............................................. 24,629 365,775 164,966 2,337,575
----------- ------------ ----------- ------------
403,155 5,995,610 1,398,762 20,732,454
Shares repurchased.......................................... (1,949,017) (28,654,028) (1,288,192) (19,574,097)
----------- ------------ ----------- ------------
Net increase (decrease)..................................... (1,545,862) $(22,658,418) 110,570 $ 1,158,357
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
ADVISOR CLASS
- ------------------------------------------------------------
Shares sold................................................. 454,559 $ 7,054,949 154,643 $ 2,526,548
Shares issued in connection with reinvestment of
distributions............................................. 2,594 39,803 1,147 16,592
----------- ------------ ----------- ------------
457,153 7,094,752 155,790 2,543,140
Shares repurchased.......................................... (139,981) (2,118,377) (12,773) (202,670)
----------- ------------ ----------- ------------
Net increase................................................ 317,172 $ 4,976,375 143,017 $ 2,340,470
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
5. 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.
23
<PAGE>
6. PROXY RESULTS (UNAUDITED)
The Special Meeting of Shareholders of the G.T. Investment Funds, Inc., now
known as AIM Investment Funds (the "Trust") was held on May 20, 1998 at the
Trust's offices, 50 California Street, 26th Floor, San Francisco, California.
The meeting was held for the following purposes:
(1) To elect Trustees as follows: C. Derek Anderson, Frank S. Bayley, William
J. Guilfoyle, Arthur C. Patterson, Ruth H. Quigley.
(2) To approve a new Investment Management and Administration Contract and
Sub-Advisory and Sub-Administration Contract with respect to each series of
the Trust (each, a "Fund," and collectively, the "Funds").
(3) To approve replacement Rule 12b-1 plans of distribution with respect to
Class A and B Shares of the Fund.
(4) To approve changes to the fundamental investment restrictions of the Fund.
(5) To approve an agreement and plan of conversion and termination for the
Trust.
(6) To approve the conversion of the portfolios in which certain Funds invest
to Delaware business trusts.
(7) To ratify the selection of Coopers & Lybrand L.L.P., now known as
PricewaterhouseCoopers LLP, as the Trust's independent public accountants.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
<S> <C>
TRUSTEE/MATTER
------------------------------------------------------------------------------------------------------------------
(1) C. Derek Anderson.................................................................................................
Frank S. Bayley...................................................................................................
William J. Guilfoyle..............................................................................................
Arthur C. Patterson...............................................................................................
Ruth H. Quigley...................................................................................................
(2)(a) Approval of investment management and administration contract.....................................................
(2)(b) Approval of sub-advisory and sub-administration contract..........................................................
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A SHARES....................................................................................................
CLASS B SHARES....................................................................................................
(4)(a) Modification of Fundamental Restriction on Portfolio Diversification..............................................
(4)(b) Modification of Fundamental Restriction on Issuing Senior Securities and Borrowing Money..........................
(4)(c) Modification of Fundamental Restriction on Making Loans...........................................................
(4)(d) Modification of Fundamental Restriction on Underwriting Securities................................................
(4)(e) Modification of Fundamental Restriction on Real Estate Investments................................................
(4)(f) Modification of Fundamental Restriction on Investing in Commodities...............................................
(4)(g) Elimination of Fundamental Restriction on Margin Transactions.....................................................
(4)(h) Elimination of Fundamental Restriction on Pledging Assets.........................................................
(4)(i) Elimination of Fundamental Restriction on Investments in Oil, Gas and Mineral Leases and Programs.................
(5) Approval of an agreement and plan of conversion and termination with respect to the Company.......................
(6) Approval of the conversion of the portfolios in which certain Funds invest........................................
(7) Ratification of the selection of Coopers and Lybrand L.L.P., now known as PricewaterhouseCoopers LLP, as the
Trust's independent public accountants..........................................................................
</TABLE>
24
<PAGE>
VOTES WITHHELD/
VOTES FOR AGAINST ABSTENTIONS
--------------- ------------ --------------
(1) 191,685,088 N/A 13,123,292
191,766,811 N/A 13,041,568
191,828,959 N/A 12,979,420
191,845,270 N/A 12,963,109
191,869,887 N/A 12,938,492
(2)(a) 2,456,601 64,860 710,610*
(2)(b) 2,435,836 77,094 719,142*
(3)
1,010,727 35,515 74,004
1,450,391 37,959 123,720
(4)(a) 2,406,080 95,041 730,950*
(4)(b) 2,406,080 95,041 730,950*
(4)(c) 2,406,080 95,041 730,950*
(4)(d) 2,406,080 95,041 730,950*
(4)(e) 2,406,080 95,041 730,950*
(4)(f) 2,406,080 95,041 730,950*
(4)(g) 2,406,080 95,041 730,950*
(4)(h) 2,406,080 95,041 730,950*
(4)(i) 2,406,080 95,041 730,950*
(5) 190,027,470 6,362,084 94,055,040*
(6) 2,429,777 61,704 740,590*
(7)
191,358,779 2,114,168 11,333,063
- --------------
* Includes Broker Non-Votes
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$1,670,060 as capital gain dividends for the fiscal year ended October 31, 1998.
Pursuant to Section 854 of the Internal Revenue Code, the Fund designates 100%
of ordinary income dividends paid (including short-term capital gain
distributions, if any) by the Fund as income qualifying for the dividends
received deduction for corporations for the fiscal year ended October 31, 1998.
24A
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of AIM Global Resources Fund (formerly GT Global Natural
Resources Fund) and Board of Trustees of AIM Investment Funds (formerly G.T.
Investment Funds, Inc.):
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 AIM Global Resources Fund -
Consolidated 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
7
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- -------------------------------------------------------------- -------- ----------- ----------- -------------
Energy Sources (27.0%)
Exxon Corp. ................................................ US 21,900 $ 1,560,370 2.9
Mobil Corp. ................................................ US 19,600 1,483,475 2.8
Total Compagnie Francaise des Petroles S.A. - ADR{\/} ...... FR 24,700 1,444,950 2.7
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 2.3
Amoco Corp. ................................................ US 20,800 1,167,400 2.2
ERG SpA .................................................... ITLY 373,000 1,124,237 2.1
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 0.9
Triton Energy Ltd.-/- ...................................... US 43,900 477,413 0.9
-----------
14,419,587
-----------
Electrical & Gas Utilities (19.4%)
Montana Power Co. .......................................... US 26,000 1,126,125 2.1
AGL Resources, Inc. ........................................ US 50,000 1,046,875 1.9
Suburban Propane Partners L.P. ............................. US 46,000 868,250 1.6
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 1.1
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 1.0
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 (10.5%)
Henkel KGaA Non-Voting Preferred ........................... GER 10,645 910,076 1.7
BASF AG .................................................... GER 20,400 865,253 1.6
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.
8
<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
- -------------------------------------------------------------- -------- ----------- ----------- -------------
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 3.3
Martin Marietta Materials, Inc. ............................ US 27,900 1,368,844 2.5
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 2.5
Lafarge Corp. .............................................. US 14,600 491,838 0.9
-----------
3,386,358
-----------
Metals - Non-Ferrous (6.3%)
USEC, Inc.-/- .............................................. US 72,300 1,057,388 2.0
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 (5.1%)
Enerflex Systems Ltd. ...................................... CAN 30,600 644,733 1.2
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 (3.8%)
Centex Construction Products, Inc. ......................... US 25,400 854,075 1.6
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.
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
- -------------------------------------------------------------- -------- ----------- ----------- -------------
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 (2.6%)
Stora Kopparbergs Bergslags Aktiebolag (STORA) "A" ......... SWDN 46,280 510,332 0.9
Plum Creek Timber Company L.P. ............................. US 15,711 439,908 0.8
Crown Pacific Partners L.P. ................................ US 16,300 402,406 0.7
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 98.2
----------- -----
TOTAL INVESTMENTS (cost $57,535,092) * ...................... 52,608,775 98.2
Other Assets and Liabilities ................................. 938,248 1.8
----------- -----
NET ASSETS ................................................... $53,547,023 100.0
----------- -----
</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.
10
<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) ................. 0.9 0.9
Belgium (BEL/BEF) .................... 1.2 1.2
Canada (CAN/CAD) ..................... 11.7 11.7
France (FR/FRF) ...................... 9.3 9.3
Germany (GER/DEM) .................... 3.3 3.3
Italy (ITLY/ITL) ..................... 4.4 4.4
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) .............. 3.1 3.1
United States (US/USD) ............... 61.4 1.8 63.2
------ --- -----
Total ............................... 98.2 1.8 100.0
------ --- -----
------ --- -----
- --------------
{d} Percentages indicated are based on net assets of $53,547,023.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $57,535,092) (Note 1).............................. $52,608,775
U.S. currency..................................................................... $ 29
Foreign currencies (cost $776,844)................................................ 777,050 777,079
---------
Receivable for Fund shares sold.............................................................. 1,354,626
Receivable for securities sold............................................................... 222,089
Dividends and dividend withholding tax reclaims receivable................................... 117,621
Unamortized organizational costs (Note 1).................................................... 5,925
Miscellaneous receivable..................................................................... 1,429
----------
Total assets............................................................................... 55,087,544
----------
Liabilities:
Payable for securities purchased............................................................. 950,376
Payable for Fund shares repurchased.......................................................... 205,174
Payable for loan outstanding (Note 1)........................................................ 87,000
Payable for service and distribution expenses (Note 2)....................................... 78,542
Payable for transfer agent fees (Note 2)..................................................... 70,818
Payable for printing and postage expenses.................................................... 48,316
Payable for professional fees................................................................ 39,070
Payable for registration and filing fees..................................................... 19,436
Payable for custodian fees................................................................... 12,283
Payable for Trustees' fees and expenses (Note 2)............................................. 7,592
Payable for investment management and administration fees (Note 2)........................... 6,651
Payable for fund accounting fees (Note 2).................................................... 1,257
Other accrued expenses....................................................................... 13,906
----------
Total liabilities.......................................................................... 1,540,421
Minority interest (Notes 1 & 2).............................................................. 100
----------
Net assets..................................................................................... $53,547,023
----------
----------
Class A:
Net asset value and redemption price per share ($19,462,555 DIVIDED BY 1,776,625 shares
outstanding)................................................................................ $ 10.95
----------
----------
Maximum offering price per share (100/95.25 of $10.95) *..................................... $ 11.50
----------
----------
Class B:+
Net asset value and offering price per share ($28,995,617 DIVIDED BY 2,697,440 shares
outstanding)................................................................................ $ 10.75
----------
----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($5,088,851 DIVIDED
BY 459,330 shares outstanding).............................................................. $ 11.08
----------
----------
Net assets consist of:
Paid in capital (Note 4)..................................................................... $80,825,848
Accumulated net realized loss on investments and foreign currency transactions............... (22,352,329)
Net unrealized depreciation on translation of assets and liabilities in foreign currencies... (179)
Net unrealized depreciation of investments................................................... (4,926,317)
----------
Total -- representing net assets applicable to capital shares outstanding...................... $53,547,023
----------
</TABLE>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $94,244).................................. $ 848,873
Interest income.............................................................................. 271,397
Securities lending income.................................................................... 28,903
-------------
Total investment income.................................................................... 1,149,173
-------------
Expenses:
Investment management and administration fees (Note 2)....................................... 912,175
Service and distribution expenses: (Note 2)
Class A..................................................................... $ 188,613
Class B..................................................................... 489,016 677,629
-------------
Transfer agent fees (Note 2)................................................................. 388,595
Professional fees............................................................................ 87,855
Registration and filing fees................................................................. 78,115
Printing and postage expenses................................................................ 73,580
Custodian fees............................................................................... 40,150
Fund accounting fees (Note 2)................................................................ 24,981
Trustees' fees and expenses (Note 2)......................................................... 20,100
Amortization of organization costs (Note 1).................................................. 10,300
Other expenses............................................................................... 38,194
-------------
Total expenses before reductions........................................................... 2,351,674
-------------
Expenses reimbursed by A I M Advisors, Inc. (Note 2)..................................... (244,561)
Expense reductions (Note 5).............................................................. (45,111)
-------------
Total net expenses......................................................................... 2,062,002
-------------
Net investment loss............................................................................ (912,829)
-------------
Net realized and unrealized loss on investments: (Note 1)
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........................................... $ (61,983,465)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<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 loss................... $ (912,829) $ (2,255,658)
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... (61,983,465) 23,767,080
-------------- --------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income............ (602,063) --
From net realized gain on
investments.......................... (1,584,312) (1,915,988)
Class B:
Distributions to shareholders: (Note 1)
From net investment income............ (769,604) --
From net realized gain on
investments.......................... (2,025,190) (2,369,395)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income............ (57,919) --
From net realized gain on
investments.......................... (152,412) (134,145)
-------------- --------------
Total distributions................. (5,191,500) (4,419,528)
-------------- --------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 204,985,048 377,334,346
Decrease from capital shares
repurchased.......................... (255,936,633) (336,987,548)
-------------- --------------
Net increase (decrease) from capital
share transactions................. (50,951,585) 40,346,798
-------------- --------------
Total increase (decrease) in net
assets................................. (118,126,550) 59,694,350
Net assets:
Beginning of year..................... 171,673,573 111,979,223
-------------- --------------
End of year *......................... $ 53,547,023 $ 171,673,573
-------------- --------------
-------------- --------------
* Includes accumulated net investment
loss of................................ $ -- $ --
-------------- --------------
-------------- --------------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS A
-------------------------------------------------------------
MAY 31, 1994
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
----------------------------------------- OCTOBER 31,
1998 (d) 1997 (d) 1996 (d) 1995 1994
-------- -------- -------- -------- -----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 20.65 $ 17.43 $ 11.44 $ 12.41 $ 11.43
-------- -------- -------- -------- -----------------
Income from investment operations:
Net investment income (loss).......... (0.11) * (0.25) (0.24) 0.04* * 0.06* * *
Net realized and unrealized gain
(loss) on investments................ (8.91) 4.08 6.28 (0.98) 0.92
-------- -------- -------- -------- -----------------
Net increase (decrease) from investment
operations............................. (9.02) 3.83 6.04 (0.94) 0.98
-------- -------- -------- -------- -----------------
Distributions to shareholders:
From net investment income............ (0.19) -- (0.04) (0.03) --
From net realized gain on
investments.......................... (0.49) (0.61) (0.01) -- --
-------- -------- -------- -------- -----------------
Total distributions................. (0.68) (0.61) (0.05) (0.03) --
-------- -------- -------- -------- -----------------
Net asset value, end of period.......... $ 10.95 $ 20.65 $ 17.43 $ 11.44 $ 12.41
-------- -------- -------- -------- -----------------
-------- -------- -------- -------- -----------------
Total investment return (c)............. (45.02)% 22.64% 53.04% (7.58)% 8.57% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $19,463 $69,975 $48,729 $12,598 $14,797
Ratio of net investment income (loss) to
average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... (0.75)% (1.41)% (1.55)% 0.41% 2.63% (a)
Without expense reductions and/or
reimbursement........................ (1.06)% (1.51)% (1.65)% (0.69)% 0.65% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 1.98% 2.03% 2.20% 2.37% 2.40% (a)
Without expense reductions and/or
reimbursement........................ 2.29% 2.13% 2.30% 3.47% 4.38% (a)
Portfolio turnover rate++............... 201% 321% 94% 87% 137%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment loss per share would have been
increased by $0.04 for each class.
* * Before reimbursement the net investment income (loss) per share would
have been reduced (increased) by $0.14, $0.13, and $0.12 for Class A,
Class B, and Advisor Class, respectively.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.04 for Class A and Class B.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B
-------------------------------------------------------------
MAY 31, 1994
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
----------------------------------------- OCTOBER 31,
1998 (d) 1997 (d) 1996 (d) 1995 1994
-------- -------- -------- -------- -----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 20.37 $ 17.29 $ 11.36 $ 12.38 $ 11.43
-------- -------- -------- -------- -----------------
Income from investment operations:
Net investment income (loss).......... (0.18) * (0.33) (0.31) (0.02) * * 0.03* * *
Net realized and unrealized gain
(loss) on investments................ (8.76) 4.02 6.25 (0.98) 0.92
-------- -------- -------- -------- -----------------
Net increase (decrease) from investment
operations............................. (8.94) 3.69 5.94 (1.00) 0.95
-------- -------- -------- -------- -----------------
Distributions to shareholders:
From net investment income............ (0.19) -- -- (0.02) --
From net realized gain on
investments.......................... (0.49) (0.61) (0.01) -- --
-------- -------- -------- -------- -----------------
Total distributions................. (0.68) (0.61) (0.01) (0.02) --
-------- -------- -------- -------- -----------------
Net asset value, end of period.......... $ 10.75 $ 20.37 $ 17.29 $ 11.36 $ 12.38
-------- -------- -------- -------- -----------------
-------- -------- -------- -------- -----------------
Total investment return (c)............. (45.25)% 21.99% 52.39% (8.05)% 8.31% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $28,996 $86,812 $57,749 $13,978 $13,404
Ratio of net investment income (loss) to
average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... (1.25)% (1.91)% (2.05)% (0.09)% 2.13% (a)
Without expense reductions and/or
reimbursement........................ (1.56)% (2.01)% (2.15)% (1.19)% 0.15% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 2.48% 2.53% 2.70% 2.87% 2.90% (a)
Without expense reductions and/or
reimbursement........................ 2.79% 2.63% 2.80% 3.97% 4.88% (a)
Portfolio turnover rate++............... 201% 321% 94% 87% 137%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment loss per share would have been
increased by $0.04 for each class.
