As filed with the Securities and Exchange Commission on October 12, 2001
1933 Act Registration No. 33-19338
1940 Act Registration No. 811-05426
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No.
----- ---
Post-Effective Amendment No. 60 X
----- ---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. 61 X
-- ---
(Check appropriate box or boxes.)
|
Copy to:
Renee A. Friedli, Esq. Martha J. Hays, Esq. A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP 11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor Houston, Texas 77046 Philadelphia, Pennsylvania 19103-7599 |
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Amendment
It is proposed that this filing will become effective (check appropriate box):
If appropriate, check the following box:
This post-effective amendment designates a new effective date for
--- a previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION -- DATED OCTOBER 12, 2001
AIM GLOBAL BIOTECH FUND
AIM Global Biotech Fund seeks to provide long-term growth of capital.
PROSPECTUS
DECEMBER 31, 2001
This prospectus contains important
information about the Class A, B and
C shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells
you otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
-----------------------
|
INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet this objective by investing, normally, at least 80% of its net assets in equity securities of domestic and foreign companies in the biotechnology industry. The fund considers a company to be in the biotechnology industry if (1) at least 50% of its gross income or its net sales are derived from activities in the biotechnology industry; (2) at least 50% of its assets are devoted to producing revenues from the biotechnology industry; (3) based on other available information, the portfolio managers determine that its primary business is within the biotechnology industry; or (4) the portfolio managers believe it will benefit from developments in the biotechnology industry. Such companies include those that research, develop, manufacture, or sell biotechnological products, services and processes (such as companies involved with genomics, genetic engineering, and gene therapy and companies involved in the application and development of biotechnology in areas such as health care, specialty pharmaceuticals, medical devices and tools, biochemistry, and agriculture). Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The securities may include common stocks, convertible bonds, convertible preferred stocks and warrants.
While the fund will invest without regard to market capitalization, the fund expects to invest a significant portion of its assets in securities of small- and mid-cap companies in addition to investments in large-cap companies. Under normal conditions, the top 10 holdings may comprise up to one third of the fund's total assets.
The fund will normally invest in the securities of companies located in at least three different countries, including the United States, and may invest a significant portion of its assets in the securities of U.S. issuers. However, the fund will invest no more than 25% of its total assets in the securities of issuers in any one country, other than the U.S.
The portfolio managers allocate the fund's assets among securities of countries and in currency denominations that are expected to provide the best opportunities for meeting the fund's investment objective. In analyzing specific companies for possible investment, the portfolio managers ordinarily look for several of the following characteristics: above-average per share earnings growth; high return on invested capital; a healthy balance sheet; sound financial and accounting policies and overall financial strength; strong competitive advantages; effective research and product development and marketing; development of new technologies; efficient service; pricing flexibility; strong management; and general operating or other characteristics that will enable the companies to compete successfully in their respective markets. The portfolio managers consider whether to sell a particular security when any of those factors materially changes.
The fund is non-diversified. With respect to 50% of its assets, it is permitted to invest more than 5% of its assets in the securities of any one issuer.
In anticipation of or in response to adverse market conditions, for cash management purposes or for defensive purposes, the fund may temporarily hold all or a portion of its assets in cash, money market instruments, shares of affiliated money market funds or bonds or other debt securities. As a result, the fund may not achieve its investment objective.
The fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. If the fund does trade in this way, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on your investment. Active trading may also increase short-term capital gains and losses, which may affect the taxes you have to pay.
There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions, and market liquidity. This is especially true with respect to equity securities of small- and medium-sized companies, whose prices may go up and down more than the prices of equity securities of larger, more established companies. Also, since equity securities of small- and medium-sized companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desired price.
Because the fund focuses its investments in the biotechnology industry, the value of your fund shares may rise and fall more than the value of shares of a fund that invests more broadly.
Because a large percentage of the fund's assets may be invested in a limited number of securities, a change in the value of these securities could significantly affect the value of your investment in the fund.
The value of the fund's shares is particularly vulnerable to factors affecting the biotechnology industry, such as substantial government regulation. Government regulation may impact the demand for products and services offered by biotechnology companies. Also, the products and services offered by biotechnology companies may be subject to rapid obsolescence caused by scientific advances and rapidly changing technology. In addition, biotechnology companies could be hurt by intense
competition, patent considerations and rapid technological change. Many biotechnology companies are smaller companies that may have limited product lines and financial and managerial resources, making them vulnerable to isolated business setbacks.