* * Before reimbursement the net investment income (loss) per share would
have been reduced (increased) by $0.14, $0.13, and $0.12 for Class A,
Class B, and Advisor Class, respectively.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.04 for Class A and Class B.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR CLASS+
-----------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------- JUNE 1, 1995 TO
1998 (d) 1997 (d) 1996 (d) OCTOBER 31, 1995
---------- ---------- ----------- ----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 20.80 $ 17.47 $ 11.47 $ 11.45
---------- ---------- ----------- --------
Income from investment operations:
Net investment income (loss).......... (0.03) * (0.14) (0.17) 0.11* *
Net realized and unrealized gain
(loss) on investments................ (9.01) 4.08 6.28 (0.09)
---------- ---------- ----------- --------
Net increase (decrease) from investment
operations............................. (9.04) 3.94 6.11 0.02
---------- ---------- ----------- --------
Distributions to shareholders:
From net investment income............ (0.19) -- (0.10) --
From net realized gain on
investments.......................... (0.49) (0.61) (0.01) --
---------- ---------- ----------- --------
Total distributions................. (0.68) (0.61) (0.11) --
---------- ---------- ----------- --------
Net asset value, end of period.......... $ 11.08 $ 20.80 $ 17.47 $ 11.47
---------- ---------- ----------- --------
---------- ---------- ----------- --------
Total investment return (c)............. (44.79)% 23.23% 53.76% 0.17 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 5,089 $ 14,886 $ 5,502 $ 95
Ratio of net investment income (loss) to
average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... (0.25)% (0.91)% (1.05)% 0.91 % (a)
Without expense reductions and/or
reimbursement........................ (0.56)% (1.01)% (1.15)% (0.19)% (a)
Ratio of expenses to average net assets:
With expense reductions and/or
reimbursement (Notes 2 & 5).......... 1.48% 1.53% 1.70% 1.87 % (a)
Without expense reductions and/or
reimbursement........................ 1.79% 1.63% 1.80% 2.97 % (a)
Portfolio turnover rate++............... 201% 321% 94% 87 %
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
* Before reimbursement the net investment loss per share would have been
increased by $0.04 for each class.
* * Before reimbursement the net investment income (loss) per share would
have been reduced (increased) by $0.14, $0.13, and $0.12 for Class A,
Class B, and Advisor Class, respectively.
* * * Before reimbursement the net investment income per share would have
been reduced by $0.04 for Class A and Class B.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares
issued.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Global Resources Fund (the "Fund"), formerly GT Global Natural Resources
Fund, is a separate series of AIM Investment Funds (the "Trust"), formerly G.T.
Investment Funds, Inc. The Trust is organized as a Delaware business trust and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as an open-end management investment company. The Trust has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
The Fund invests substantially all of its investable assets in Global Resources
Portfolio, (the "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 Portfolio has investment objectives, policies, and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
October 31, 1998, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or A I M Advisors, Inc. (the "Manager"), which has a
nominal ($100) investment in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
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 Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund 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 by 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.
18
<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.
18A
<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.
19
<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. For the year ended October 31, 1998, the Fund received fees of
$28,903.
19A
<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 Fund to meet the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the 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. The Fund currently has a capital loss carryforward of $21,789,846
which expires in 2006.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Portfolio and timing differences.
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500. These expenses
are being amortized on a straightline basis over a five-year period.
(L) 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.
(M) 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.
(N) 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. At the end of the year, restricted
securities, if any, (excluding 144A issues), are shown at the end of the Fund's
Portfolio of Investments.
(O) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager, has a line of credit with each of BankBoston and State Street Bank and
Trust Company. The arrangements with the banks allow the Fund and certain other
Funds to borrow, on a first come, first serve basis, an aggregate maximum amount
of $250,000,000. The Fund is limited to borrowing up to 33 1/3% of the value of
the Fund's total assets. On October 31, 1998, the Fund had no loan outstanding.
20
<PAGE>
For the year ended October 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $1,955,914, with a weighted average interest rate of 6.28%. Interest expense
for the year ended October 31, 1998 was $27,626 and is included in "Other
Expenses" on the Statement of Operations.
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. As of the close of business on May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of Chancellor LGT
Asset Management, Inc. ("Chancellor LGT") consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. A I M
Distributors, Inc. ("AIM Distributors"), a wholly-owned subsidiary of the
Manager, became the Fund's distributor as of the close of business on May 29,
1998. The Trust was reorganized from a Maryland corporation into a Delaware
business trust, and the Portfolio was reorganized from a New York common law
trust into a Delaware business trust on September 8, 1998. Finally, as of the
close of business on September 4, 1998, A I M Fund Services, Inc. ("AFS"), an
affiliate of the Manager and AIM Distributors, replaced GT Global Investor
Services, Inc. ("GT Services") as the transfer agent of the Fund.
The Fund pays the Manager administration fees at the annualized rate of 0.25% of
such Fund's average daily net assets. 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.
AIM Distributors, an affiliate of the Manager, serves as the Fund's distributor.
For the period ended May 29, 1998, GT Global, Inc. ("GT
20A
<PAGE>
Global") served as the Fund's distributor. The Fund offers Class A, Class B, and
Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and reallows a portion of such charges to dealers through which
the sales are made. For the year ended October 31, 1998, AIM Distributors and GT
Global retained sales charges of $3,733 and $12,704, respectively. Purchases of
Class A shares exceeding $1,000,000 may be subject to a contingent deferred
sales charge ("CDSC") upon redemption, in accordance with the Fund's current
prospectus. AIM Distributors and GT Global collected CDSCs for the year ended
October 31, 1998 of $0 and $1,704, respectively. AIM Distributors also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, AIM Distributors, from its own resources, pays commissions to dealers
through which the sales are made. Certain redemptions of Class B shares made
within six years of purchase are subject to CDSCs, in accordance with the Fund's
current prospectus. For the year ended October 31, 1998, AIM Distributors and GT
Global collected CDSCs in the amount of $130,737 and $225,161, respectively. In
addition, AIM Distributors makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Trust's Board of
Trustees with respect to the Fund's Class A shares ("Class A Plan") and Class B
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Trust's Board of Trustees adopted a Master Distribution Plan
applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which the Fund compensates AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.50% of the average
daily net assets of the Fund's Class A shares. Under the Class B Plan, the Fund
compensates AIM Distributors at an annualized rate of 1.00% of the average daily
net assets of the Fund's Class B shares.
The Class A Plan and the Class B Plan (together, the "Plans") are designed to
compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A and Class B shares of
the Fund. Payments also can be directed by AIM Distributors to Financial
Institutions who have entered into service agreements with respect to Class A
and Class B shares of the Fund and who provide continuing personal services to
their customers who own Class A and Class B shares of the Fund. The service fees
payable to selected Financial Institutions are calculated at the annual rate of
0.25% of the average daily net asset value of those Fund shares that are held in
such Institution's customers' accounts that were purchased on or after a
prescribed date set forth in the Plans.
21
<PAGE>
The Manager and AIM Distributors voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
Effective as of the close of business September 4, 1998, the Fund, pursuant to a
transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") an annualized fee of $24.85 per shareholder accounts that are open
during any monthly period (this fee includes all out-of-pocket expenses), and an
annualized fee of $0.70 per shareholder account that is closed during any
monthly period. Both fees shall be billed by AFS monthly in arrears on a
prorated basis of 1/12 of the annualized fee for all such accounts.
For the period November 1, 1997 to September 4, 1998, GT Services, an affiliate
of the Manager and AIM Distributors, was the transfer agent of the Fund. For
performing shareholder servicing, reporting, and general transfer agent
services, GT Services received an annual maintenance fee of $17.50 per account,
a new account fee of $4.00 per account, a per transaction fee of $1.75 for all
transactions other than exchanges and a per exchange fee of $2.25. GT Services
also was reimbursed by the Fund for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
21A
<PAGE>
The Manager is the pricing and accounting agent for the Fund and Portfolio. The
monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund's average daily net assets. The annual fee rate is
derived based on the aggregate net assets of the funds which comprise the
following investment companies: AIM Growth Series, AIM Investment Funds, AIM
Investment Portfolios, AIM Series Trust, G.T. Global Variable Investment Series
and G.T. Global Variable Investment Trust. The fee is calculated at the rate of
0.03% of the first $5 billion of assets and 0.02% to the assets in excess of $5
billion. An amount is allocated to and paid by each such fund based on its
relative average daily net assets.
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. CAPITAL SHARES
At October 31, 1998, there were 6,000,000,000 shares of the Trust's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the AIM Global Telecommunications Fund; 400,000,000 were classified as
shares of AIM Global Government Income Fund; 200,000,000 were classified as
shares of AIM Global Health Care Fund; 200,000,000 were classified as shares of
AIM Strategic Income Fund; 200,000,000 were classified as shares of AIM
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of AIM Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of AIM Latin
American Growth Fund; 200,000,000 were classified as shares of AIM Emerging
Markets Fund; 200,000,000 were classified as shares of AIM Emerging Markets Debt
Fund; 200,000,000 were classified as shares of AIM Global Financial Services
Fund; 200,000,000 were classified as shares of AIM Global Resources Fund;
200,000,000 were classified as shares of AIM Global Infrastructure Fund;
200,000,000 were classified as shares of AIM Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Trust's were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Trust's and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
--------------------------- ---------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------- ------------ ------------- ------------ -------------
Shares sold...................................................... 11,040,421 $ 157,454,416 14,008,426 $ 250,536,207
Shares issued in connection with reinvestment of distributions... 107,234 1,988,098 97,424 1,671,792
------------ ------------- ------------ -------------
11,147,655 159,442,514 14,105,850 252,207,999
Shares repurchased............................................... (12,759,254) (183,076,072) (13,512,928) (239,425,288)
------------ ------------- ------------ -------------
Net increase (decrease).......................................... (1,611,599) $ (23,633,558) 592,922 $ 12,782,711
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
22
<PAGE>
CLASS B
- -----------------------------------------------------------------
Shares sold...................................................... 1,539,841 $ 23,469,862 5,227,207 $ 91,103,073
Shares issued in connection with reinvestment of distributions... 132,618 2,421,607 120,229 2,044,194
------------ ------------- ------------ -------------
1,672,459 25,891,469 5,347,436 93,147,267
Shares repurchased............................................... (3,237,031) (47,877,579) (4,425,914) (75,084,090)
------------ ------------- ------------ -------------
Net increase (decrease).......................................... (1,564,572) $ (21,986,110) 921,522 $ 18,063,177
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
ADVISOR CLASS
- -----------------------------------------------------------------
Shares sold...................................................... 1,211,598 $ 19,441,802 1,573,656 $ 31,848,691
Shares issued in connection with reinvestment of distributions... 11,203 209,263 7,576 130,389
------------ ------------- ------------ -------------
1,222,801 19,651,065 1,581,232 31,979,080
Shares repurchased............................................... (1,479,078) (24,982,982) (1,180,622) (22,478,170)
------------ ------------- ------------ -------------
Net increase (decrease).......................................... (256,277) $ (5,331,917) 400,610 $ 9,500,910
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
22A
<PAGE>
5. 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.
6. PROXY RESULTS (UNAUDITED)
The Special Meeting of Shareholders of the G.T. Investment Funds, Inc., now
known as AIM Investment Funds (the "Trust"), was held on May 20, 1998 at the
Trust's offices, 50 California Street, 26th Floor, San Francisco, California.
The meeting was held for the following purposes:
(1) To elect Trustees as follows: C. Derek Anderson, Frank S. Bayley, William J.
Guilfoyle, Arthur C. Patterson, Ruth H. Quigley.
(2) To approve a new Investment Management and Administration Contract and
Sub-Advisory and Sub-Administration Contract with respect to each series of
the Trust (each, a "Fund," and collectively, the "Funds").
(3) To approve replacement Rule 12b-1 plans of distribution with respect to
Class A and B Shares of the Fund.
(4) To approve changes to the fundamental investment restrictions of the Fund.
(5) To approve an agreement and plan of conversion and termination for the
Trust.
(6) To approve the conversion of the portfolios in which certain Funds invest to
Delaware business trusts.
(7) To ratify the selection of Coopers & Lybrand L.L.P., now known as
PricewaterhouseCoopers LLP, as the Trust's independent public accountants.
The results of the proxy solicitation on the above matters were as follows:
23
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VOTES WITHHELD/
TRUSTEE/MATTER VOTES FOR AGAINST ABSTENTIONS
------------------------------------------------------------ -------------- ------------ -------------
(1) C. Derek Anderson........................................... 191,685,088 N/A 13,123,292
Frank S. Bayley............................................. 191,766,811 N/A 13,041,568
William J. Guilfoyle........................................ 191,828,959 N/A 12,979,420
Arthur C. Patterson......................................... 191,845,270 N/A 12,963,109
Ruth H. Quigley............................................. 191,869,887 N/A 12,938,492
(2)(a) Approval of investment management and administration
contract................................................... 2,628,774 84,005 1,096,053*
(2)(b) Approval of sub-advisory and sub-administration contract.... 2,609,716 93,910 1,105,207*
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A SHARES.............................................. 1,848,382 49,482 141,232
CLASS B SHARES.............................................. 1,142,152 54,567 142,678
(4)(a) Modification of Fundamental Restriction on Portfolio
Diversification............................................ 2,588,203 110,874 1,109,756*
(4)(b) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money............................. 2,558,203 110,874 1,109,756*
(4)(c) Modification of Fundamental Restriction on Making Loans..... 2,588,203 110,874 1,109,756*
(4)(d) Modification of Fundamental Restriction on Underwriting
Securities................................................. 2,588,170 110,907 1,109,756*
(4)(e) Modification of Fundamental Restriction on Real Estate
Investment................................................. 2,587,733 111,344 1,109,756*
(4)(f) Modification of Fundamental Restriction on Investing in
Commodities................................................ 2,588,203 110,874 1,109,756*
(4)(g) Elimination of Fundamental Restriction on Margin
Transactions............................................... 2,588,170 110,907 1,109,756*
(4)(h) Elimination of Fundamental Restriction on Pledging Assets... 2,588,170 110,907 1,109,756*
(4)(i) Elimination of Fundamental Restriction on Investments in
Oil, Gas and Mineral Leases and Programs................... 2,588,203 110,874 1,109,756*
(5) Approval of an agreement and plan of conversion and
termination with respect to the Trust...................... 190,027,469 6,362,084 94,055,040*
(6) Approval of the conversion of the portfolios in which
certain Funds invest....................................... 2,615,848 80,623 1,112,362*
(7) Ratification of the selection of Coopers and Lybrand L.L.P.,
now known as PricewaterhouseCoopers LLP, as the Trust's
independent public accountants............................. 191,358,779 2,114,168 11,333,063
</TABLE>
- ------------------------
* Includes Broker Non-Votes
- ------------------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$3,761,914 as capital gain dividends for the fiscal year ended October 31, 1998.
23A
AGREEMENT AND DECLARATION OF TRUST
OF
GLOBAL INVESTMENT PORTFOLIO
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of May 7, 1998, among William J. Guilfoyle, C. Derek Anderson, Frank S.
Bayley, Arthur C. Patterson, and Ruth H. Quigley, as Trustees, and each person
who becomes a Holder in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust pursuant to
the Delaware Act for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of Delaware and do hereby
declare that all money and property contributed to the trust hereunder shall be
held and managed in trust under this Agreement for the benefit of the Holders as
herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
Section 1.1. NAME. The name of the business trust created hereby is
"Global Investment Portfolio," and the Trustees may transact the Trust's affairs
in that name. The Trust shall constitute a Delaware business trust in accordance
with the Delaware Act.
Section 1.2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "Affiliated Person," "Company," "Person," and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive
releases of the Commission thereunder. The term "Commission" shall
have the meaning given it in the 1940 Act;
(b) "Agreement" means this Agreement and Declaration of Trust, as it may
be amended from time to time;
(c) "Book Capital Account" means, for any Holder of an Interest in a
particular Portfolio at any time, the Book Capital Account of the
Holder with respect to that Portfolio, maintained in accordance with
Article VIII, Section 8.1 hereof;
(d) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e)
hereof, as from time to time amended;
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(e) "Code" means the Internal Revenue Code of 1986, as amended;
(f) "Covered Person" means every person who is, or has been, a Trustee
or an officer or employee of the Trust;
(g) The "Delaware Act" refers to the Delaware Business Trust Act, 12
Del. C. Section 3801 et seq., as such Act may be amended from time
to time;
(h) "Fiscal Year" means, with respect to any Portfolio, the annual
period that ends on December 31 of each year or such other annual
period as may be determined from time to time by the Trustees;
(i) "Holder" means a record owner of an Interest in a Portfolio;
(j) "Interest" means, with respect to each Portfolio, the beneficial
interest of a Holder in that Portfolio, including all rights,
powers, and privileges accorded to such Holders in this Agreement.
The Interest of a Holder in any particular Portfolio may be
expressed as a percentage, determined by calculating, at such times
and on such bases as the Trustees shall from time to time determine,
the ratio of the Holder's Book Capital Account balance to the total
Book Capital Account balances of all Holders in that Portfolio.
Reference herein to a specified percentage in, or fraction of, the
Interests of the Holders in a Portfolio means Holders whose combined
Book Capital Account balances represent such specified percentage or
fraction of the Book Capital Account balances of all Holders in that
Portfolio;
(k) "Liabilities," when used with respect to the Trust or a Portfolio,
means all debts, liabilities, obligations, expenses, costs, and
charges incurred, contracted for, or otherwise existing with respect
to the Trust or that Portfolio;
(l) "Majority Interests Vote" means "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the
Trust or Portfolio, as applicable;
(m) "Net Asset Value" means, with respect to any Portfolio, the amount
by which the assets belonging to that Portfolio exceed its
Liabilities, all as determined by or under the Trustees' direction;
(n) "Net Profits" of a Portfolio for any given time period means the
excess of its Net Asset Value at the close of business on the last
day of such period, prior to any distributions being made with
respect to such period, over its Net Asset Value as of the opening
of business on the first day of such period, after any contributions
made on such date; and "Net Losses" of a Portfolio for any given
time period means the excess of its Net Asset Value as of the
opening of business on the first day of such period, after any
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contributions made on such date, over its Net Asset Value at the
close of business on the last day of such period, prior to any
distributions being made with respect to such period;
(o) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time;
(p) "Portfolio" means a series of Interests in the Trust established in
accordance with the provisions of Article II, Section 2.3 hereof;
(q) The "Trust" means Global Investment Portfolio, the Delaware business
trust established hereby, and reference to the Trust, when
applicable to one or more Portfolios, shall refer to each such
Portfolio;
(r) The "Trustees" means the Persons who have signed this Agreement as
trustees so long as they shall continue to serve as trustees of the
Trust in accordance with the terms hereof, and all other Persons who
may from time to time be duly appointed as Trustee in accordance
with the provisions of Article III, Section 3.4 hereof or elected as
Trustee in accordance with the provisions of Article III, Section
3.6 hereof, and reference herein to a Trustee or to the Trustees
shall refer to such Persons in their capacity as Trustees hereunder;
and
(s) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of the Trust or any Portfolio, or the Trustees on behalf of the
Trust or any Portfolio.