The values of the convertible securities in which the fund may invest also will be affected by market interest rates, the risk that the issuer may default on interest or principal payments and the value of the underlying common stock into which these securities may be converted. Specifically, since these types of convertible securities pay fixed interest and dividends, their values may fall if market interest rates rise and rise if market interest rates fall. Additionally, an issuer may have the right to buy back certain of the convertible securities at a time and at a price that is unfavorable to the fund.
The prices of foreign securities may be further affected by other factors, including:
- Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded.
- Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries.
- Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies.
- Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and their prices may be more volatile than U.S. securities.
The fund may participate in the initial public offering (IPO) market in some market cycles. Because of the fund's small asset base, any investment the fund may make in IPOs may significantly increase the fund's total return. As the fund's assets grow, the impact of IPO investments will decline, which may decrease the fund's total return.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - - - - - - - - - - - - - - - - - - - - - - - - - - - - (fees paid directly from your investment) CLASS A CLASS B CLASS C ------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% ------------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES(2) - - - - - - - - - - - - - - - - - - - - - - - - - - - - (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C ------------------------------------------------------- Management Fees 1.00% 1.00% 1.00% Distribution and/or Service (12b-1) Fees(3) 0.35 1.00 1.00 Other Expenses(4) 9.04 9.04 9.04 Total Annual Fund Operating Expenses(5) 10.39 11.04 11.04 ------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) There is no guarantee that actual expenses will be the same as those shown
in the table.
(3) The distributor has agreed to waive 0.35%, 1.00% and 1.00% of Rule 12b-1
distribution plan fees on Class A, Class B and Class C shares, respectively.
(4) Other Expenses are based on estimated amounts for the current fiscal year.
(5) The investment advisor has agreed to waive fees and/or reimburse expenses
(excluding interest, taxes, dividends on short sales, extraordinary items
and increases in expenses due to expense offset arrangements, if any) for
Class A, Class B and Class C shares to the extent necessary to limit the
total operating expenses of Class A shares to 2.35% (eg. if AIM waives 8.04%
of Class A expenses, AIM will also waive 8.04% of Class B and Class C
expenses). Total Annual Fund Operating Expenses for Class A, Class B and
Class C net of the above waivers are 2.00%, 2.00%, and 2.00%, respectively.
You may also be charged a transaction or other fee by the financial institution managing your account.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's operating expenses remain the same. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS
-------------------------
Class A $1,505 $3,264
Class B 1,571 3,322
Class C 1,171 3,022
-------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS
-------------------------
Class A $1,505 $3,264
Class B 1,071 3,022
Class C 1,071 3,022
-------------------------
|
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and is responsible for its day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all aspects of the fund's operations and provides investment advisory services to the fund, including obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 135 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
The advisor is to receive a fee from the fund calculated at the annual rate of 1.00% of the first $1 billion of average daily net assets and 0.95% of average daily net assets over $1 billion.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Abel Garcia, Senior Portfolio Manager, who has been responsible for the fund since 2001 and has been associated with the advisor and/or its affiliates since 2000. From 1984 to 2000, Mr. Garcia was a Senior Portfolio Manager for Waddell & Reed.
- Michael Yellen, Senior Portfolio Manager, who has been responsible for the fund since 2001 and has been associated with the advisor and/or its affiliates since 1994.
SALES CHARGES
Purchases of Class A shares of AIM Global Biotech Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "Shareholder Information--Choosing a Share Class" section of this prospectus. Purchases of Class B and Class C shares are subject to the contingent deferred sales charges listed in that section.
DIVIDENDS AND DISTRIBUTIONS
The fund expects that its distributions, if any, will consist primarily of capital gains.
DIVIDENDS
The fund generally declares and pays dividends, if any, annually.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains, if any, annually.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares at - Does not convert to Class A
the end of the month which is shares
eight years after the date on
which shares were purchased
along with a pro rata portion
of its reinvested dividends and
distributions(1)
- Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
|
(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and continue to hold them, those shares will convert to Class A shares of that fund at the end of the month which is seven years after the date on which shares were purchased. If you exchange those shares for Class B shares of another AIM Fund, the shares into which you exchanged will not convert to Class A shares until the end of the month which is eight years after the date on which you purchased your original shares.
DISTRIBUTION AND SERVICE (12b-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
A-1 MCF--08/01
CATEGORY II INITIAL SALES CHARGES
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
CATEGORY III INITIAL SALES CHARGES
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
|
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE PURCHASE MADE CLASS B CLASS C ---------------------------------------------------------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None ---------------------------------------------------------- |
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with shares currently owned (Class A, B or C) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all other shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a
13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
Purchases of Class A shares of AIM Tax-Exempt Cash Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Class B and Class C shares of AIM Floating Rate Fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--08/01 A-2
THE AIM FUNDS
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM Large Cap Opportunities Fund, AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund) are as follows:
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
----------------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 25
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------------
|
HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
----------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and check to the transfer agent, slip from your confirmation
A I M Fund Services, Inc., statement to the transfer agent.