Section 1.3. PURPOSE. The purpose of the Trust is to conduct, operate and
carry on the business of a management investment company registered under the
1940 Act through one or more Portfolios investing primarily in securities and to
carry on such other business as the Trustees may from time to time determine
pursuant to their authority under this Agreement.
Section 1.4. CERTIFICATE OF TRUST. Immediately upon the execution of this
Agreement, the Trustees shall file a Certificate of Trust with respect to the
Trust in the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1. INTERESTS. The beneficial interest in the Trust shall be
divided into an unlimited number of Interests. The Trustees may, from time to
time, authorize the division of the Interests into one or more series, each of
which constitutes a Portfolio, in accordance with Article II, Section 2.3 of
this Agreement. All Interests issued hereunder shall be fully paid and
nonassessable.
Section 2.2. ISSUANCE OF INTERESTS. The Trustees in their discretion may,
from time to time, without vote of the Holders, issue Interests, in addition to
the then issued and outstanding Interests, to such party or parties and for such
amount and type of consideration, subject to applicable law, including cash or
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securities, at such time or times and on such terms as the Trustees may deem
appropriate, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with, the assumption of
liabilities) and businesses.
Section 2.3. ESTABLISHMENT OF PORTFOLIOS. The Trust shall consist of one
or more separate and distinct Portfolios, each with an unlimited number of
Interests unless otherwise specified. The Trustees hereby establish and
designate the Portfolios listed on Schedule A attached hereto and made a part
hereof ("Schedule A"). Each additional Portfolio shall be established by the
adoption of a resolution by the Trustees and shall be effective upon the date
stated therein (or, if no such date is stated, upon the date of such adoption).
The Interests in each Portfolio shall have the relative rights and preferences
provided for herein and such rights and preferences as may be designated by the
Trustees. The Trust shall maintain separate and distinct records for each
Portfolio and shall hold and account for the assets belonging thereto separately
from the other Trust Property and the assets belonging to any other Portfolio.
Each Interest in a Portfolio shall represent an equal beneficial interest in the
net assets belonging to that Portfolio. A Portfolio may have exclusive voting
rights with respect to matters affecting only that Portfolio.
Section 2.3.1. Subject to Article VI, Section 6.1 of this Agreement, the
Trustees shall have full power and authority, in their sole discretion without
obtaining any prior authorization or vote of the Holders of any Portfolio, to
establish and designate and to change in any manner any Portfolio; to fix such
preferences, voting powers, rights, and privileges of any Portfolio as the
Trustees may from time to time determine (but the Trustees may not change the
preferences, voting powers, rights, and privileges of Interests in a manner
materially adverse to the Holders of such Interests without the prior approval
of the affected Holders); and to take such other action with respect to the
Interests as the Trustees may deem desirable. A Portfolio may issue any number
of Interests but need not issue any Interests. At any time that there are no
Interests outstanding of any particular Portfolio previously established and
designated, the Trustees may abolish that Portfolio and the establishment and
designation thereof.
Section 2.3.2. Unless the establishing resolution or any other resolution
adopted pursuant to this Section 2.3 otherwise provides, Interests in each
Portfolio established hereunder shall have the following relative rights and
preferences:
(a) Holders shall have no preemptive or other right to subscribe to any
additional Interests or other securities issued by the Trust or the
Trustees, whether of the same or other Portfolio.
(b) All consideration received by the Trust for the issue or sale of
Interests in a particular Portfolio, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange, or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall be held and accounted for
separately from the other assets of the Trust and of every other
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Portfolio and may be referred to herein as "assets belonging to"
that Portfolio. The assets belonging to a particular Portfolio shall
belong to that Portfolio for all purposes, and to no other
Portfolio, subject only to the rights of creditors of that
Portfolio. In addition, any assets, income, earnings, profits, or
funds, or payments and proceeds with respect thereto, which are not
readily identifiable as belonging to any particular Portfolio shall
be allocated by the Trustees between and among one or more of the
Portfolios for all purposes and such assets, income, earnings,
profits, or funds, or payments and proceeds with respect thereto,
shall be assets belonging to that Portfolio.
(c) A particular Portfolio shall be charged with the Liabilities of that
Portfolio, and all Liabilities attributable to any particular
Portfolio shall be borne by such Portfolio. Any general Liabilities
of the Trust that are not readily identifiable as chargeable to any
particular Portfolio shall be allocated and charged by the Trustees
between or among any one or more of the Portfolios in such manner as
the Trustees in their sole discretion deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Holders in
all Portfolios for all purposes. Without limitation of the foregoing
provisions of this Subsection 2.3.2, the Liabilities incurred,
contracted for or otherwise existing with respect to a particular
Portfolio shall be enforceable against the assets of such Portfolio
only, and not against the assets of the Trust generally or the
assets belonging to any other Portfolio. Notice of this contractual
limitation of inter-Portfolio liabilities shall be set forth in the
Certificate of Trust described in Article I, Section 1.4 of this
Agreement (whether originally or by amendment), and upon the giving
of such notice in the Certificate of Trust, the statutory provisions
of Section 3804 of the Delaware Act relating to limitations on
inter-Portfolio liabilities (and the statutory effect under Section
3804 of setting forth such notice in the Certificate of Trust) shall
become applicable to the Trust and each Portfolio.
All references to Interests in this Agreement shall be deemed to be
Interests in any or all Portfolios as the context may require. All provisions
herein relating to the Trust shall apply equally to each Portfolio of the Trust,
except as the context otherwise requires.
Section 2.4. INVESTMENT IN THE TRUST; LIMITATION ON NUMBER OF HOLDERS.
Investments may be accepted by the Trust from such Persons, at such times, on
such terms, and for such consideration, which may consist of cash or tangible or
intangible property or a combination thereof, as the Trustees from time to time
may authorize. At the Trustees' sole discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which the affected
Portfolio is authorized to invest, valued as provided in applicable law. Each
such investment shall be credited to the individual Holder's account in the form
of full and fractional Interests in the Trust, in such Portfolio as the
purchaser shall select. The Trustees shall have the right to refuse to accept
investments in any Portfolio at any time without any cause or reason therefor
whatsoever. Notwithstanding anything herein to the contrary, (a) Interests shall
only be issued in a transaction or transactions not requiring registration under
the Securities Act of 1933 and (b) no Portfolio shall at any time have more than
100 Holders. In determining the number of Holders of any Portfolio, a person
owning an Interest through a partnership, grantor trust, or S corporation (a
"flow-through entity") shall be counted as a Holder if substantially all the
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value of that person's interest in the flow-through entity is attributable to
that Portfolio and a principal purpose for using a tiered structure was to
satisfy the 100-Holder condition. The Trustees shall impose such other
limitations on investments in the Portfolios as are necessary to avoid having
any Portfolio treated as a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
Section 2.5. PERSONAL LIABILITY OF HOLDERS. As provided by applicable law,
no Holder of the Trust shall be personally liable for the Liabilities incurred
by, contracted for, or otherwise existing with respect to, the Trust or any
Portfolio. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Holder or, except
as provided herein or by applicable law, to call upon any Holder for the payment
of any sum of money or assessment whatsoever other than such as the Holder may
at any time personally agree to pay by way of subscription for an Interest or
otherwise. The Holders shall be entitled, to the fullest extent permitted by
applicable law, to the same limitation of personal liability as is extended
under the Delaware General Corporation Law to stockholders of private
corporations for profit. Every note, bond, contract, or other undertaking issued
by or on behalf of the Trust or the Trustees relating to the Trust or to any
Portfolio thereof shall include a recitation limiting the obligation represented
thereby to the Trust and its assets or to one or more Portfolios thereof and the
assets belonging thereto (but the omission of such a recitation shall not
operate to bind any Holder or Trustee of the Trust).
Section 2.6. ASSENT TO AGREEMENT. Every Holder, by virtue of having
purchased an Interest, shall be held to have expressly assented to, and agreed
to be bound by, the terms hereof. The death of a Holder during the continuance
of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Holder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but only to rights of said
decedent under this Trust.
ARTICLE III
THE TRUSTEES
Section 3.1. MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the Trust
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any and all foreign jurisdictions and to do
all such other things and execute all such instruments as they deem necessary,
proper or desirable in order to promote the interests of the Trust although such
things are not herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
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The enumeration of any specific power in this Agreement shall not be
construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court or other authority.
Section 3.2. INITIAL TRUSTEES. The initial Trustees shall be the persons
named herein.
Section 3.3. TERMS OF OFFICE OF TRUSTEES. The Trustees shall hold office
during the lifetime of this Trust, and until its termination as herein provided;
except (a) that any Trustee may resign his trusteeship or may retire by written
instrument signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument, signed by at
least two-thirds of the number of Trustees prior to such removal, specifying the
date when such removal shall become effective; (c) that any Trustee who has
died, become physically or mentally incapacitated by reason of disease or
otherwise, or is otherwise unable to serve, may be retired by written instrument
signed by a majority of the other Trustees, specifying the date of his
retirement; and (d) that a Trustee may be removed at any meeting of the Holders
of the Trust by a vote of the Holders owning at least two-thirds of the
Interests.
Section 3.4. VACANCIES AND APPOINTMENT OF TRUSTEES. A vacancy shall occur
in case of the declination to serve, death, resignation, retirement or removal
of a Trustee, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees. Whenever a vacancy in the Board of Trustees shall occur,
until such vacancy is filled, the other Trustees shall have all the powers
hereunder and the certification of the other Trustees of such vacancy shall be
conclusive. In the case of an existing vacancy, the remaining Trustees may fill
such vacancy by appointment of such other person as they in their discretion
shall see fit, or may leave such vacancy unfilled or may reduce the number of
Trustees to not less than two (2) Trustees. Such appointment shall be evidenced
by a written instrument signed by a majority of the Trustees in office or by
resolution of the Trustees, duly adopted, which shall be recorded in the minutes
of a meeting of the Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation, or
removal of a Trustee or an increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at the time or
after the expected vacancy occurs. As soon as any Trustee appointed pursuant to
this Section 3.4 shall have accepted this appointment in writing and agreed in
writing to be bound by the terms of the Agreement, the Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
Section 3.5. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
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Section 3.6. NUMBER OF TRUSTEES. The number of Trustees shall initially be
five (5), and thereafter shall be such number as shall be fixed from time to
time by a majority of the Trustees; provided, however, that the number of
Trustees shall in no event be less than two (2) nor more than twelve (12). The
Holders shall elect the Trustees (other than the initial Trustees) on such dates
as the Trustees may fix from time to time.
Section 3.7. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The
declination to serve, death, resignation, retirement, removal, incapacity, or
inability of the Trustees, or any one of them, shall not operate to terminate
the Trust or to revoke any existing agency created pursuant to the terms of this
Trust Agreement.
Section 3.8. OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust and
of each Portfolio thereof shall be held separate and apart from any assets now
or hereafter held in any capacity other than as Trustee hereunder by the
Trustees or any successor Trustees. Legal title in all of the assets of the
Trust and the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the Trustees may
cause legal title to any Trust Property to be held by, or in the name of the
Trust, or in the name of any Person as nominee. No Holder shall be deemed to
have a severable ownership in any individual asset of the Trust or belonging to
any Portfolio or any right of partition or possession thereof, but each Holder
shall have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or the assets belonging to the Portfolio in
which the Holder holds an Interest. The Interests shall be personal property
giving only the rights specifically set forth in this Agreement or the Delaware
Act.
ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1. POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Holders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. Without
limiting the foregoing and subject to any applicable limitation in this
Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on, and lease any or all of the
assets of the Trust;
(b) To operate as, and to carry on the business of, an investment
company, and exercise all the powers necessary and appropriate to
the conduct of such operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging, or
otherwise subjecting as security the Trust Property; to endorse,
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guarantee, or undertake the performance of an obligation or
engagement of any other Person and to lend Trust Property;
(d) To provide for the distribution of Interests either through a
placement agent or by the Trust itself, or both;
(e) To adopt Bylaws not inconsistent with this Agreement providing for
the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve such right to the
Holders; such Bylaws shall be deemed incorporated and included in
this Agreement;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange, or such other domestic or
foreign entities as custodians of any assets of the Trust subject to
any conditions set forth in this Agreement or in the Bylaws;
(h) To set record dates in the manner provided herein or in the Bylaws;
(i) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
administrator, custodian, placement agent, or other agent or
independent contractor;
(j) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article VI, Section 6.1 hereof;
(k) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies and powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustee shall deem proper;
(l) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(m) To hold any security or property in a form not indicating any trust,
whether in bearer, book entry, unregistered, or other negotiable
form; or either in the name of the Trust or of a Portfolio or of a
custodian or a nominee or nominees, subject in either case to proper
safeguards according to the usual practice of Delaware business
trusts or investment companies;
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(n) To establish separate and distinct Portfolios with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article II hereof;
(o) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities, and expenses of the Trust to a
particular Portfolio or to apportion the same between or among two
or more Portfolios, provided that any liabilities or expenses
incurred by a particular Portfolio shall be payable solely out of
the assets belonging to that Portfolio as provided for in Article II
hereof;
(p) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security
of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust;
(q) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(r) To make distributions of income and of capital gains and capital to
Holders in the manner hereinafter provided;
(s) To establish, from time to time, a minimum investment for Holders in
the Trust or in one or more Portfolios, and to require the
redemption of the Interests of any Holder whose investment is less
than such minimum upon giving notice to such Holder;
(t) Subject to the requirements of the 1940 Act, to establish one or
more committees, to delegate any of the powers of the Trustees to
said committees, and to adopt a committee charter providing for such
responsibilities, membership (including Trustees, officers, or other
agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the
provisions of this Article IV, and in addition to such provisions or
any other provision of this Agreement or of the Bylaws, the Trustees
may by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the
acts of such committee were the acts of all the Trustees then in
office, with respect to the institution, prosecution, dismissal,
settlement, review, or investigation of any action, suit, or
proceeding which shall be pending or threatened to be brought before
any court, administrative agency, or other adjudicatory body;
(u) To interpret the investment policies, practices or limitations of
any Portfolios;
(v) To establish a registered office and have a registered agent in the
State of Delaware; and
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(w) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything
necessary, suitable, or proper for the accomplishment of any purpose
or the attainment of any object or the furtherance of any power
hereinbefore set forth, either alone or in association with others,
and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes,
objects, or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Portfolio, and not an action in
an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the application
of any payments made or property transferred to the Trustees or upon their
order.
Section 4.2. ISSUANCE AND REPURCHASE OF INTERESTS. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in Interests and, subject to the
provisions set forth in Articles II and VII, to apply to any such repurchase,
redemption, retirement, cancellation, or acquisition of Interests any funds or
property of the Trust, or any assets belonging to the particular Portfolio with
respect to which such Interests are issued.
Section 4.3. ACTION BY THE TRUSTEES. The Trustees shall act by majority
vote of those present at a meeting duly called (including a meeting by
telephonic or other electronic means, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at which
a quorum is present or by unanimous written consent of the Trustees (or by
written consent of a majority of the Trustees if the President of the Trust
determines that such exceptional circumstances exist, and are of such urgency,
as to make unanimous written consent impossible or impractical, which
determination shall be conclusive and binding on all Trustees and not otherwise
subject to challenge) without a meeting. A majority of the Trustees shall
constitute a quorum at any meeting. Meetings of the Trustees may be called
orally or in writing by the President of the Trust or by any two Trustees.
Notice of the time, date, and place of all meetings of the Trustees shall be
given to each Trustee by telephone, facsimile, electronic-mail, or other
electronic mechanism sent to his or her home or business address at least
twenty-four hours in advance of the meeting or in person at another meeting of
the Trustees or by written notice mailed to his or her home or business address
at least seventy-two hours in advance of the meeting. Notice need not be given
to any Trustee who attends the meeting without objecting to the lack of notice
or who signs a waiver of notice either before or after the meeting. Subject to
the requirements of the 1940 Act, the Trustees by majority vote may delegate to
any Trustee or Trustees authority to approve particular matters or take
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particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by any means by which notice may be given to
a Trustee.
Section 4.4. PRINCIPAL TRANSACTIONS. The Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any assets of
the Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with any investment adviser for the Trust or with any Affiliated Person of such
Person; and the Trust may employ any such Person, or firm or Company in which
such Person is an Affiliated Person, as broker, legal counsel, registrar,
investment adviser, administrator, custodian, or in any capacity upon customary
terms, subject in all cases to applicable laws, rules, and regulations and
orders of regulatory authorities.
Section 4.5. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust or any
Portfolio, or partly out of the principal and partly out of income, and to
charge or allocate the same to, between or among such one or more of the
Portfolios, as they deem fair, all fees, taxes, and Liabilities incurred or
arising in connection with the Trust or Portfolio, or in connection with the
management thereof, including, but not limited, to the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser and manager, administrator, auditors, counsel,
custodian, and such other agents or independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
Section 4.6. TRUSTEE COMPENSATION. The Trustees as such shall be entitled
to reasonable compensation from the Trust. They may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, administrative, legal, accounting, investment
banking, underwriting, brokerage, or investment dealer or other services and the
payment for the same by the Trust.