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Select the AIM Bank Connection
methods described above. option on your completed account
application or complete an AIM Bank
Connection form. Mail the
application or form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
|
Purchase orders will not be processed unless the account application and purchase payment are received in good order.
A- 3 MCF--08/01
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing the AIM Fund to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $25. You may stop the Automatic Investment Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund accounts with the identical registration. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the 10th or 25th day of the month, whichever you specify, in the amount you specify. The minimum amount you can exchange to another AIM Fund is $25.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any AIM Fund at net asset value. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same AIM Fund. You may invest your dividends and distributions (1) into another AIM Fund in the same class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at least $5,000; or (b) in the AIM Fund receiving the dividend must be at least $500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your AIM Fund holdings should be rebalanced, on a percentage basis, between two and ten of your AIM Funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your AIM Funds for shares of the same class of one or more other AIM Funds in your portfolio. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. You may realize taxable gains from these exchanges. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through tax-sheltered retirement plans made available to corporations, individuals and employees of non-profit organizations and public schools. A plan document must be adopted to establish a retirement plan. You may use AIM sponsored retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans, 401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit Sharing plans, or another sponsor's retirement plan. The plan custodian of the AIM sponsored retirement plan assesses an annual maintenance fee of $10. Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
Generally, we will not charge you any fees to redeem your shares. Your broker or financial consultant may charge service fees for handling redemption transactions. Your shares also may be subject to a contingent deferred sales charge (CDSC).
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares subject to a CDSC within 18 months of the purchase of the Class A shares, you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES OR CLASS C
SHARES ACQUIRED BY EXCHANGE FROM AIM CASH
RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the CDSC on Class B shares or Class C shares acquired by exchange from AIM Cash Reserve Shares of AIM Money Market Fund at the time of the exchange into Class B shares or Class C shares.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM Floating Rate Fund, the early withdrawal charge applicable to shares of AIM Floating Rate Fund will be applied instead of the CDSC normally applicable to Class B shares.
MCF--08/01 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $250,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
You may, with limited exceptions, redeem from an IRA account
by telephone. Redemptions from other types of retirement
accounts must be requested in writing.
By AIM Internet Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $250,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet. The
transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
-------------------------------------------------------------------------------------------
|
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--08/01
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $250,000;
(2) you request that payment be made to someone other than the name registered on the account;
(3) you request that payment be sent somewhere other than the bank of record on the account; or
(4) you request that payment be sent to a new address or an address that changed in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution.
REINSTATEMENT PRIVILEGE
You may, within 120 days after you sell shares (except Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund), reinvest all or part of your redemption proceeds in Class A shares of any AIM Fund at net asset value in an identically registered account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting the difference between the initial sales charges on those Funds and the ones in which you will be investing. In addition, if you paid a contingent deferred sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC if you later redeem that amount. You must notify the transfer agent in writing at the time you reinstate that you are exercising your reinstatement privilege.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have not provided a correct Social Security
or other tax ID number on your account application, the AIM Fund may, at its
discretion, redeem the account and distribute the proceeds to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those of another AIM Fund. Before requesting an exchange, review the prospectus of the AIM Fund you wish to acquire. Exchange privileges also apply to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the same class of another AIM Fund. You may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You also may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares of another AIM Fund, but only if the AIM Cash Reserve Shares were purchased directly and not acquired by exchange. You may be required to pay an initial sales charge when exchanging from a Fund with a lower initial sales charge than the one into which you are exchanging. If you exchange from Class A shares not subject to a CDSC into Class A shares subject to those charges, you will be charged a CDSC when you redeem the exchanged shares. The CDSC charged on redemption of those shares will be calculated starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund), but only if you acquired the original shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an initial sales charge;
MCF--08/01 A-6
(ii) on or after May 1, 1994 by exchange from Class A shares subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, but only if you acquired the original shares by exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class C shares.