ARTICLE V
INVESTMENT ADVISER AND OTHER SERVICE PROVIDERS
Section 5.1. INVESTMENT ADVISER. Subject to the approval of Shareholders
as required by Article VI, Section 6.1, the Trustees may in their discretion,
from time to time, enter into an investment advisory or management contract or
contracts with respect to the Trust or any Portfolio whereby the other party or
parties to such contract or contracts shall undertake to furnish the Trustees
with such management, investment advisory, statistical, and research facilities
and services and such other facilities and services, if any, and all upon such
terms and conditions, as the Trustees may in their discretion determine.
The Trustees may authorize the investment adviser to employ, from time to
time, one or more sub-advisers to perform such of the acts and services of the
investment adviser, and upon such terms and conditions, as may be agreed upon
among the Trustees, the investment adviser, and the sub-adviser. Any references
in this Agreement to the investment adviser shall be deemed to include such
sub-advisers, unless the context otherwise requires.
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Section 5.2. OTHER SERVICE CONTRACTS. The Trustees may authorize the
engagement of an principal underwriter, transfer agent, administrator,
custodian, and similar service providers.
Section 5.3. PARTIES TO CONTRACT. Any contract of the character described
in Sections 5.1 and 5.2 of this Article V may be entered into with any
corporation, firm, partnership, trust, or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract.
Section 5.4. MISCELLANEOUS. The fact that (i) any of the Holders,
Trustees, or officers of the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, adviser, principal underwriter or distributor, or
agent of or for any Company or of or for any parent or affiliate of any Company,
with which an advisory or administration contract, placement agent, custodian,
or other agency contract may have been or may hereafter be made, or that any
such Company, or any parent or affiliate thereof, is a Holder or has an interest
in the Trust, or that (ii) any Company with which an advisory or administration
contract or placement agent, custodian, or other agency contract may have been
or may hereafter be made also has an advisory or administration contract, or
placement agent, custodian, or other agency contract with one or more other
companies, or has other business or interests shall not affect the validity of
any such contract or disqualify any Holder, Trustee, or officer of the Trust
from voting upon or executing the same or create any liability or accountability
to the Trust or its Holders.
ARTICLE VI
HOLDERS' VOTING POWERS AND MEETING
Section 6.1. VOTING POWERS. The Holders shall have power to vote only with
respect to (1) the election of Trustees as provided in Article III, Section 3.6,
(2) the removal of a Trustee as provided in Article III, Section 3.3(d), (3) any
investment advisory contract to the extent required by the 1940 Act, (4)
termination of the Trust or a Portfolio as provided in Article X, Section 10.3,
(5) amendment of this Agreement only as provided in Article X, Section 10.7, (6)
the sale of all or substantially all the assets of the Trust or of the assets
belonging to any Portfolio, unless the primary purpose of such sale is to change
the Trust's domicile or form of organization or form of business trust; (7) the
merger or consolidation of the Trust or any Portfolio with and into another
Company or portfolio, unless (A) the primary purpose of such merger or
consolidation is to change the Trust's domicile or form of organization or form
of business trust, or (B) after giving effect to such merger or consolidation,
based on the Interests outstanding as of a date selected by the Trustees, the
Holders of the Trust or such portfolio will have a majority of the outstanding
interests of the surviving Company or Portfolio, as the case may be; and (8)
such additional matters relating to the Trust as may be required by law or as
the Trustees may consider desirable.
Until Interests are issued, the Trustees may exercise all rights of
Holders and may make any action required or permitted by law, this Agreement or
any of the Bylaws of the Trust to be taken by Holders.
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On any matter submitted to a vote of the Holders, all Interests shall be
voted together, except when required by applicable law or when the Trustees have
determined that the matter affects the interests of one or more Portfolios, then
only the Holders of all such Portfolios shall be entitled to vote thereon. The
vote necessary to approve any such matter shall be set forth in this Agreement
or in the Bylaws.
ARTICLE VII
INCREASES, DECREASES, AND REDEMPTIONS OF INTERESTS
Section 1. INCREASES. Subject to the provisions hereof and such
restrictions as the Trustees, in their sole discretion, may from time to time
adopt, each Holder may increase its investment in any Portfolio at any time
without limitation. An increase in a Holder's investment in any Portfolio shall
be reflected as an increase in the Holder's Book Capital Account balance with
respect to that Portfolio and shall be included in its Interest therein.
Section 2. DECREASES AND REDEMPTIONS. Each Holder may decrease its
investment in any Portfolio or redeem its entire Interest in any Portfolio
(I.E., completely withdraw therefrom) at any time, on such terms and conditions
as the Trustees, in their sole discretion, may from time to time determine,
subject to any applicable provisions of the 1940 Act. A decrease in or
redemption of a Holder's investment in any Portfolio shall be reflected as a
decrease in the Holder's Book Capital Account balance with respect to that
Portfolio and shall be deducted from its Interest therein. Subject to the
foregoing, the Trust shall, on appropriate and adequate notice from a Holder,
decrease or redeem the Holder's Interest for an amount (which shall be treated
as a distribution for purposes of Article VIII, Section 8.1) determined by
applying a formula adopted for such purpose by resolution of the Trustees;
provided that (a) such amount shall not exceed the smaller of (i) the decrease
in the Holder's Book Capital Account balance effected by such decrease or
redemption and (ii) the positive balance in the Holder's Book Capital Account
(determined after taking into account such adjustments as are required by
Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2) but before reduction thereof
to reflect the distribution of such amount) and (b) if so authorized by the
Trustees, the Trust may, at any time and from time to time, (i) charge fees for
effecting any such decrease or redemption, at such rates as the Trustees in
their sole discretion may establish, and (ii) suspend such right of decrease or
redemption. The procedures for effecting decreases or redemptions shall be as
determined by the Trustees from time to time.
ARTICLE VIII
BOOK CAPITAL ACCOUNTS; NET ASSET VALUE;
ALLOCATIONS AND DISTRIBUTIONS
Section 8.1. BOOK CAPITAL ACCOUNTS. (a) A Book Capital Account shall be
maintained for each Holder of each Portfolio. With respect to each Portfolio,
each Holder's Book Capital Account (i) shall be credited with the amount(s) of
consideration paid by the Holder to purchase or increase its Interest in that
Portfolio and with the Holder's share of that Portfolio's Net Profits, (ii)
shall be charged with the Holder's share of that Portfolio's Net Losses,
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distributions to the Holder, and withholding taxes (if any), and (iii) shall
otherwise appropriately reflect transactions of that Portfolio and its Holders.
No interest shall be paid on any amount of consideration paid to the Trust to
purchase or increase Interests.
(b) The Book Capital Account balances of Holders of each Portfolio shall
be determined periodically at such time or times as the Trustees may determine.
The power and duty to make calculations necessary to determine such balances may
be delegated by the Trustees to an investment adviser, custodian, or such other
person as the Trustees may determine.
(c) Notwithstanding anything herein to the contrary, the Book Capital
Accounts and any related accounts (including without limitation tax capital
accounts and revaluation accounts) of the Holders and of any Portfolio shall at
all times during the full term of that Portfolio be determined and maintained in
accordance with the requirements of Treasury Regulation Section
1.704-1(b)(2)(iv). The Trustees are authorized to prescribe, in their sole
discretion, such policies for the establishment and maintenance of such accounts
("Policies") as they, in consultation with the Trust's professional advisers,
consider to be in accordance with such requirements.
Section 8.2. NET ASSET VALUE. In making a determination of Net Asset
Value, the Trustees, without Holder approval, may alter the method of valuing
portfolio securities insofar as permitted under the 1940 Act and the rules,
regulations, and interpretations thereof promulgated or issued by the Commission
or any applicable order of the Commission. The Trustees may delegate any of
their powers and duties under this Section with respect to the valuation of
assets and liabilities.
Section 8.3. ALLOCATION OF NET PROFITS AND NET LOSSES. (a) As of the close
of business each day, the Net Profits and Net Losses of each Portfolio shall be
determined and allocated to and among the Holders of that Portfolio in
proportion to their respective Interests in that Portfolio, determined as of the
opening of business on that day.
(b) Except as otherwise provided in this Section, for each taxable year of
a Portfolio, all items of income, gain, loss, deduction, and credit that are
recognized by that Portfolio for tax purposes shall be allocated pursuant to
Treasury Regulation Section 1.704-1(b) in a manner that equitably reflects
amounts credited or debited to the Book Capital Account of each Holder of that
Portfolio for such year. Allocations of such items also shall be made, where
appropriate, in accordance with Section 704(c) of the Code and the regulations
thereunder, as may be provided in any Policies adopted by the Trustees pursuant
to Article VIII, Section 8.1(c).
(c) Expenses of a Portfolio, if any, that are borne by any Holder of that
Portfolio in its individual capacity shall be specially allocated to the Holder.
(d) Notwithstanding anything to the contrary in the preceding paragraphs
(b) or (c), if any Holder of a Portfolio unexpectedly receives any adjustments,
allocations, or distributions described in Treasury Regulation Sections
1.704-1(b)(2)(II)(D)(4), (5), OR (6), items of income (including gross income)
and gain of that Portfolio shall be specially allocated to the Holder in an
amount and manner sufficient to eliminate the deficit balance in the Holder's
Book Capital Account (as determined in accordance with Treasury Regulation
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Section 1.704-1(b)(2)(ii)(D)) created by such adjustments, allocations, or
distributions as quickly as possible. Any special allocations of income and gain
of a Portfolio pursuant to this paragraph shall be taken into account in
computing subsequent allocations of income and gain of that Portfolio pursuant
to this Article, so that the net amount of any items of that Portfolio so
allocated and the income, gain, loss, deductions, and other items of that
Portfolio allocated to each Holder pursuant to this Article shall, to the extent
possible, equal the net amount that would have been allocated to each such
Holder pursuant to this Article if such special allocations had not been made.
Section 8.4. DISTRIBUTIONS. The Trustees may from time to time determine
to pay distributions to Holders of a Portfolio. The amount of such distributions
and the payment of them and whether they are paid in cash or in any other assets
belonging to a Portfolio shall be determined wholly in the Trustees' sole
discretion.
Section 8.5. POWER TO MODIFY ARTICLE. Notwithstanding any foregoing
provision of this Article, the Trustees may prescribe, in their sole discretion,
such other bases and times for determining, for financial reporting and/or tax
accounting purposes, (a) the Net Profits, Net Losses, taxable income, tax loss,
and/or net assets of any Portfolio (or, where appropriate in the Trustees' sole
judgment, of the Trust as a whole) and/or (b) the allocation of the Net Profits
or Net Losses and taxable income or tax loss so determined among, or the payment
of distributions to, the Holders of any Portfolio as they deem necessary or
desirable to enable the Trust or any Portfolio to comply with any provision of
the 1940 Act, the Code, any rule or regulation thereunder, or any order of
exemption issued by the Commission or any ruling issued by the Internal Revenue
Service, all as in effect now or as hereafter amended or modified.
ARTICLE IX
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 9.1. LIMITATION OF LIABILITY. A Trustee, when acting in such
capacity, shall not be personally liable to any person for any act, omission, or
obligation of the Trust or any Trustee; provided, however, that nothing
contained herein or in the Delaware Act shall protect any Trustee against any
liability to the Trust or to Holders 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
hereunder.
Section 9.2. INDEMNIFICATION OF COVERED PERSONS. Every Covered Person
shall be indemnified by the Trust to the fullest extent permitted by the
Delaware Act and other applicable law.
Section 9.3. INDEMNIFICATION OF HOLDERS. In case any Holder or former
Holder of the Trust shall be held to be personally liable solely by reason of
his being or having been a Holder of the Trust or any Portfolio and not because
of his acts or omissions or for some other reason, the Holder or former Holder
(or his heirs, executors, administrators, or other legal representatives, or, in
the case of a corporation or other entity, its corporate or general successor)
shall be entitled, out of the assets belonging to the applicable Portfolio, to
be held harmless from and indemnified against all loss and expense arising from
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such liability in accordance with the Bylaws and applicable law. The Trust, on
behalf of the affected Portfolio, shall, upon request by the Holder, assume the
defense of any claim made against the Holder for any act or obligation of that
Portfolio.
ARTICLE X
MISCELLANEOUS
Section 10.1. TRUST NOT A PARTNERSHIP, EXCEPT FOR INCOME TAX PURPOSES; TAX
MATTERS PARTNER. (a) This Agreement creates a trust and not a partnership, and
no Trustee shall have any power to bind personally either the Trust's officers
or any Holder. Notwithstanding the foregoing, it is intended that the Trust, or
each Portfolio if there is more than one Portfolio, be classified as a
partnership for income tax purposes, and the Trustees shall do all things that
they, in their sole discretion, determine are necessary to achieve that
objective, including (if they so determine) electing such classification on
Internal Revenue Form 8832. Any Trustee is hereby authorized to sign such form
on behalf of the Trust or any Portfolio, and the Trustees may delegate such
authority to any executive officer(s) of any Portfolio's investment adviser. The
Trustees, in their sole discretion and without the vote or consent of the
Holders, may amend this Agreement to ensure that this objective is achieved.
(b) The Trustees annually shall designate for each Portfolio a "Tax
Matters Partner" under Section 6231(a)(7) of the Code. A Portfolio's Tax Matters
Partner shall have all the powers and responsibilities of such position as
provided in the Code, provided it (1) shall promptly furnish the Internal
Revenue Service with information sufficient to cause each Holder in that
Portfolio to be treated as a "notice partner" as defined in Section 6231(a)(8)
of the Code, (2) shall not file any action or suit or extend any statute of
limitations relating to Portfolio tax matters without first notifying each such
Holder and obtaining the consent of Holders owning more than 50% of all
Interests in that Portfolio, and (3) shall not settle any action or suit
relating to Portfolio tax matters without first notifying all Holders in that
Portfolio and obtaining the consent of Holders owning at least 75% of all
Interests therein. Reasonable expenses incurred by the Tax Matters Partner, in
its capacity as such, will be treated as Portfolio expenses. Any Holder in a
Portfolio shall have the right to participate in any administrative proceedings
relating to the determination of partnership tax items at that Portfolio's
level.
Section 10.2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder in
good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
IX hereof and to Section 10.1 of this Article X, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
this Agreement, and subject to the provisions of Article IX hereof and Section
10.1 of this Article X, shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond is
obtained.
Section 10.3. TERMINATION OF TRUST OR PORTFOLIO. (a) The Trust or any
Portfolio may be terminated by (1) a Majority Interests Vote of the Trust or the
affected Portfolio, respectively, or (2) if there are fewer than 100 Holders of
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record of the Trust or of such terminating Portfolio, the Trustees pursuant to
written notice to the Holders of the Trust or the affected Portfolio .
(b) On termination of the Trust or any Portfolio pursuant to
paragraph (a),
(1) the Trust or that Portfolio thereafter shall carry on no
business except for the purpose of winding up its affairs,
(2) the Trustees shall proceed to wind up the affairs of the Trust
or that Portfolio, and all powers of the Trustees under this Agreement
with respect thereto shall continue until such affairs have been wound up,
including the powers to fulfill or discharge the contracts of the Trust or
that Portfolio, collect its assets, sell, convey, assign, exchange, or
otherwise dispose of all or any part of its remaining assets to one or
more persons at public or private sale for consideration that may consist
in whole or in part of cash, securities, or other property of any kind,
discharge or pay its liabilities, and do all other acts appropriate to
liquidate its business, and
(3) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and refunding
agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining assets ratably among the Holders of the Trust or
that Portfolio.
(c) On completion of distribution of the remaining assets pursuant to
paragraph (b), the Trust or the affected Portfolio shall terminate and the
Trustees and the Trust shall be discharged from all further liabilities
and duties hereunder with respect thereto and the rights and interests of
all parties therein shall be canceled and discharged. On termination of
the Trust, following completion of winding up of its business, the
Trustees shall cause a Certificate of Cancellation of the Trust's
Certificate of Trust to be filed in accordance with the Delaware Act,
which Certificate may be signed by any one Trustee.
Section 10.4. SALE OF ASSETS; MERGER AND CONSOLIDATION. Subject to Article
VI, Section 6.1, the Trustees may cause (i) the Trust 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 Interests in the Trust or any Portfolio to
be converted into beneficial interests in another business trust (or series
thereof) created pursuant to this Section 10.4 of Article X, or (iii) the
Interests 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 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).
Section 10.5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Agreement, or any amendment hereto or supplemental to this
Agreement shall be kept at the office of the Trust where it may be inspected by
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any Holder. In this Agreement or in any such amendment or supplemental
Agreement, references to this Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Agreement as amended
or affected by any such supplemental Agreement. All expressions like "his,"
"he," and "him," shall be deemed to include the feminine and neuter, as well as
masculine, genders. Headings are placed herein for convenience of reference only
and in case of any conflict, the text of this Agreement, rather than the
headings, shall control. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original.
Section 10.6. GOVERNING LAW. The Trust and this Agreement, and the rights,
obligations and remedies of the Trustees and Holders hereunder, are to be
governed by and construed and administered according to the Delaware Act and the
other laws of the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees, the Holders or this Trust Agreement (a)
the provisions of Section 3540 of Title 12 of the Delaware Code or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Delaware Act) pertaining to trusts which relate to or regulate (i) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents, or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding, or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents, or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount, or concentration
of trust investments or requirements relating to the titling, storage, or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the indemnification, acts
or powers of trustees or other Persons, which are inconsistent with the
limitations of liabilities or authorities and powers of the Trustees or officers
of the Trust set forth or referenced in this Agreement.
The Trust shall be of the type commonly called a "business trust," and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege, or action shall not imply that the Trust may not exercise such power
or privilege or take such actions, provided, however, that the exercise of any
such power, privilege, or action shall not otherwise violate applicable law.