(5) AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares and Class C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- You must meet the minimum purchase requirements for the AIM Fund into which you are exchanging;
- Shares of the AIM Fund you wish to acquire must be available for sale in your state of residence;
- Exchanges must be made between accounts with identical registration information;
- The account you wish to exchange from must have a certified tax identification number (or the Fund has received an appropriate Form W-8 or W-9);
- Shares must have been held for at least one day prior to the exchange;
- If you have physical share certificates, you must return them to the transfer agent prior to the exchange; and
- You are limited to a maximum of 10 exchanges per calendar year, because excessive short-term trading or market-timing activity can hurt fund performance. If you exceed that limit, or if an AIM Fund or the distributor determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it may reject any additional exchange orders. An exchange is the movement out of (redemption) one AIM Fund and into (purchase) another AIM Fund.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the purchase of shares being acquired in an exchange for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. There is no fee for exchanges. The exchange privilege is not an option or right to purchase shares. Any of the participating AIM Funds or the distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of each registered owner exactly as the shares are registered, the account registration and account number, the dollar amount or number of shares to be exchanged and the names of the AIM Funds from which and into which the exchange is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by telephone, including that the transfer agent must receive exchange requests during the hours of the customary trading session of the NYSE; however, you still will be allowed to exchange by telephone even if you have changed your address of record within the preceding 30 days.
BY INTERNET
You will be allowed to exchange by internet if (1) you do not hold physical
share certificates; (2) you can provide proper identification information; and
(3) you have established the internet trading option.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time you held the original shares will be added to the holding period of the Class B or Class C shares, respectively, into which you exchanged for the purpose of calculating contingent deferred sales charges (CDSC) if you later redeem the exchanged shares. If you redeem Class B shares acquired by exchange via a tender offer by AIM Floating Rate Fund, you will be credited with the time period you held the shares of AIM Floating Rate Fund for the purpose of computing the early withdrawal charge applicable to those shares.
EACH AIM FUND AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME TO:
- REJECT OR CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER;
- MODIFY ANY TERMS OR CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND;
- REJECT OR CANCEL ANY REQUEST TO ESTABLISH THE AUTOMATIC INVESTMENT PLAN AND SYSTEMATIC WITHDRAWAL PLAN OPTIONS ON THE SAME ACCOUNT; OR
- WITHDRAW ALL OR ANY PART OF THE OFFERING MADE BY THIS PROSPECTUS.
A-7 MCF--08/01
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The AIM Funds value portfolio securities for which market quotations are readily available at market value. The AIM Funds value short-term investments maturing within 60 days at amortized cost, which approximates market value. AIM Money Market Fund and AIM Tax-Exempt Cash Fund value all of their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the NYSE, events occur that materially affect the value of the security, the AIM Funds may value the security at its fair value as determined in good faith by or under the supervision of the Board of Directors or Trustees of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's net asset value will be subject to the judgment of the Board of Directors or Trustees or its designee instead of being determined by the market. Because some of the AIM Funds may invest in securities that are primarily listed on foreign exchanges that trade on days when the AIM Funds do not price their shares, the value of those funds' assets may change on days when you will not be able to purchase or redeem fund shares.
Each AIM Fund determines the net asset value of its shares on each day the NYSE is open for business, as of the close of the customary trading session, or any earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each day the NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours of the customary trading session of the NYSE. The AIM Funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. An AIM Fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets. Different tax rates may apply to ordinary income and long-term capital gain distributions, regardless of how long you have held your shares. Every year, you will be sent information showing the amount of dividends and distributions you received from each AIM Fund during the prior year.
Any long-term or short-term capital gains realized from redemptions of AIM Fund shares will be subject to federal income tax. Exchanges of shares for shares of another AIM Fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax.
INVESTORS IN TAX-EXEMPT FUNDS SHOULD READ THE INFORMATION UNDER THE HEADING "OTHER INFORMATION -- SPECIAL TAX INFORMATION REGARDING THE FUND" IN THEIR PROSPECTUS.
The foreign, state and local tax consequences of investing in AIM Fund shares may differ materially from the federal income tax consequences described above. You should consult your tax advisor before investing.
MCF--08/01 A-8
More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of this prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of Funds--Registration Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us
BY MAIL: A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
BY TELEPHONE: (800) 347-4246
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
http://www.aimfunds.com
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
----------------------------------- AIM Global Biotech Fund SEC 1940 Act file number: 811-05426 ----------------------------------- [AIM LOGO APPEARS HERE] www.aimfunds.com -PRO-1 INVEST WITHDISCIPLINE --Registered Trademark-- --Registered Trademark-- |
Subject to Completion -- Dated October 12, 2001
The information in this Statement of Additional Information is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer of sale is not permitted.
STATEMENT OF
ADDITIONAL INFORMATION
CLASS A, CLASS B AND CLASS C SHARES OF
AIM GLOBAL BIOTECH FUND
AIM GLOBAL ENERGY FUND
AIM GLOBAL FINANCIAL SERVICES FUND
AIM GLOBAL HEALTH CARE FUND
AIM GLOBAL INFRASTRUCTURE FUND
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
(SERIES PORTFOLIOS OF
AIM INVESTMENT FUNDS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TX 77046-1173
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
AIM DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON, TEXAS 77210-4739
OR BY CALLING (800) 347-4246.
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 31, 2001 RELATING TO
THE AIM GLOBAL BIOTECH FUND PROSPECTUS DATED DECEMBER 31, 2001,
THE AIM GLOBAL ENERGY FUND PROSPECTUS DATED MARCH 1, 2001,
AS REVISED SEPTEMBER 1, 2001,
THE AIM GLOBAL FINANCIAL SERVICES FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM GLOBAL HEALTH CARE FUND PROSPECTUS DATED MARCH 1, 2001,
AS REVISED MAY 10, 2001,
THE AIM GLOBAL INFRASTRUCTURE FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM GLOBAL TELECOMMUNICATIONS AND
TECHNOLOGY FUND PROSPECTUS DATED MARCH 1, 2001
TABLE OF CONTENTS
INTRODUCTION.....................................................................................................1
GENERAL INFORMATION ABOUT THE FUNDS..............................................................................1
The Trust and Its Shares................................................................................1
INVESTMENT STRATEGIES AND RISKS..................................................................................3
Selection of Investments and Asset Allocation...........................................................6
Privatizations..........................................................................................7
Temporary Defensive Strategies..........................................................................7
Equity-Linked Derivatives...............................................................................8
Investments in Other Investment Companies...............................................................8
Depositary Receipts.....................................................................................8
Warrants or Rights.....................................................................................10
Lending of Portfolio Securities........................................................................10
Interfund Loans........................................................................................10
Money Market Instruments...............................................................................10
Commercial Bank Obligations............................................................................11
Repurchase Agreements..................................................................................11
Borrowing, Reverse Repurchase Agreements and "Roll" Transactions.......................................12
When Issued or Forward Commitment Securities...........................................................12
Short Sales............................................................................................13
OPTIONS, FUTURES AND CURRENCY STRATEGIES........................................................................13
Introduction...........................................................................................13
Special Risks of Options, Futures and Currency Strategies..............................................14
Writing Call Options...................................................................................15
Writing Put Options....................................................................................16
Purchasing Put Options.................................................................................16
Purchasing Call Options................................................................................17
Index Options..........................................................................................18
Interest Rate, Currency and Stock Index Futures Contracts..............................................19
Options on Futures Contracts...........................................................................22
Limitations on Use of Futures, Options on Futures and Certain Options on Currencies....................22
Forward Contracts......................................................................................22
Foreign Currency Strategies--Special Considerations....................................................23
Cover..................................................................................................24
RISK FACTORS....................................................................................................25
General................................................................................................25
Biotech Fund...........................................................................................25
Financial Services Fund................................................................................26
Health Care Fund.......................................................................................27
Infrastructure Fund....................................................................................27
Energy Fund............................................................................................26
Telecommunications and Technology Fund.................................................................27
Lower Quality Debt Securities..........................................................................28
Investing in Smaller Companies.........................................................................29
Illiquid Securities....................................................................................29
Foreign Securities.....................................................................................30
|
INVESTMENT RESTRICTIONS.........................................................................................35
Fundamental Restrictions...............................................................................35
Non-Fundamental Restrictions...........................................................................36
PORTFOLIO TRANSACTIONS AND BROKERAGE............................................................................38
General Brokerage Policy...............................................................................38
Allocation of Portfolio Transactions...................................................................38
Section 28(e) Standards................................................................................39
Brokerage Commissions Paid.............................................................................40
Allocation of Equity Offering Transactions.............................................................41
Portfolio Trading and Turnover.........................................................................41
MANAGEMENT......................................................................................................42
Trustees and Executive Officers........................................................................43
Investment Advisory and Administration Services relating to the Funds..................................48
Expenses of the Funds..................................................................................53
THE DISTRIBUTION PLANS..........................................................................................53
The Class A and C Plan.................................................................................53
The Class B Plan.......................................................................................54
Both Plans.............................................................................................54