Section 10.7. AMENDMENTS. Except as specifically provided herein, the
Trustees may, without any Holder vote, amend this Agreement by making an
amendment, an Agreement supplemental hereto, or an amended and restated
Agreement. Any amendment submitted to Holders that the Trustees determine would
affect the Holders of less than all Portfolios shall be authorized by vote of
only the Holders of the affected Portfolio(s), and no vote shall be required of
Holders of any Portfolio that is not affected. Notwithstanding anything else
herein to the contrary, any amendment to Article IX that would have the effect
of reducing the indemnification provided thereby to Covered Persons or to
Holders or former Holders, and any repeal or amendment of this sentence shall
each require the affirmative vote of Holders owning at least two-thirds of the
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Interests entitled to vote thereon. A certification signed by a majority of the
Trustees setting forth an amendment to this Agreement and reciting that it was
duly adopted by the Holders or by the Trustees as aforesaid, or a copy of this
Agreement, as amended, executed by a majority of the Trustees, shall be
conclusive evidence of such amendment when lodged among the records of the
Trust.
Section 10.8. PROVISIONS IN CONFLICT WITH LAW. The provisions of this
Agreement are severable, and the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with applicable law the
conflicting provision shall be deemed never to have constituted a part of this
Agreement; provided, however, that such determination shall not affect any of
the remaining provisions of this Agreement or render invalid or improper any
action taken or omitted prior to such determination. If any provision of this
Agreement shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.
Section 10.9. HOLDERS' RIGHT TO INSPECT HOLDER LIST. One or more Persons
who together and for at least six months have been Holders of at least five
percent (5%) of the outstanding Interests of any Portfolio may present to any
officer or resident agent of the Trust a written request for a list of its
Holders. Within twenty (20) days after such request is made, the Trust shall
prepare and have available on file at its principal office a list verified under
oath by one of its officers or its transfer agent or registrar which sets forth
the name and address of each Holder and the number of Interests of that
Portfolio that the Holder holds. The rights provided for herein shall not extend
to any Person who is a beneficial owner but not also a record owner of Interests
in the Trust.
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IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 7th day of May, 1998.
/s/ William J. Guilfoyle
------------------------
William J. Guilfoyle, as Trustee
/s/ C. Derek Anderson
------------------------
C. Derek Anderson, as Trustee
/s/ Frank S. Bayley
------------------------
Frank S. Bayley, as Trustee
/s/ Ruth H. Quigley
------------------------
Ruth H. Quigley, as Trustee
/s/ Arthur C. Patterson
------------------------
Arthur C. Patterson, as Trustee
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SCHEDULE A
Global Investment Portfolio shall be divided into the following
Portfolios:
Global Consumer Products and Services Portfolio
Global Financial Services Portfolio
Global Infrastructure Portfolio
Global Resources Portfolio
Date: May 7, 1998
BYLAWS
OF
GLOBAL INVESTMENT PORTFOLIO,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES............................................................1
Section 1. REGISTERED OFFICE..............................................1
Section 2. OTHER OFFICES..................................................1
ARTICLE II TRUSTEES..........................................................1
Section 1. NUMBER.........................................................1
Section 2. TERM...........................................................1
Section 3. VACANCY........................................................1
Section 4. DELEGATION OF POWER............................................2
Section 5. INABILITY TO SERVE FULL TERM...................................2
Section 6. POWERS.........................................................2
Section 7. MEETINGS OF THE TRUSTEES.......................................3
Section 8. REGULAR MEETINGS...............................................3
Section 9. QUORUM.........................................................3
Section 10. ACTION WITHOUT MEETING.........................................3
Section 11. DESIGNATION, POWERS, AND NAME OF COMMITTEES....................4
Section 12. MINUTES OF COMMITTEE...........................................4
Section 13. COMPENSATION OF TRUSTEES.......................................4
ARTICLE III OFFICERS.........................................................4
Section 1. EXECUTIVE OFFICERS.............................................4
Section 2. TERM OF OFFICE.................................................5
Section 3. PRESIDENT......................................................5
Section 4. CHAIRMAN OF THE BOARD..........................................5
Section 5. OTHER OFFICERS.................................................5
Section 6. SECRETARY......................................................5
Section 7. TREASURER......................................................6
Section 8. SURETY BOND....................................................6
ARTICLE IV MEETINGS OF SHAREHOLDERS..........................................6
Section 1. PURPOSE........................................................6
Section 2. NOMINATIONS OF TRUSTEES........................................7
Section 3. ELECTION OF TRUSTEES...........................................7
Section 4. NOTICE OF MEETINGS.............................................7
Section 5. SPECIAL MEETINGS...............................................7
Section 6. NOTICE OF SPECIAL MEETING......................................7
Section 7. CONDUCT OF SPECIAL MEETING.....................................7
Section 8. QUORUM.........................................................8
Section 9. ORGANIZATION OF MEETINGS.......................................8
Section 10. VOTING STANDARD................................................8
Section 11. VOTING PROCEDURE...............................................9
Section 12. ACTION WITHOUT MEETING.........................................9
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ARTICLE V NOTICES............................................................9
Section 1. METHODS OF GIVING NOTICE.......................................9
Section 2. WRITTEN WAIVER................................................10
ARTICLE VI GENERAL PROVISIONS...............................................10
Section 1. DIVIDENDS AND DISTRIBUTIONS...................................10
Section 2. REDEMPTIONS...................................................10
Section 3. INDEMNIFICATION...............................................11
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES....................11
Section 5. SEAL..........................................................11
Section 6. SEVERABILITY..................................................11
Section 7. HEADINGS......................................................11
ARTICLE VII AMENDMENTS......................................................12
Section 1. AMENDMENTS....................................................12
ii
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BYLAWS
OF
GLOBAL INVESTMENT PORTFOLIO,
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of Global Investment
Portfolio (the "Trust") shall be in the County of New Castle, State of Delaware.
Section 2. OTHER OFFICES. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. NUMBER. The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. TERM. The Trustees shall hold office during the lifetime of the
Trust, except (a) that any Trustee may resign his trusteeship or may retire by
written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who has died, become physically or mentally incapacitated by reason of
disease or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
Holders of the Trust.
Section 3. VACANCY. In case of the declination to serve, death,
resignation, retirement or removal of a Trustee, or a Trustee is otherwise
unable to serve, or an increase in the number of Trustees, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
<PAGE>
filled, the other Trustees shall have all the powers hereunder and the
certification of the other Trustees of such vacancy shall be conclusive. In the
case of an existing vacancy, the remaining Trustees may fill such vacancy by
appointing such other person as they in their discretion shall see fit, or may
leave such vacancy unfilled or may reduce the number of Trustees to not less
than two Trustees. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Bylaws, or
elected pursuant to Section 3 of Article IV, and the Agreement shall have
accepted this appointment in writing and agreed in writing to be bound by the
terms of the Trust Agreement, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
Section 4. DELEGATION OF POWER. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
Section 5. INABILITY TO SERVE FULL TERM. The declination to serve, death,
resignation, retirement, removal, incapacity, or inability of the Trustees, or
any one of them, shall not operate to terminate the Trust or to revoke any
existing agency created pursuant to the terms of the Agreement.
Section 6. POWERS. The Trustees shall have exclusive and absolute control
over the trust property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the trust property and business in their
own right, but with such powers of delegation as may be permitted by the
Agreement. The Trustees shall have power to conduct the business of the Trust
and carry on its operations in any and all of its branches and maintain offices
both within and without the State of Delaware, in any and all states of the
United States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of the United
States of America, and in any foreign jurisdiction and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of these Bylaws and the Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
Section 7. MEETINGS OF THE TRUSTEES. The Trustees of the Trust may hold
meetings, both regular and special, either within or without the State of
Delaware.
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Section 8. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held each year, at such time and place as the Board of Trustees may
determine.
Section 9. NOTICE OF MEETINGS. Notice of the time, date, and place of all
meetings of the Trustees shall be given to each Trustee by telephone, facsimile,
electronic-mail, or other electronic mechanism sent to his or her home or
business address at least twenty-four hours in advance of the meeting or in
person at another meeting of the Trustees or by written notice mailed to his or
her home or business address at least seventy-two hours in advance of the
meeting.
Section 10. QUORUM. At all meetings of the Trustees, a majority of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Bylaws. If a quorum shall not be
present at any meeting of the Board of Trustees, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Agreement or these Bylaws, any action required or permitted to be taken at any
meeting of the Board of Trustees or of any committee thereof may be taken
without a meeting by unanimous written consent of the Trustees or committee
members (or by written consent of a majority of the Trustees if the President of
the Trust determines that such exceptional circumstances exist, and are of such
urgency, as to make unanimous written consent impossible or impractical, which
determination shall be conclusive and binding on all Trustees and not otherwise
subject to challenge) and the writing or writings are filed with the minutes of
proceedings of the board or committee.
Section 12. DESIGNATION, POWERS, AND NAME OF COMMITTEES. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustee as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 13. MINUTES OF COMMITTEE. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
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Section 14. COMPENSATION OF TRUSTEES. The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer or
other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The initial executive officers of the Trust
shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Bylaws to be
executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. Unless otherwise specifically determined by the
Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power to
the President with respect to any other officer. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees or the President. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 3. PRESIDENT. The President shall be the chief executive officer
of the Trust and, subject to the Board of Trustees, shall generally manage the
business and affairs of the Trust. If there is no Chairman of the Board, or if
the Chairman of the Board has been appointed but is absent, the President shall,
if present, preside at all meetings of the Holders and the Board of Trustees.
Section 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall
preside at all meetings of the Holders and the Board of Trustees, if the
Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
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Section 5. OTHER OFFICERS. The Chairman of the Board or one or more Vice
Presidents shall have and exercise such powers and duties of the President in
the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by the
President. In the absence or inability to act of the President, the powers and
duties of the President not otherwise assigned by the Board of Trustees or the
President shall devolve upon the Chairman of the Board, or in the Chairman's
absence, the Vice Presidents in the order of their election.
Section 6. SECRETARY. The Secretary shall (a) have custody of the seal of
the Trust; (b) attend meetings of the shareholders, the Board of Trustees, and
any committees of Trustees and keep the minutes of such meetings of Holders,
Board of Trustees and any committees thereof; and (c) issue all notices of the
Trust. The Secretary shall have charge of the Holder records and such other
books and papers as the Board may direct, and shall perform such other duties as
may be incidental to the office or which are assigned by the Board of Trustees.
The Secretary shall also keep or cause to be kept a Holder book, which may be
maintained by means of computer systems, containing the names, alphabetically
arranged, of all persons who are Holders, showing their places of residence, the
number and class or series of any class of shares of beneficial interest held by
them, respectively, and the dates when they became the record owners thereof,
and such book shall be open for inspection as prescribed by the laws of the
State of Delaware.
Section 7. TREASURER. The Treasurer shall have the care and custody of the
funds and securities of the Trust and shall deposit the same in the name of the
Trust in such bank or banks or other depositories, subject to withdrawal in such
manner as these Bylaws or the Board of Trustees may determine. The Treasurer
shall, if required by the Board of Trustees, give such bond for the faithful
discharge of duties in such form as the Board of Trustees may require.
Section 8. SURETY BOND. The Trustees may require any officer or agent of
the Trust to execute a bond (including, without limitation, any bond required by
the Investment Company Act of 1940, as amended ("1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
ARTICLE IV
MEETINGS OF HOLDERS
Section 1. PURPOSE. All meetings of the Holders for the election of
Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
Holders may be held for any purpose determined by the Trustees and may be held
at such time and place, within or without the State of Delaware as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof. At all meetings of the Holders, every Holder of record entitled to vote
5
<PAGE>
thereat shall be entitled to vote at such meeting either in person or by written
proxy signed by the Holder or by his duly authorized attorney in fact. A Holder
may duly authorize such attorney in fact through written, electronic,
telephonic, computerized, facsimile, telecommunication, telex or oral
communication or by any other form of communication. Unless a proxy provides
otherwise, such proxy is not valid more than eleven months after its date. A
proxy with respect to shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the proxy
the Trust receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a Holder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger.
Section 2. NOMINATIONS OF TRUSTEES. Nominations of individuals for
election to the board of trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any Holder of the Trust may submit names of individuals
to be considered by the Nominating Committee or the Board of Trustees, as
applicable, provided, however, (i) that such person was a Holder of record at
the time of submission of such names and is entitled to vote at the meeting, and
(ii) that the Nominating Committee or the Board of Trustees, as applicable,
shall make the final determination of persons to be nominated.
Section 3. ELECTION OF TRUSTEES. All meetings of Holders for the purpose
of electing Trustees shall be held on such date and at such time as shall be
designated from time to time by the Trustees and stated in the notice of the
meeting, at which the Holders shall elect by a plurality vote any number of
Trustees as the notice for such meeting shall state are to be elected, and
transact such other business as may properly be brought before the meeting in
accordance with Section 1 of this Article IV.
Section 4. NOTICE OF MEETINGS. Written notice of any meeting stating the
place, date, and hour of the meeting shall be given to each Holder entitled to
vote at such meeting not less than ten days before the date of the meeting in
accordance with Article V hereof.
Section 5. SPECIAL MEETINGS. Special meetings of the Holders, for any
purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the Holders solely for the purpose of removing
one or more Trustees, when requested in writing so to do by the record Holders
of not less than ten percent of the outstanding Interest in the Trust.
Section 6. NOTICE OF SPECIAL MEETING. Written notice of a special meeting
stating the place, date, and hour of the meeting and the purpose of purposes for
which the meeting is called, shall be given not less than ten days before the
date of the meeting, to each Holder entitled to vote at such meeting.
Section 7. CONDUCT OF SPECIAL MEETING. Business transacted at any
special meeting of Holders shall be limited to the purpose stated in the
notice.
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Section 8. QUORUM. The Holders of one-third of the Interests that are
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the Holders
for the transaction of business except as otherwise provided by applicable law
or by the Agreement. If, however, such quorum shall not be present or
represented at any meeting of the Holders, the vote of the Holders of a majority
of Interests cast shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting, at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 9. ORGANIZATION OF MEETINGS.
(a) The Chairman of the Board of Trustees shall preside at each meeting of
Holders. In the absence of the Chairman of the Board, the meeting shall be
chaired by the President, or if the President shall not be present, by a Vice
President. In the absence of all such officers, the meeting shall be chaired by
a person elected for such purpose at the meeting. The Secretary of the Trust, if
present, shall act as Secretary of such meetings, or if the Secretary is not
present, an Assistant Secretary of the Trust shall so act, and if no Assistant
Secretary is present, then a person designated by the Secretary of the Trust
shall so act, and if the Secretary has not designated a person, then the meeting
shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to make such
rules and regulations for the conduct of meetings of Holders as it shall deem
necessary, appropriate or convenient. Subject to such rules and regulations of
the Board of Trustees, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are necessary, appropriate or
convenient for the proper conduct of the meeting, including, without limitation,
establishing: an agenda or order of business for the meeting; rules and
procedures for maintaining order at the meeting and the safety of those present;
limitations on participation in such meeting to Holders of record of the Trust
and their duly authorized and constituted proxies, and such other persons as the
chairman shall permit; restrictions on entry to the meeting after the time fixed
for the commencement thereof; limitations on the time allotted to questions or
comments by participants; and regulation of the opening and closing of the polls
for balloting on matters which are to be voted on by ballot, unless and to the
extent the Board of Trustees or the chairman of the meeting determines that
meetings of Holders shall not be required to be held in accordance with the
rules of parliamentary procedure.
Section 10. VOTING STANDARD. When a quorum is present at any meeting, the
vote of the Holders of a majority of the Interests cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Bylaws, or applicable
contract, a different vote is required, in which case such express provision
shall govern and control the decision of such question.
Section 11. VOTING PROCEDURE. Each Interest shall be entitled to vote in
proportion to its share in the Trust. On any matter submitted to a vote of the
Holders, the Interests shall be voted together, except when required by
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<PAGE>
applicable law or when the Trustees have determined that the matter affects the
interests of one or more Portfolios (or Classes), then only the Holders of such
Portfolios (or Classes) shall be entitled to vote thereon.
Section 12. ACTION WITHOUT MEETING. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
Holders of the Trust, or any action which may be taken at any meeting of such
Holders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the Holders of outstanding Interests having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all Interests entitled to vote thereon were present and voted.
Prompt notice of the taking of any such action without a meeting by less than
unanimous written consent shall be given to those Holders who have not consented
in writing.
Section 13. FIXING RECORD DATE. In order that the Trustees may determine
the Holders entitled to notice of or to vote at any meeting of Holders or any
adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by Holder consent in writing without
a meeting, nor more than ninety days prior to any other action. A determination
of Holders of record entitled to notice of or to vote at a meeting of Holders
shall apply to any adjournment of the meeting; provided, however, that the Board
of Trustees may fix a new record date for the adjourned meeting.
ARTICLE V
NOTICES
Section 1. METHODS OF GIVING NOTICE. Whenever, under the provisions of
applicable law or of the Agreement or of these Bylaws, notice is required to be
given to any Trustee or Holder, it shall not, unless otherwise provided herein,
be construed to mean personal notice, but such notice may be given orally in
person, or by telephone (promptly confirmed in writing) or in writing, by mail
addressed to such Trustee or Holder, at his address as it appears on the records
of the Trust, with postage thereon prepaid, and such notice shall be deemed to
be given at the time when the same shall be deposited in the United States mail.
Notice to Trustees or members of a committee may also be given by telex,
telegram, telecopier or via overnight courier. If sent by telex or telecopier,
notice to a Trustee or member of a committee shall be deemed to be given upon
transmittal; if sent by telegram, notice to a Trustee or member of a committee
shall be deemed to be given when the telegram, so addressed, is delivered to the
telegraph company, and if sent via overnight courier, notice to a Trustee or
member of a committee shall be deemed to be given when delivered against a
receipt therefor.