THE DISTRIBUTOR.................................................................................................58
SALES CHARGES AND DEALER CONCESSIONS............................................................................60
REDUCTIONS IN INITIAL SALES CHARGES.............................................................................63
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS.....................................................................66
HOW TO PURCHASE AND REDEEM SHARES...............................................................................68
Backup Withholding.....................................................................................69
NET ASSET VALUE DETERMINATION...................................................................................71
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS........................................................................72
Reinvestment of Dividends and Distributions............................................................72
Tax Matters............................................................................................72
Taxation of the Funds..................................................................................72
Exchange and Reinstatement Privileges and Wash Sales...................................................73
Taxation of Certain Investment Activities..............................................................73
Taxation of the Funds' Shareholders....................................................................75
SHAREHOLDER INFORMATION.........................................................................................75
MISCELLANEOUS INFORMATION.......................................................................................78
Charges for Certain Account Information................................................................78
Custodian and Transfer Agent...........................................................................79
Independent Accountants................................................................................79
Legal Matters..........................................................................................79
Shareholder Liability..................................................................................79
Control Persons and Principal Holders of Securities....................................................80
|
INVESTMENT RESULTS..............................................................................................83
Total Return Quotations................................................................................83
Performance Information................................................................................88
General Information about the Funds....................................................................90
Biotech Fund...........................................................................................91
Health Care Fund.......................................................................................91
Information about the Global Health Care Industries....................................................92
Telecommunications and Technology Fund.................................................................93
Deregulation in the United States......................................................................93
Infrastructure Fund....................................................................................93
Financial Services Fund................................................................................94
Energy Fund............................................................................................94
APPENDIX........................................................................................................95
Description of Bond Ratings............................................................................95
Description of Commercial Paper Ratings................................................................96
Absence of Rating......................................................................................96
FINANCIAL STATEMENTS............................................................................................FS
|
INTRODUCTION
This Statement of Additional Information relates to the Class A, Class B and Class C shares of AIM Global Biotech Fund ("Biotech Fund"), AIM Global Financial Services Fund ("Financial Services Fund"), AIM Global Health Care Fund ("Health Care Fund"), AIM Global Infrastructure Fund ("Infrastructure Fund"), AIM Global Energy Fund ("Energy Fund") (formerly, AIM Global Resources Fund) and AIM Global Telecommunications and Technology Fund ("Telecommunications and Technology Fund") (formerly, AIM Global Telecommunications Fund) (each, a "Fund" and, collectively, the "Funds"). Each Fund, except for Biotech Fund, which is non-diversified, is a diversified series of AIM Investment Funds (the "Trust"), a registered open-end management investment company organized as a Delaware business trust.
The Trust is a series mutual fund. The rules and regulations of the Securities and Exchange Commission (the "SEC") require all mutual funds to furnish prospective investors certain information concerning the activities of the fund being considered for investment. This information for Biotech Fund is included in a Prospectus dated December 31, 2001, for Financial Services Fund is included in a Prospectus dated March 1, 2001, for Health Care Fund is included in a Prospectus dated March 1, 2001, as revised May 10, 2001, for Infrastructure Fund is included in a Prospectus dated March 1, 2001, for Energy Fund is included in a Prospectus dated March 1, 2001, as revised September 1, 2001, and for Telecommunications and Technology Fund is included in a Prospectus dated March 1, 2001. Additional copies of the Prospectuses and this Statement of Additional Information may be obtained without charge by writing the principal distributor of the Funds' shares, AIM Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739 or by calling (800) 347-4246. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish prospective investors with additional information concerning the Funds. Some of the information required to be in this Statement of Additional Information is also included in the Prospectuses; and, in order to avoid repetition, reference will be made to sections of the Prospectuses. Additionally, the Prospectuses and this Statement of Additional Information omit certain information contained in the Registration Statement filed with the SEC. Copies of the Registration Statement, including items from the Prospectuses and this Statement of Additional Information, may be obtained from the SEC by paying the charges described under its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust was organized as a Delaware business trust on May 7, 1998, and previously operated under the name G.T. Investment Funds, Inc., which was organized as a Maryland corporation on October 29, 1987. The Trust was reorganized on September 8, 1998 as a Delaware business trust, and is registered with the SEC as a diversified open-end series management investment company. The Trust currently consists of the following portfolios: AIM Developing Markets Fund, AIM Global Biotech Fund, AIM Global Financial Services Fund, AIM Global Health Care Fund, AIM Global Infrastructure Fund, AIM Global Energy Fund, AIM Global Telecommunications and Technology Fund and AIM Strategic Income Fund. Each of these funds has three separate classes: Class A, Class B and Class C shares. The Board is authorized to establish additional series of shares, or additional classes of shares of any fund, at any time. All historical financial and other information contained in this Statement of Additional Information for periods prior to September 8, 1998, is that of the series of AIM Investment Funds, Inc.