8
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Section 2. WRITTEN WAIVER. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. DIVIDENDS AND OTHER DISTRIBUTIONS. The Trustees may from time
to time declare and pay dividends and make other distributions with respect to
any Portfolio, or Class thereof, which may be from income, capital gains or
capital. The amount of such dividends or other distributions and the payment of
them and whether they are in cash or any other Trust Property shall be wholly in
the discretion of the Trustees.
Section 2. REDEMPTIONS. Any Holder of record of shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to redeem
his Interests, or any portion thereof, subject to the terms and conditions set
forth in the registration statement in effect from time to time. The redemption
price may in any case or cases be paid wholly or partly in kind if the Trustees
determine that such payment is advisable in the interest of the remaining
shareholders of the Portfolio or Class thereof for which the shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which the
Trust is formed.
Section 3. INDEMNIFICATION. Every person who is, or has been, a Trustee or
officer of the Trust shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Business Trust Act, these Bylaws and other applicable
law.
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES.To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to indemnification for such expenses, and
further provided that (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust is insured against losses arising
out of any such advance payments, or (iii) either a majority of the Trustees who
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are not interested persons (as defined in the 1940 Act) of the Trust nor parties
to the matter, or independent legal counsel in a written opinion shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe that such Covered Person
will not be disqualified from indemnification for such expenses.
Section 5. SEAL. The business seal shall have inscribed thereon the name
of the business trust, the year of its organization and the word "Business Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. SEVERABILITY. The provisions of these Bylaws are severable. If
the Board of Trustees determines, with the advice of counsel, that any provision
hereof conflicts with the 1940 Act, the regulated investment company provisions
of the Internal Revenue Code, or other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of these
Bylaws; provided, however, that such determination shall not affect any of the
remaining provisions of these Bylaws or render invalid or improper any action
taken or omitted prior to such determination. If any provision hereof shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of these Bylaws.
Section 7. HEADINGS. Headings are placed in these Bylaws for convenience
of reference only and in case of any conflict, the text of these Bylaws rather
than the headings shall control.
ARTICLE VII
AMENDMENTS
Section 1. AMENDMENTS. These Bylaws may be altered or repealed at any
regular or special meeting of the Board of Trustees without prior notice. These
Bylaws may also be altered or repealed at any special meeting of the Holders,
but only if the Board of Trustees resolves to put a proposed alteration or
repealer to the vote of the Holders and notice of such alteration or repealer is
contained in a notice of the special meeting being held for such purpose.
10
AMENDED AND RESTATED BYLAWS
OF
GLOBAL INVESTMENT PORTFOLIO,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
AMENDED EFFECTIVE DECEMBER 10, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES............................................................1
Section 1. REGISTERED OFFICE.............................................1
Section 2. OTHER OFFICES.................................................1
ARTICLE II TRUSTEES..........................................................1
Section 1. NUMBER.........................................................1
Section 2. TERM...........................................................1
Section 3. VACANCY........................................................1
Section 4. DELEGATION OF POWER............................................2
Section 5. INABILITY TO SERVE FULL TERM...................................2
Section 6. POWERS.........................................................2
Section 7. MEETINGS OF THE TRUSTEES.......................................3
Section 8. REGULAR MEETINGS...............................................3
Section 9. QUORUM.........................................................3
Section 10. ACTION WITHOUT MEETING.........................................3
Section 11. DESIGNATION, POWERS, AND NAME OF COMMITTEES....................4
Section 12. MINUTES OF COMMITTEE...........................................4
Section 13. COMPENSATION OF TRUSTEES,......................................4
ARTICLE III OFFICERS.........................................................4
Section 1. EXECUTIVE OFFICERS.............................................4
Section 2. TERM OF OFFICE.................................................5
Section 3. PRESIDENT......................................................5
Section 4. CHAIRMAN OF THE BOARD..........................................5
Section 5. OTHER OFFICERS.................................................5
Section 6. SECRETARY......................................................5
Section 7. TREASURER......................................................6
Section 8. SURETY BOND....................................................6
ARTICLE IV MEETINGS OF SHAREHOLDERS..........................................6
Section 1. PURPOSE........................................................6
Section 2. NOMINATIONS OF TRUSTEES........................................7
Section 3. ELECTION OF TRUSTEES...........................................7
Section 4. NOTICE OF MEETINGS.............................................7
Section 5. SPECIAL MEETINGS...............................................7
Section 6. NOTICE OF SPECIAL MEETING......................................7
Section 7. CONDUCT OF SPECIAL MEETING.....................................7
Section 8. QUORUM.........................................................8
Section 9. ORGANIZATION OF MEETINGS.......................................8
Section 10. VOTING STANDARD................................................8
Section 11. VOTING PROCEDURE...............................................9
Section 12. ACTION WITHOUT MEETING.........................................9
ARTICLE V NOTICES............................................................9
Section 1. METHODS OF GIVING NOTICE.......................................9
Section 2. WRITTEN WAIVER................................................10
ARTICLE VI GENERAL PROVISIONS...............................................10
Section 1. DIVIDENDS AND DISTRIBUTIONS...................................10
Section 2. REDEMPTIONS...................................................10
Section 3. INDEMNIFICATION...............................................11
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES....................11
Section 5. SEAL..........................................................11
Section 6. SEVERABILITY..................................................11
Section 7. HEADINGS......................................................11
ARTICLE VII AMENDMENTS......................................................12
Section 1. AMENDMENTS....................................................12
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AMENDED AND RESTATED BYLAWS
OF
GLOBAL INVESTMENT PORTFOLIO,
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of Global
Investment Portfolio (the "Trust") shall be in the County of New Castle,
State of Delaware.
Section 2. OTHER OFFICES. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. NUMBER. The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. TERM. The Trustees shall hold office during the lifetime of the
Trust, except (a) that any Trustee may resign his trusteeship or may retire by
written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who has died, become physically or mentally incapacitated by reason of
disease or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
Holders of the Trust.
Section 3. VACANCY. In case of the declination to serve, death,
resignation, retirement or removal of a Trustee, or a Trustee is otherwise
unable to serve, or an increase in the number of Trustees, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
filled, the other Trustees shall have all the powers hereunder and the
certification of the other Trustees of such vacancy shall be conclusive. In the
case of an existing vacancy, the remaining Trustees may fill such vacancy by
appointing such other person as they in their discretion shall see fit, or may
leave such vacancy unfilled or may reduce the number of Trustees to not less
than two Trustees. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
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An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Amended
and Restated Bylaws, or elected pursuant to Section 3 of Article IV, and the
Agreement shall have accepted this appointment in writing and agreed in writing
to be bound by the terms of the Trust Agreement, the Trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder.
Section 4. DELEGATION OF POWER. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
Section 5. INABILITY TO SERVE FULL TERM. The declination to serve, death,
resignation, retirement, removal, incapacity, or inability of the Trustees, or
any one of them, shall not operate to terminate the Trust or to revoke any
existing agency created pursuant to the terms of the Agreement.
Section 6. POWERS. The Trustees shall have exclusive and absolute control
over the trust property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the trust property and business in their
own right, but with such powers of delegation as may be permitted by the
Agreement. The Trustees shall have power to conduct the business of the Trust
and carry on its operations in any and all of its branches and maintain offices
both within and without the State of Delaware, in any and all states of the
United States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of the United
States of America, and in any foreign jurisdiction and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of these Amended and Restated Bylaws and the
Agreement, the presumption shall be in favor of a grant of power to the
Trustees.
Section 7. MEETINGS OF THE TRUSTEES. The Trustees of the Trust may hold
meetings, both regular and special, either within or without the State of
Delaware.
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Section 8. REGULAR MEETINGS. Regular meetings of the Board of
Trustees shall be held each year, at such time and place as the Board of
Trustees may determine.
Section 9. NOTICE OF MEETINGS. Notice of the time, date, and place of all
meetings of the Trustees shall be given to each Trustee by telephone, facsimile,
electronic-mail, or other electronic mechanism sent to his or her home or
business address at least twenty-four hours in advance of the meeting or in
person at another meeting of the Trustees or by written notice mailed to his or
her home or business address at least seventy-two hours in advance of the
meeting.
Section 10. QUORUM. At all meetings of the Trustees, a majority of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Amended and Restated Bylaws. If a
quorum shall not be present at any meeting of the Board of Trustees, the
Trustees present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 11. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Agreement or these Amended and Restated Bylaws, any action required or permitted
to be taken at any meeting of the Board of Trustees or of any committee thereof
may be taken without a meeting by unanimous written consent of the Trustees or
committee members (or by written consent of a majority of the Trustees if the
President of the Trust determines that such exceptional circumstances exist, and
are of such urgency, as to make unanimous written consent impossible or
impractical, which determination shall be conclusive and binding on all Trustees
and not otherwise subject to challenge) and the writing or writings are filed
with the minutes of proceedings of the board or committee.
Section 12. DESIGNATION, POWERS, AND NAME OF COMMITTEES. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustee as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 13. MINUTES OF COMMITTEE. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
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Section 14. COMPENSATION OF TRUSTEES. The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer or
other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The initial executive officers of the Trust
shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Amended and Restated
Bylaws to be executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. Unless otherwise specifically determined by the
Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power to
the President with respect to any other officer. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees or the President. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 3. PRESIDENT. The President shall be the chief executive officer
of the Trust and, subject to the Board of Trustees, shall generally manage the
business and affairs of the Trust. If there is no Chairman of the Board, or if
the Chairman of the Board has been appointed but is absent, the President shall,
if present, preside at all meetings of the Holders and the Board of Trustees.
Section 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall
preside at all meetings of the Holders and the Board of Trustees, if the
Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
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Section 5. OTHER OFFICERS. The Chairman of the Board or one or more Vice
Presidents shall have and exercise such powers and duties of the President in
the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by the
President. In the absence or inability to act of the President, the powers and
duties of the President not otherwise assigned by the Board of Trustees or the
President shall devolve upon the Chairman of the Board, or in the Chairman's
absence, the Vice Presidents in the order of their election.
Section 6. SECRETARY. The Secretary shall (a) have custody of the seal of
the Trust; (b) attend meetings of the shareholders, the Board of Trustees, and
any committees of Trustees and keep the minutes of such meetings of Holders,
Board of Trustees and any committees thereof; and (c) issue all notices of the
Trust. The Secretary shall have charge of the Holder records and such other
books and papers as the Board may direct, and shall perform such other duties as
may be incidental to the office or which are assigned by the Board of Trustees.
The Secretary shall also keep or cause to be kept a Holder book, which may be
maintained by means of computer systems, containing the names, alphabetically
arranged, of all persons who are Holders, showing their places of residence, the
number and class or series of any class of shares of beneficial interest held by
them, respectively, and the dates when they became the record owners thereof,
and such book shall be open for inspection as prescribed by the laws of the
State of Delaware.
Section 7. TREASURER. The Treasurer shall have the care and custody of the
funds and securities of the Trust and shall deposit the same in the name of the
Trust in such bank or banks or other depositories, subject to withdrawal in such
manner as these Amended and Restated Bylaws or the Board of Trustees may
determine. The Treasurer shall, if required by the Board of Trustees, give such
bond for the faithful discharge of duties in such form as the Board of Trustees
may require.
Section 8. SURETY BOND. The Trustees may require any officer or agent of
the Trust to execute a bond (including, without limitation, any bond required by
the Investment Company Act of 1940, as amended ("1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
ARTICLE IV
MEETINGS OF HOLDERS
Section 1. PURPOSE. All meetings of the Holders for the election of
Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
Holders may be held for any purpose determined by the Trustees and may be held
at such time and place, within or without the State of Delaware as shall be
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stated in the notice of the meeting or in a duly executed waiver of notice
thereof. At all meetings of the shareholders, every shareholder of record
entitled to vote thereat shall be entitled to vote either in person or by proxy,
which term shall include proxies provided through written, electronic,
telephonic, computerized, facsimile, telecommunications, telex or oral
communication or by any other form of communication, each pursuant to such
voting procedures and through such systems as are authorized by the Trustees or
one or more executive officers of the Trust. Unless a proxy provides otherwise,
such proxy is not valid more than eleven months after its date. A proxy with
respect to shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Holder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.
Section 2. NOMINATIONS OF TRUSTEES. Nominations of individuals for
election to the board of trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any Holder of the Trust may submit names of individuals
to be considered by the Nominating Committee or the Board of Trustees, as
applicable, provided, however, (i) that such person was a Holder of record at
the time of submission of such names and is entitled to vote at the meeting, and
(ii) that the Nominating Committee or the Board of Trustees, as applicable,
shall make the final determination of persons to be nominated.
Section 3. ELECTION OF TRUSTEES. All meetings of Holders for the purpose
of electing Trustees shall be held on such date and at such time as shall be
designated from time to time by the Trustees and stated in the notice of the
meeting, at which the Holders shall elect by a plurality vote any number of
Trustees as the notice for such meeting shall state are to be elected, and
transact such other business as may properly be brought before the meeting in
accordance with Section 1 of this Article IV.
Section 4. NOTICE OF MEETINGS. Written notice of any meeting stating the
place, date, and hour of the meeting shall be given to each Holder entitled to
vote at such meeting not less than ten days before the date of the meeting in
accordance with Article V hereof.
Section 5. SPECIAL MEETINGS. Special meetings of the Holders, for any
purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the Holders solely for the purpose of removing
one or more Trustees, when requested in writing so to do by the record Holders
of not less than ten percent of the outstanding Interest in the Trust.
Section 6. NOTICE OF SPECIAL MEETING. Written notice of a special meeting
stating the place, date, and hour of the meeting and the purpose of purposes for
which the meeting is called, shall be given not less than ten days before the
date of the meeting, to each Holder entitled to vote at such meeting.
Section 7. CONDUCT OF SPECIAL MEETING. Business transacted at any
special meeting of Holders shall be limited to the purpose stated in the
notice.
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Section 8. QUORUM. The Holders of one-third of the Interests that are
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the Holders
for the transaction of business except as otherwise provided by applicable law
or by the Agreement. If, however, such quorum shall not be present or
represented at any meeting of the Holders, the vote of the Holders of a majority
of Interests cast shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting, at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 9. ORGANIZATION OF MEETINGS.
(a) The Chairman of the Board of Trustees shall preside at each meeting of
Holders. In the absence of the Chairman of the Board, the meeting shall be
chaired by the President, or if the President shall not be present, by a Vice
President. In the absence of all such officers, the meeting shall be chaired by
a person elected for such purpose at the meeting. The Secretary of the Trust, if
present, shall act as Secretary of such meetings, or if the Secretary is not
present, an Assistant Secretary of the Trust shall so act, and if no Assistant
Secretary is present, then a person designated by the Secretary of the Trust
shall so act, and if the Secretary has not designated a person, then the meeting
shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to make such rules
and regulations for the conduct of meetings of Holders as it shall deem
necessary, appropriate or convenient. Subject to such rules and regulations of
the Board of Trustees, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are necessary, appropriate or
convenient for the proper conduct of the meeting, including, without limitation,
establishing: an agenda or order of business for the meeting; rules and
procedures for maintaining order at the meeting and the safety of those present;
limitations on participation in such meeting to Holders of record of the Trust
and their duly authorized and constituted proxies, and such other persons as the
chairman shall permit; restrictions on entry to the meeting after the time fixed
for the commencement thereof; limitations on the time allotted to questions or
comments by participants; and regulation of the opening and closing of the polls
for balloting on matters which are to be voted on by ballot, unless and to the
extent the Board of Trustees or the chairman of the meeting determines that
meetings of Holders shall not be required to be held in accordance with the
rules of parliamentary procedure.
Section 10. VOTING STANDARD. When a quorum is present at any meeting, the
vote of the Holders of a majority of the Interests cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Amended and Restated
Bylaws, or applicable contract, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Section 11. VOTING PROCEDURE. Each Interest shall be entitled to vote in
proportion to its share in the Trust. On any matter submitted to a vote of the
Holders, the Interests shall be voted together, except when required by
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applicable law or when the Trustees have determined that the matter affects the
interests of one or more Portfolios (or Classes), then only the Holders of such
Portfolios (or Classes) shall be entitled to vote thereon.
Section 12. ACTION WITHOUT MEETING. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
Holders of the Trust, or any action which may be taken at any meeting of such
Holders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the Holders of outstanding Interests having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all Interests entitled to vote thereon were present and voted.
Prompt notice of the taking of any such action without a meeting by less than
unanimous written consent shall be given to those Holders who have not consented
in writing.
Section 13. FIXING RECORD DATE. In order that the Trustees may determine
the Holders entitled to notice of or to vote at any meeting of Holders or any
adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by Holder consent in writing without
a meeting, nor more than ninety days prior to any other action. A determination
of Holders of record entitled to notice of or to vote at a meeting of Holders
shall apply to any adjournment of the meeting; provided, however, that the Board
of Trustees may fix a new record date for the adjourned meeting.
ARTICLE V
NOTICES
Section 1. METHODS OF GIVING NOTICE. Whenever, under the provisions of
applicable law or of the Agreement or of these Amended and Restated Bylaws,
notice is required to be given to any Trustee or Holder, it shall not, unless
otherwise provided herein, be construed to mean personal notice, but such notice
may be given orally in person, or by telephone (promptly confirmed in writing)
or in writing, by mail addressed to such Trustee or Holder, at his address as it
appears on the records of the Trust, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be deposited
in the United States mail. Notice to Trustees or members of a committee may also
be given by telex, telegram, telecopier or via overnight courier. If sent by
telex or telecopier, notice to a Trustee or member of a committee shall be
deemed to be given upon transmittal; if sent by telegram, notice to a Trustee or
member of a committee shall be deemed to be given when the telegram, so
addressed, is delivered to the telegraph company, and if sent via overnight
courier, notice to a Trustee or member of a committee shall be deemed to be
given when delivered against a receipt therefor.
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Section 2. WRITTEN WAIVER. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Amended
and Restated Bylaws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. DIVIDENDS AND OTHER DISTRIBUTIONS. The Trustees may from time
to time declare and pay dividends and make other distributions with respect to
any Portfolio, or Class thereof, which may be from income, capital gains or
capital. The amount of such dividends or other distributions and the payment of
them and whether they are in cash or any other Trust Property shall be wholly in
the discretion of the Trustees.
Section 2. REDEMPTIONS. Any Holder of record of shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to redeem
his Interests, or any portion thereof, subject to the terms and conditions set
forth in the registration statement in effect from time to time. The redemption
price may in any case or cases be paid wholly or partly in kind if the Trustees
determine that such payment is advisable in the interest of the remaining
shareholders of the Portfolio or Class thereof for which the shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which the
Trust is formed.
Section 3. INDEMNIFICATION. Every person who is, or has been, a Trustee or
officer of the Trust shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Business Trust Act, these Amended and Restated Bylaws
and other applicable law.
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES.To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to indemnification for such expenses, and
further provided that (i) such Covered Person shall have provided appropriate
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security for such undertaking, (ii) the Trust is insured against losses arising
out of any such advance payments, or (iii) either a majority of the Trustees who
are not interested persons (as defined in the 1940 Act) of the Trust nor parties
to the matter, or independent legal counsel in a written opinion shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe that such Covered Person
will not be disqualified from indemnification for such expenses.
Section 5. SEAL. The business seal shall have inscribed thereon the name
of the business trust, the year of its organization and the word "Business Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. SEVERABILITY. The provisions of these Amended and Restated
Bylaws are severable. If the Board of Trustees determines, with the advice of
counsel, that any provision hereof conflicts with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code, or other applicable
laws and regulations, the conflicting provision shall be deemed never to have
constituted a part of these Amended and Restated Bylaws; provided, however, that
such determination shall not affect any of the remaining provisions of these
Amended and Restated Bylaws or render invalid or improper any action taken or
omitted prior to such determination. If any provision hereof shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of these Amended and Restated Bylaws.
Section 7. HEADINGS. Headings are placed in these Amended and Restated
Bylaws for convenience of reference only and in case of any conflict, the text
of these Amended and Restated Bylaws rather than the headings shall control.
ARTICLE VII
AMENDMENTS
Section 1. AMENDMENTS. These Amended and Restated Bylaws may be altered or
repealed at any regular or special meeting of the Board of Trustees without
prior notice. These Amended and Restated Bylaws may also be altered or repealed
at any special meeting of the Holders, but only if the Board of Trustees
resolves to put a proposed alteration or repealer to the vote of the Holders and
notice of such alteration or repealer is contained in a notice of the special
meeting being held for such purpose.
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AMENDMENT TO CUSTODIAN CONTRACT
-------------------------------
This Amendment to the Custodian Contract is made as of January 26, 1999 by
and between Global Investment Portfolio (the "Fund") and State Street Bank and
Trust Company (the "Custodian"). Capitalized terms used in this Amendment
without definition shall have the respective meanings ascribed to such terms in
the Custodian Contract referred to below.
WHEREAS, the Fund and the Custodian entered into a Custodian Contract
dated as of March 23, 1994 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets, and the Fund has made Global Consumer Products and Services
Portfolio, Global Financial Services Portfolio, Global Infrastructure Portfolio
and Global Natural Resources Portfolio subject to the Contract (each such
series, together with all other series subsequently established by the Fund and
made subject to the Contract in accordance with the terms thereof, shall be
referred to as a "Portfolio", and, collectively, the "Portfolios"); and
WHEREAS, the Fund and the Custodian desire to amend certain provisions of
the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund and the Custodian desire to amend and restate certain
other provisions of the Contract relating to the terms and conditions of the
custody of assets of each of the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing, and the mutual covenants
and agreements hereinafter contained, the parties hereby agree to amend the
Contract, pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through 25 of
the Contract are hereby amended, as of the effective date of this
Amendment. by renumbering same as Articles 5 through 26, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the effective
date of this Amendment, as set forth below.
3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
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3.1 DEFINITIONS.
------------
Capitalized terms in this Article 3 of the Contract shall have the following
meanings.
<PAGE>
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment; economic and financial infrastructure
(including any Mandatory Securities Depositories operating in the country);
prevailing or developing custody and settlement practices; laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held in custody in
that country; and factors comprising the "prevailing country risk", including
the effects of foreign law on the safekeeping of Portfolio assets, the
likelihood of expropriation, nationalization, freezing, or confiscation of a
Portfolio's assets and any reasonably foreseeable difficulties in repatriating a
Portfolio's assets.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act, except that the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States, currency
contracts that are settled outside the United States and such cash and cash
equivalents as are reasonably necessary to effect the Portfolio's transactions
in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund determines to place Foreign Assets in a country outside the United States
(i) because required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with prevailing or
developing custodial or market practices.
3.2. DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
-------------------------------------------------------
The Fund, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Article 3 with respect to Foreign Assets held
outside the United States, and the Custodian hereby accepts such delegation, as
Foreign Custody Manager of each Portfolio.
3.3. COUNTRIES COVERED.
------------------
The Foreign Custody Manager shall be responsible for performing the delegated
responsibilities defined below only with respect to (a) the countries listed on
Schedule A hereto as approved by the Board, which list of Board-approved
countries may be amended from time to time by the Fund with the agreement of the
Foreign Custody Manager, and (b) the custody arrangements set forth on such
Schedule A. The Foreign Custody Manager shall list on Schedule A the Eligible
<PAGE>
Foreign Custodians selected by the Foreign Custody Manager to maintain the
assets of each Portfolio, which list of Eligible Foreign Custodians may be
amended from time to time in the sole discretion of the Foreign Custody Manager.
Mandatory Securities Depositories are listed on Schedule B to this Contract,
which Schedule B may be amended from time to time by the Foreign Custody
Manager. The Foreign Custody Manager will provide amended versions of Schedules
A and B in accordance with Section 3.7 of this Article 3.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account, or to place or maintain Foreign Assets, in a country listed on
Schedule A, and the fulfillment by the Fund of the account opening requirements
for such country (if any), the Foreign Custody Manager shall be deemed to have
been appointed by the Board as Foreign Custody Manager with respect to that
country and to have accepted the delegation. Execution of this Amendment by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each Board- approved country listed on Schedule A
in which the Custodian has previously placed or currently maintains Foreign
Assets pursuant to the terms of the Contract. Following the receipt of Proper
Instructions directing the Foreign Custody Manager to close the account of a
Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board to the Custodian as
Foreign Custody Manager for that country shall be deemed to have been withdrawn
and the Custodian shall immediately cease to be the Foreign Custody Manager of
the Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to a Portfolio with respect
to the country as to which the Custodian s acceptance of delegation is
withdrawn.
3.4 SCOPE OF DELEGATED RESPONSIBILITIES.
------------------------------------
3.4.1. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS.
-----------------------------------------
Subject to the provisions of this Article 3, the Foreign Custody Manager may
place and maintain the Foreign Assets in the care of the Eligible Foreign
Custodians selected by the Foreign Custody Manager in each country listed as
"approved" on Schedule A, as such Schedule is amended from time to time.
In performing its delegated responsibilities as Foreign Custody Manager to place
or maintain the Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation, the factors specified in Rule 17f-5(c)(1).
3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS.
-------------------------------------------
<PAGE>
The Foreign Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign Custodian
that is a foreign securities depository or clearing agency) governing the
foreign custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
3.4.3. MONITORING.
-----------
In each case in which the Foreign Custody Manager maintains Foreign Assets with
an Eligible Foreign Custodian, selected by the Foreign Custody Manager, the
Foreign Custody Manager shall maintain a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian, and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules
or established practices and procedures in the case of an Eligible Foreign
Custodian selected by the Foreign Custody Manager which is a foreign securities
depository or clearing agency that is not a Mandatory Securities Depository).
The Foreign Custody Manager shall provide the Board with information at least
annually as to the factors used in such monitoring system. In the event the
Foreign Custody Manager determines that the custody arrangements with an
Eligible Foreign Custodian that it has selected are no longer appropriate, the
Foreign Custody Manager shall promptly transfer the Fund's Foreign Assets to
another Eligible Foreign Custodian in the market and shall notify the Board in
accordance with Section 3.7 hereunder.
3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY.
---------------------------------------------------
For purposes of this Article 3, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of a Portfolio, and the Board shall be deemed to be monitoring
on a continuing basis such Country Risk to the extent that the Board considers
necessary or appropriate.
Notwithstanding any provision of this Contract to the contrary, the Fund on
behalf of the Portfolios and the Custodian expressly acknowledge and agree that
the Foreign Custody Manager shall not be delegated any responsibilities under
this Article 3 with respect to Mandatory Securities Depositories, and that the
determination by or on behalf of the Board to place the Foreign Assets in a
particular country shall be deemed to include the determination to place such
Foreign Assets eligible for any Mandatory Securities Depository with such
Mandatory Securities Depository, whether the Mandatory Securities Depository
exists at the time the Foreign Assets are acquired, or after the acquisition
thereof.
3.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO.
-----------------------------------------------------------
In performing the responsibilities delegated to it, the Foreign Custody Manager
shall exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of assets of management investment companies
registered under the 1940 Act would exercise.
<PAGE>
3.7. REPORTING REQUIREMENTS.
-----------------------
The Foreign Custody Manager shall report at least quarterly on the Foreign
Assets held with each Eligible Foreign Custodian and in connection therewith if
applicable, provide to the Board amended Schedules A or B at the end of the
calendar quarter in which an amendment to either Schedule has occurred. The
Foreign Custody Manager will make written reports notifying the Board of any
other material change in the foreign custody arrangements of the Portfolios
described in this Article 3 promptly after the occurrence of the material
change.
3.8. REPRESENTATIONS WITH RESPECT TO RULE 17F-5.
-------------------------------------------
The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as
defined in section (a)(7) of Rule 17f-5.
The Fund represents to the Custodian that the Board has determined that it is
reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Contract to the Custodian as the
Foreign Custody Manager of each Portfolio.
3.9. EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY
MANAGER.
------------------------------------------------------------------
The Board's delegation to the Custodian as Foreign Custody Manager of a
Portfolio shall be effective as of the date hereof and shall remain in effect
until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective thirty days after receipt by the non-terminating party of such notice.
The provisions of Section 3.3 hereof shall govern the delegation to and
termination of the Custodian as Foreign Custody Manager of the Fund with respect
to designated countries.
3.10 FUTURE NEGOTIATIONS.
--------------------
If at any time prior to termination of this Amendment the Custodian as a matter
of standard business practice, accepts delegation as Foreign Custody Manager for
its U.S. mutual fund clients on terms materially different than set forth in
this Amendment, the Custodian hereby agrees to negotiate with the fund in good
faith with respect thereto.
4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD
OUTSIDE THE UNITED STATES.
4.1 DEFINITIONS.
------------
Terms used in this Article 4 and not defined below shall have the meanings
ascribed them in the Contract or in this Amendment:
<PAGE>
"Foreign Securities System" means either a clearing agency or a securities
depository which is listed on Schedule A hereto or a Mandatory Securities
Depository.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2. HOLDING SECURITIES.
-------------------
The Custodian shall identify on its books as belonging to the Portfolios the
foreign securities held by each Foreign Sub-Custodian or Foreign Securities
System. The Custodian may hold foreign securities for all of its customers,
including the Portfolios, with any Foreign Sub-Custodian in an account that is
identified as belonging to the Custodian for the benefit of its customers,
PROVIDED HOWEVER, that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii), to the extent permitted and customary in the market in
which the account is maintained, the Custodian shall require that securities so
held by the Foreign Sub-Custodian be held separately from any assets of such
Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.
4.3. FOREIGN SECURITIES SYSTEMS.
---------------------------
Foreign securities shall be maintained in a Foreign Securities System in a
designated country only through arrangements implemented by the Foreign
Sub-Custodian in such country pursuant to the terms of this Contract.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
----------------------------------------
4.4.1. DELIVERY OF FOREIGN ASSETS.
---------------------------
The Custodian or a Foreign Sub-Custodian shall release and deliver foreign
securities of a Portfolio held by such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
(i) upon sale of such foreign securities for the Portfolio in
accordance with reasonable market practice in the country where
such Foreign Assets are held or traded, including, without
limitation: (A) delivery against expectation of receiving later
payment; or (B), in the case of a sale effected through a Foreign
Securities System, in accordance with the rules governing the
operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other similar
offers for foreign securities of the Portfolio;
<PAGE>
(iv) to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name of
the Custodian (or the name of the respective Foreign Sub-Custodian
or of any nominee of the Custodian (or such Foreign Sub-Custodian))
or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units;
(vi) to brokers, clearing banks or other clearing agents for examination
or trade execution in accordance with reasonable market practices
in the country where such securities are held or traded; provided
that in any such case the Sub- Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Sub-Custodian's own negligence or
willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by the
Fund requiring a pledge of assets by the Portfolio;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other proper corporate purpose, but only upon receipt of,
in addition to Proper Instructions, a copy of a resolution of the
Board or of an Executive Committee of the Board so authorized by
the Board, signed by an officer of the Fund and certified by its
Secretary or an Assistant Secretary that the resolution was duly
adopted and is in full force and effect (a "Certified Resolution"),
specifying the Foreign Assets to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or
persons to whom delivery of such Foreign Assets shall be made.
<PAGE>
4.4.2. PAYMENT OF PORTFOLIO MONIES.
----------------------------
Upon receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out, or direct the
respective Foreign Sub-Custodian or the respective Foreign Securities System to
pay out, moneys of a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio, unless
otherwise directed by Proper Instructions, in accordance with
reasonable market settlement practice in the country where such
foreign securities are held or traded, including, without
limitation: (A) delivering money to the seller thereof or to a
dealer therefor (or an agent for such seller or dealer) against
expectation of receiving later delivery of such foreign securities;
or (B) in the case of a purchase effected through a Foreign
Securities System, in accordance with the rules governing the
operation of such Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of foreign
securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees under
this Contract, legal fees, accounting fees, and other operating
expenses;
(iv) for the purchase or sale of foreign exchange or foreign exchange
contracts for the Portfolio, including transactions executed with
or through the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign securities;
and
(viii) for any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions, a Certified Resolution specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such payment is
to be made.
4.4.3. MARKET CONDITIONS MARKET INFORMATION.
-------------------------------------
Notwithstanding any provision of this Contract to the contrary, settlement and
payment for Foreign Assets received for the account of a Portfolio and delivery
of Foreign Assets maintained for the account of a Portfolio may be effected in
accordance with the customary established securities trading or processing
practices and procedures in the country or market in which the transaction
<PAGE>
occurs generally accepted by Institutional Clients, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer. For purposes of this Contract, "Institutional Clients"
means U.S. registered investment companies or major U.S. based commercial banks,
insurance companies, pension funds or substantially similar institutions which,
as a part of their ordinary business operations, purchase or sell securities and
make use of global custody services.
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder and,
provided further, that the Custodian shall in any event provide to the Board and
to A I M Advisors, Inc. annually the following information and opinions with
respect to the Board-approved countries listed on Schedule A:
(i) legal opinions relating to whether local law restricts with respect
to U.S. registered mutual funds (a) access of a fund's independent
public accountants to books and records of a Foreign Sub-Custodian
or Foreign Securities System, (b) a fund's ability to recover in
the event of bankruptcy or insolvency of a Foreign Sub-Custodian or
Foreign Securities System, (c) a fund's ability to recover in the
event of a loss by a Foreign Sub-Custodian or Foreign Securities
System, and (d) the ability of a foreign investor to convert cash
and cash equivalents to U.S. dollars;
(ii) summary of information regarding Foreign Securities Systems; and
(iii) country profile information containing market practice for (a)
delivery versus payment, (b) settlement method, (c) currency
restrictions, (d) buy-in practices, (e) foreign ownership limits,
and (f) unique market arrangements.
4.5. REGISTRATION OF FOREIGN SECURITIES.
-----------------------------------
The foreign securities maintained in the custody of a Foreign Custodian (other
than bearer securities) shall be registered in the name of the Fund (on behalf
of the applicable Portfolio) or in the name of the Custodian or in the name of
any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and
the Fund agrees to hold any such nominee harmless from any liability as a holder
of record of such foreign securities, except to the extent that the Fund incurs
loss or damage due to failure of such nominee to meet its standard of care as
set forth in the Contract. The Custodian or a Foreign Sub-Custodian shall not be
obligated to accept securities on behalf of the Fund (on behalf of the
applicable Portfolio) under the terms of this Contract unless the form of such
securities and the manner in which they are delivered are in accordance with
reasonable market practice.
<PAGE>
4.6. BANK ACCOUNTS.
--------------
The Custodian shall identify on its books as belonging to a Portfolio cash
(including cash denominated in foreign currencies) deposited with the Custodian.
Where the Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the Custodian, a bank
account or bank accounts opened and maintained outside the United States on
behalf of a Portfolio with a Foreign Sub-Custodian shall be subject only to
draft or order by the Custodian or such Foreign Sub-Custodian, acting pursuant
to the terms of this Contract to hold cash received by or from or for the
account of the Portfolio.
4.7. COLLECTION OF INCOME.
---------------------
The Custodian shall use reasonable commercial efforts to collect all dividends,
income and other payments with respect to the Foreign Assets held hereunder to
which a Portfolio shall be entitled and shall credit such income, as collected,
to the Portfolio. In the event the Custodian or a Foreign Sub-Custodian must use
measures beyond those which are customary in a particular country to collect
such payments, the Fund and the Custodian shall consult as to such measures and
as to the compensation and expenses of the Custodian attendant thereto.
4.8. SHAREHOLDER RIGHTS.
-------------------
With respect to the foreign securities held under this Article 4, the Custodian
will use commercially reasonable efforts to facilitate the exercise by the Fund
on behalf of the Portfolios of voting and other shareholder rights, subject
always to the laws, regulation and practical constraints that may obtain in the
country where such securities are issued. The Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of the Fund to exercise shareholder rights.