The term "majority of the outstanding shares" of the Trust, of a particular Fund or of a particular class of a Fund means, respectively, the vote of the lesser of (a) 67% or more of the shares of the Trust,
such Fund or such class present at a meeting of the Trust's shareholders, if the holders of more than 50% of the outstanding shares of the Trust, such Fund, such class are present or represented by proxy, or (b) more than 50% of the outstanding shares of the Tru st, such Fund or such class.
Unless specifically noted, the Fund's investment policies described in the Prospectuses and in this Statement of Additional Information may be changed by the Trust's Board of Trustees without shareholder approval. The Fund's policies regarding concentration and lending, and the percentage of the Fund's assets that may be committed to borrowing, are fundamental policies and may not be changed without shareholder approval.
If a percentage restriction on investment or utilization of assets in an investment policy or restriction is adhered to at the time an investment is made, a later change in percentage ownership of a security or kind of securities resulting from changing market values or a similar type of event will not be considered a violation of the Fund's investment policies or restrictions.
Class A, Class B and Class C shares of each Fund have equal rights and privileges. Each share of a particular class is entitled to one vote, to participate equally in dividends and distributions declared by the Trust's Board of Trustees with respect to the class of such Fund and, upon liquidation of the Fund, to participate proportionately in the net assets of the Fund allocable to such class remaining after satisfaction of outstanding liabilities of the Fund allocable to such class. Fund shares are fully paid, non-assessable and fully transferable when issued and have no preemptive rights and have such conversion and exchange rights as set forth in the Prospectus and this Statement of Additional Information. Fractional shares have proportionately the same rights, including voting rights, as are provided for a full share. Other than the automatic conversion of Class B Shares to Class A Shares, there are no conversions.
Shareholders of the Funds do not have cumulative voting rights, and therefore the holders of more than 50% of the outstanding shares of all Funds voting together for election of trustees may elect all of the members of the Board of Trustees of the Trust. In such event, the remaining holders cannot elect any trustees of the Trust.
Class A shares, Class B shares and Class C shares of the same Fund represent interests in that Fund's assets and have identical voting, dividend, liquidation and other rights on the same terms and conditions, except that each class of shares bears differing class-specific expenses, is subject to differing sales loads, conversion features and exchange privileges, and has exclusive voting rights on matters pertaining to that class' distribution plan (although Class A shareholders and Class B shareholders of a given Fund must approve any material increase in fees payable with respect to the Class A shares of such Fund under the Class A and C Plan.) On any matter submitted to a vote of shareholders, shares of each Fund will be voted by each Fund's shareholders individually when the matter affects the specific interest of a Fund only, such as approval of its investment management arrangements. In addition, shares of a particular class of a Fund may vote on matters affecting only that class. The shares of each Fund will be voted in the aggregate on other matters, such as the election of Trustees and ratification of the selection of the Trust's independent accountants.
Normally there will be no annual meeting of shareholders for any of the Funds in any year, except as required under the Investment Company Act of 1940, as amended (the "1940 Act"). A Trustee may be removed at any meeting of the shareholders of the Trust by a vote of the shareholders owning at least two-thirds of the outstanding shares. Any Trustee may call a special meeting of shareholders for any purpose. Furthermore, Trustees shall promptly call a meeting of shareholders solely for the purpose of removing one or more Trustees when requested in writing to do so by shareholders holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue an unlimited number of shares of each Fund. Each share of a Fund represents an interest in the Fund only, has a par value of $0.01 per share, represents an equal proportionate interest in the Fund with other shares of the Fund and is entitled to such dividends and distributions out of the income earned and gain realized on the assets belonging to the Fund as may be declared by the Board of Trustees. Each share of a Fund is equal in earnings, assets and voting privileges except that each class normally has exclusive voting rights with respect to its distribution plan and bears the expenses, if any, related to the distribution of its shares.
INVESTMENT STRATEGIES AND RISKS
The following discussion of investment policies supplements the discussion of the investment objectives and policies set forth in the Prospectus under the headings "Investment Objectives and Strategies" and "Principal Risks of Investing in the Fund." If a percentage restriction on investment or utilization of assets in an investment policy or restriction is adhered to at the time an investment is made, a later change in percentage ownership of a security or kind of securities resulting from changing market values or a similar type of event will not be considered a violation of the Fund's investment policies or restrictions.
The investment objective of each Fund, is non-fundamental and may be changed by the Board of Trustees without shareholder approval.
Biotech Fund
Examples of biotech companies include those that research, develop, manufacture or sell biotechnological products, services or processes, such as companies involved with genomics, genetic engineering, gene therapy and proteomics, and companies involved in the application and development of biotechnology areas such as health care, specialty pharmaceuticals, medical devices and tools, biochemistry, agriculture, and database, software and platform companies.