4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES.
----------------------------------------------
The Custodian shall transmit promptly to the Fund written information
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of a Portfolio. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund written information so
received by the Custodian from issuers of the foreign securities whose tender or
exchange is sought or from the party (or its agents) making the tender or
exchange offer. Subject to the standard of care to which the Custodian is held
under this Contract, the Custodian shall not be liable for any untimely exercise
of any tender, exchange or other right or power in connection with foreign
securities or other property of the Portfolio at any time held by it unless (i)
the Custodian or the respective Foreign Sub-Custodian is in actual possession of
such foreign securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both
<PAGE>
(i) and (ii) occur at least two New York business days prior to the date on
which the Custodian is to take action to exercise such right or power.
4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES SYSTEMS.
-------------------------------------------------------------------
Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian
shall, to the extent possible consistent with prevailing market practice,
require the Foreign Sub-Custodian to exercise reasonable care in the performance
of its duties and to indemnify, and hold harmless, the Custodian from and
against any loss, damage, cost, expense, liability or claim arising out of or in
connection with such Foreign Sub-Custodian's performance of such obligations. At
the election of the Fund, the Fund shall be entitled to be subrogated to the
rights of the Custodian with respect to any claims against a Foreign
Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund and any applicable
Portfolio has not been made whole for any such loss, damage, cost, expense,
liability or claim.
4.11. TAX LAW.
--------
The Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Fund or the Custodian as custodian of the Portfolios
by the tax law of the United States or of any state or political subdivision
thereof. With respect to jurisdictions other than the United States, the sole
responsibility of the Custodian with regard to the tax law of any such
jurisdiction shall be to use reasonable efforts to (a) notify the Fund of the
obligations imposed on the Fund with respect to the Portfolios or the Custodian
as custodian of such Portfolios by the tax law of such jurisdictions, including
responsibility for withholding and other taxes, assessment or other governmental
charges, certifications and government reporting and (b) perform such
ministerial steps as are required to collect any tax refund, to ascertain the
appropriate rate of tax withholding and to provide such documents as may be
required to enable each
Fund to receive appropriate tax treatment under applicable tax laws and any
applicable treaty provisions. The Custodian, in performance of its duties under
this Section, shall be entitled to treat each Fund as a Delaware business trust
which is "registered investment company" under the laws of the United States,
and it shall be the duty of each Fund to inform the Custodian of any change in
the organization, domicile or, to the extent within the knowledge of the Fund,
other relevant facts concerning tax treatment of the Fund and further to inform
the Custodian if the Fund is or becomes the beneficiary of any special ruling or
treatment not applicable to the general nationality and category of entity of
which the Fund is a part under general laws and treaty provisions. The Custodian
shall be entitled to rely on any information supplied by the Fund. The Custodian
may engage reasonable professional advisors disclosed to the Fund by the
Custodian, which may include attorneys, accountants or financial institutions in
the regular business of investment administration and may rely upon advice
received therefrom.
4.12 LIABILITY OF CUSTODIAN.
-----------------------
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be
without liability to the Fund for any loss, liability, claim or expense
<PAGE>
resulting from or caused by Country Risk (as such term is defined in Article 3
hereof), regardless of whether assets are maintained in the custody of a Foreign
Sub-Custodian or a Foreign Securities Depository, the Custodian shall be without
liability for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism, or any other similar loss beyond the reasonable control of the
Custodian or the Sub-Custodian.
The Custodian shall be liable to the Fund on account of any actions or omissions
of any Foreign Sub-Custodian to the same extent as such Foreign Sub-Custodian
shall be liable to the Custodian.
4.13 USE OF TERM "FUND" ASSETS AND LIABILITIES.
------------------------------------------
All references in this Article 4 or in Article 3 of this Agreement to "Fund"
shall mean the Fund, or a Portfolio of the Fund, as the context requires or as
applicable.
The Custodian shall maintain separate and distinct records for each Portfolio
and the assets allocated solely with such Portfolio shall be held and accounted
for separately from the assets of the Fund associated solely with any other
Portfolio. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of the Fund generally or the assets of any other Portfolio.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and effect.
In the event of any conflict between the terms of the Contract prior to this
Amendment and this Amendment, the terms of this Amendment shall prevail. If the
Custodian is delegated the responsibilities of Foreign Custody Manager pursuant
to the terms of Article 3 hereof, in the event of any conflict between the
provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall
prevail.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.
WITNESSED BY: STATE STREET BANK AND TRUST
COMPANY
/s/ Marc L. Parsons
- -------------------
Marc L. Parsons By: /s/ Ronald E. Logue
Associate Counsel ----------------------------
Name:Ronald E. Logue
Title: Executive Vice President
WITNESSED BY: GLOBAL INVESTMENT PORTFOLIO
/s/ Samuel D. Sirko
- -------------------
Name:Samuel D. Sirko By: /s/ Carol F. Relihan
Title:Assistant Secretary --------------------
Name: Carol F. Relihan
Title: Vice President
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Oesterreichischen
Sparkassen AG
Bahrain British Bank of the Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Generale de Banque
Bermuda The Bank of Bermuda Limited
Bolivia Banco Boliviano Americano S.A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank. N.A.
Bulgaria ING Bank N.V.
Canada Canada Trustco Mortgage Company
Chile Citibank, N.A. Deposito Central de
Valores S.A.
People's Republic The Hongkong and Shanghai
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A.
Sociedad Fiduciaria
12/31/98
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUB CUSTODIAN NON-MANDATORY DEPOSITORIES
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus Barclays Bank Plc.
Cyprus Offshore Banking Unit
Czech Republic Ceskoslovenska Obchodni
Banka, A.S.
Denmark Den Danske Bank Ecuador Citibank, N.A.
Egypt National Bank of Egypt Estonia Hansabank
Finland Merita Bank Limited France Banque Paribas
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A. The Bank of Greece,
System for Monitoring
Transactions in Securities
in Book-Entry Form
Hong Kong Standard Chartered Bank
Hungary Citibank Budapest Rt.
12/31/98 2
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Iceland Icebank Ltd.
India Deutsche Bank AG
The Hongkong and Shanghai
Banking Corporation Limited
Indonesia Standard Chartered Bank Ireland Bank of Ireland
Israel Bank Hapoalim B.M. Italy Banque Paribas
Ivory Coast Societe Generale de Banques
en Cote d'lvoire
Jamaica Scotiabank Jamaica Trust and Merchant
Bank Ltd.
Japan The Daiwa Bank, Limited Japan Securities
Depositorv Center
The Fuji Bank, Limited
Jordan British Bank of the Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea The Hongkong and Shanghai Banking
Corporation Limited
Latvia JSC Hansabank-Latvija
12/31/98 3
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Lebanon British Bank of the Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation
Limited)
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank
Malaysia Berhad
Mauritius The Hongkong and Shanghai
Banking Corporation Limited
Mexico Citibank Mexico, S.A.
Morocco Banque Commerciale du Maroc
Namibia (via) Standard Bank of South Africa
The Netherlands MeesPierson N.V.
New Zealand ANZ Banking Group
(New Zealand) Limited
Norway Christiania Bank og
Kreditkasse
Oman British Bank of the Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG
Peru Citibank, N.A.
Philippines Standard Chartered Bank
12/31/98 4
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Poland Citibank (Poland) S.A.
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues
Romania ING Bank N.V.
Russia Credit Suisse First Boston AO, Moscow
as delegate of Credit Suisse
First Boston, Zurich)
Singapore Be Development Bank of Singapore Limited
Slovak Republic Ceskoslovenska Obchodna
Banka, A.S.
Slovenia Bank Austria d.d. Ljubljana
South Africa Standard Bank of South Africa Limited
Spain Banco Santander, S.A.
Sri Lanka The Hongkong and Shanghai
Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
12/31/98 5
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Ottoman Bank
Ukraine ING Bank, Ukraine
United Kingdom State Street Bank and Trust Company,
London Branch
Uruguay Citibank, N.A.
Venezuela Citibank, N.A.
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
12/31/98 6
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and
Transfer System
Austria Oesterreichische Kontrolibank AG
(Wertpapiersammelbank Division)
Belgium Caisse lnterprofessionnelle de
Depot et de Virement de Titres
S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e
Custodia (CBLC)
Bolsa de Valores de Rio de Janeiro
All SSB clients presently use CBLC
Central de Custodia e de Liquidaco
Financeira de Titulos
Bulgaria Central Depository AD
Bulgarian National Bank
Canada The Canadian Depository
for Securities Limited
People's Republic Shanghai Securities Central Clearing and
of China Registration Corporation
Shenzhen Securities Central Clearing
Co., Ltd.
Costa Rica Central de Valores S.A. (CEVAL)
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 1
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Czech Republic Stredisko cennych papir
Czech National Bank
Denmark Vaerdipapircentralen (the Danish
Securities Center)
Egypt Misr Company for Clearing, Settlement,
and Central Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland The Finish Central Securities
Depository
France Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany Deutsche Borse Clearing AG
Greece The Central Securities Depository
(Apothetirion Titlon AE)
Hong Kong The Central Clearing and
Settlement System
Central Money Markets Unit
Hungary The Central Depository and Clearing
House (Budapest) Ltd. (KELER)
[MANDATORY FOR GOVT BONDS ONLY,-
SSB DOES NOT USEFOR OTHER SECURITIES]
India The National Securities Depository
Limited
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 2
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Indonesia Bank Indonesia
Ireland Central Bank of Ireland
Securities Settlement Office
Israel The Tel Aviv Stock Exchange Clearing
House Ltd.
Bank of Israel
Italy Monte Titoli S.p.A.
Banca d'Italia
Ivory Coast Depositaire Central -Banque de Reglement
Jamaica The Jamaican Central Securities
Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia The Latvian Central Depository
Lebanon The Custodian and Clearing Center of
Financial Instruments for Lebanon
and the Middle East (MIDCLEAR) S.A.L.
The Central Bank of Lebanon
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 3
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Lithuania The Central Securities Depository of
Lithuania
Malaysia The Malaysian Central Depository Sdn.
Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and
Safekeeping System
Mauritius The Central Depository & Settlement Co.
Ltd.
Mexico S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de Valores)
Morocco Maroclear
The Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
De Nederlandsche Bank N.V.
New Zealand New Zealand Central Securities
Depository Limited
Norway Verdipapirsentralen (the Norwegian
Registry of Securities)
Oman Muscat Securities Market
Pakistan Central Depository Company of Pakistan
Limited
Peru Caja de Valores y Liquidaciones S.A.
(CAVALI)
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 4
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Philippines The Philippines Central Depository, Inc.
The Registry of Scripless Securities
ROSS) of the Bureau of the Treasury
Poland The National Depository of Securities
(Krajowy Depozyt Papierow Wartoiowych)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios (Central)
Romania National Securities Clearing, Settlement
and Depository Co.
Bucharest Stock Exchange Registry
Division
Singapore The Central Depository (Pte)
Limited
Monetary Authority of Singapore
Slovak Republic Stredisko Cennych Papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana,
Central de Anotaciones en Cuenta
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 5
<PAGE>
SCHEDULE B
STATESTREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Sri Lanka Central Depository System
(Pvt) Limited
Sweden Vardepapperscentralen AB
(the Swedish Central Securities
Depository)
Switzerland Schweizerische Effekten - Giro AG
Taiwan - R.O.C. The Taiwan Securities Central
Depository Co., Ltd.
Thailand Thailand Securities Depository
Company Limited
Tunisia Societe Tunisienne Interprofessionelle
de Compensation et de Depot de
Valeurs Mobilieres
Central Bank of Tunisia
Tunisian Treasury
Turkey Takas ve Sakiama Bankasi A.S.
(TAKASBANK)
Central Bank of Turkey
Ukraine The National Bank of Ukraine
United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office
Uruguay Central Bank of Uruguay
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 6
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Venezuela Central Bank of Venezuela
Zambia Lusaka Central Depository Limited
Bank of Zambia
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98 7
<PAGE>
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
- ------------------------------- -----------------
(FREQUENCY)
THE GUIDE TO CUSTODY IN WORLD An overview of safekeeping and settlement
MARKETS (annually) practices and procedures in each market in
which State Street Bank and Trust Company
offers custodial services.
GLOBAL CUSTODY NETWORK REVIEW Information relating to the operating history
(annually) and structure of depositories and
subcustodians located in the markets in
which State Street Bank and Trust Company
offers custodial services, including
transnational depositories.
GLOBAL LEGAL SURVEY With respect to each market in which State
(annually) Street Bank and Trust Company offers
custodial services, opinions relating to
whether local law restricts (i) access of a
fund's independent public accountants to
books and records of a Foreign Sub- Custodian
or Foreign Securities System, (ii) the Fund's
ability to recover in the event of bankruptcy
or insolvency of a Foreign Sub-Custodian or
Foreign Securities System, (iii) the Fund's
ability to recover in the event of a loss by
a Foreign Sub-Custodian or Foreign Securities
System, and (iv) the ability of a foreign
investor to convert cash and cash equivalents
to U.S. dollars.
SUBCUSTODIAN AGREEMENTS Copies of the subcustodian contracts State
(annually) Street Bank and Trust Company has entered
into with each subcustodian in the markets
in which State Street Bank and Trust Company
offers subcustody services to its US mutual
fund clients.
Network Bulletins (weekly): Developments of interest to investors in the
markets in which State Street Bank and Trust
Company offers custodial services.
Foreign Custody Advisories (as
necessary): With respect to markets in which State Street
Bank and Trust Company offers custodial
services which exhibit special custody risks,
developments which may impact State Street's
ability to deliver expected levels of
service.
Consent of Independent Accountants
To the Trustees of Global Investment Portfolio:
RE: Global Investment Portfolio:
Global Financial Services Portfolio
Global Infrastructure Portfolio
Global Resources Portfolio
Global Consumer Products and Services Portfolio
(the "Portfolio")
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund
(the "Funds")
We consent to the inclusion in Amendment No. 7 to the Registration Statement on
Form N-1A, under the Investment Company Act of 1940, as amended, of Global
Investment Portfolio (the "Portfolio"), of our reports dated December 18, 1998,
on our audits of the financial statements and financial highlights of the Funds,
which reports are included in the Annual Report to Shareholders for the periods
stated therein, which are also included in this Registration Statement. We also
consent to the reference to our Firm under the caption "Financial Statements" in
the statement of additional information.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 25, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS LEGEND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 04
<NAME> AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 151039
<INVESTMENTS-AT-VALUE> 170347
<RECEIVABLES> 1714
<ASSETS-OTHER> 2755
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 174816
<PAYABLE-FOR-SECURITIES> 8091
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 112
<TOTAL-LIABILITIES> 8203
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 115812
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1784
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 29692
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19326
<NET-ASSETS> 166613
<DIVIDEND-INCOME> 1264
<INTEREST-INCOME> 728
<OTHER-INCOME> 61
<EXPENSES-NET> 1350
<NET-INVESTMENT-INCOME> 703
<REALIZED-GAINS-CURRENT> 4655
<APPREC-INCREASE-CURRENT> 10773
<NET-CHANGE-FROM-OPS> 16131
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3997
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1329
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1390
<AVERAGE-NET-ASSETS> 181348
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS LEGEND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 01
<NAME> AIM GLOBAL FINANCIAL SERVICES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 78082
<INVESTMENTS-AT-VALUE> 87674
<RECEIVABLES> 4264
<ASSETS-OTHER> 5
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 91943
<PAYABLE-FOR-SECURITIES> 4777
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 355
<TOTAL-LIABILITIES> 5132
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 71419
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2868
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3219
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9306
<NET-ASSETS> 86812
<DIVIDEND-INCOME> 2002
<INTEREST-INCOME> 273
<OTHER-INCOME> 74
<EXPENSES-NET> 753
<NET-INVESTMENT-INCOME> 1596
<REALIZED-GAINS-CURRENT> (703)
<APPREC-INCREASE-CURRENT> 1399
<NET-CHANGE-FROM-OPS> 2292
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 6565
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 726
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 768
<AVERAGE-NET-ASSETS> 98475
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS LEGEND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 02
<NAME> AIM GLOBAL INFRASTRUCTURE PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 50132
<INVESTMENTS-AT-VALUE> 60987
<RECEIVABLES> 2975
<ASSETS-OTHER> 1222
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 65184
<PAYABLE-FOR-SECURITIES> 1354
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 464
<TOTAL-LIABILITIES> 1818
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37106
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4949
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10835
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10476
<NET-ASSETS> 63366
<DIVIDEND-INCOME> 1666
<INTEREST-INCOME> 396
<OTHER-INCOME> 46
<EXPENSES-NET> 654
<NET-INVESTMENT-INCOME> 1454
<REALIZED-GAINS-CURRENT> 4856
<APPREC-INCREASE-CURRENT> (8254)
<NET-CHANGE-FROM-OPS> (1944)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (35209)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 612
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 662
<AVERAGE-NET-ASSETS> 83956
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS LEGEND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
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<SERIES>
<NUMBER> 03
<NAME> AIM GLOBAL RESOURCES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 57535
<INVESTMENTS-AT-VALUE> 52609
<RECEIVABLES> 341
<ASSETS-OTHER> 777
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53727
<PAYABLE-FOR-SECURITIES> 950
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 247
<TOTAL-LIABILITIES> 1197
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66043
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 957
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9543)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4926)
<NET-ASSETS> 52530
<DIVIDEND-INCOME> 849
<INTEREST-INCOME> 271
<OTHER-INCOME> 29
<EXPENSES-NET> 714
<NET-INVESTMENT-INCOME> 435
<REALIZED-GAINS-CURRENT> (21879)
<APPREC-INCREASE-CURRENT> (39192)
<NET-CHANGE-FROM-OPS> (60636)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (118501)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 679
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 759
<AVERAGE-NET-ASSETS> 94813
<PER-SHARE-NAV-BEGIN> 1.00
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.00
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</TABLE>