The Advisor believes demographics and the rapid development of biotechnology sciences, including drugs, proteomics, processes, delivery mechanisms, and devices that aid their acceptance and further more research and development make this an attractive industry on a global scale. Many foreign companies and countries have made biotechnology a focal point as they seek to gain market share of the ever-expanding biotechnology industry. In addition, economic sensitivity impacts this industry less than many others as individuals are more willing to pay for health-related items that may improve their standard of living.
The Advisor believes the aging demographic profile of the United States and other industrialized nations will lead to increased demand for health-related products and services that will not only treat disease and illness, but will prevent sickness and will help extend life expectancies. Increased regulation by the Food and Drug Administration will continue to support the need for companies to produce safer, purer products that treat illness without compromising the health of patients. In addition, the acknowledgement of the importance of biotech firms by larger pharmaceutical companies, as seen through acquisitions and partnerships between the two types of firms, lead the Advisor to believe this industry has the capacity for long-term growth.
Energy Fund
Examples of energy sector companies include those that develop, produce, provide, operate, own or distribute products or services related to energy. Products or services include, but are not limited to, exploration, production, development, refinement, management, storage or distribution of oil, gas, electricity and coal, as well as nuclear, geothermal, oil shale, solar power and other alternative energy sources; onshore or offshore drilling; production and well
maintenance; pipelines; energy conservation; pollution control technology; and equipment supply and services and plant design or construction.
[The Advisor believes that the liberalization of formerly socialist
economies will bring about dramatic changes in both the supply and demand for
energy related products or services. In addition, rapid industrialization in
developing countries of Asia and Latin America is generating new demands for
[energy related products or services] that are affecting world [commodities
markets]. The Advisor believes these changes are likely to create investment
opportunities that benefit from [new sources of supply and/or from changes in
commodities prices].
[During periods of accelerating inflation or currency uncertainty, worldwide investment demand for energy related products or services, tends to increase, and during periods of disinflation or currency stability, it tends to decrease. The Advisor believes that rising commodity prices and increasing worldwide energy products or services may favorably affect share prices of the energy sector companies, and investments in such companies can offer excellent opportunities to offset the effects of inflation.]
Financial Services Fund
Examples of financial services companies include commercial banks and savings institutions and loan associations and their holding companies; consumer and industrial finance companies; diversified financial services companies; investment banks; insurance brokerages; securities brokerage and investment advisory companies; real estate-related companies; leasing companies; and a variety of firms in all segments of the insurance field such as multi-line, property and casualty and life insurance and insurance holding companies.
The Advisor believes an accelerating rate of global economic interdependence will lead to significant growth in the demand for financial services. In addition, in the Advisor's view, as the industries evolve, opportunities will emerge for those companies positioned for the future. Thus, the Advisor expects that banking and related financial institution consolidation in the developed countries, increased demand for retail borrowing in developing countries, a growing need for international trade-based financing, a rising demand for sophisticated risk management, the proliferating number of liquid securities markets around the world, and larger concentrations of investable assets should lead to growth in financial service companies that are positioned for the future.
Health Care Fund
Examples of health care companies include those that are substantially engaged in the design, manufacture or sale of products or services used for or in connection with health care or medicine. Such firms may include pharmaceutical companies; firms that design, manufacture, sell or supply medical, dental and optical products, hardware or services; companies involved in biotechnology, medical diagnostic, and biochemical research and development; and companies involved in the ownership and/or operation of health care facilities.
The Fund expects that, from time to time, a significant portion of its assets may be invested in the securities of U.S. issuers. Health care industries, however, are global industries with significant, growing markets outside of the United States. A sizeable portion of the companies which comprise the health care industries are headquartered outside of the United States, and many important pharmaceutical and biotechnology discoveries and technological breakthroughs have occurred outside of the United States, primarily in Japan, the United Kingdom and Western Europe.
The Advisor believes that the global health care industries offer attractive long-term supply/demand dynamics. While the United States, Western Europe, and Japan presently account for a substantial portion of health care expenditures, this should change dramatically in the coming decade if the populations of developing countries devote an increasing percentage of income to health care.
Additionally, the Advisor believes demographics on aging point to a significant increase in demand from the industrialized nations, as the elderly account for a growing proportion of worldwide health care spending. Finally, in the Advisor's view, technology will continue to expand the range of products and services offered, with new drugs, medical devices and surgical procedures addressing medical conditions previously considered untreatable.
In addition to these underlying trends, the United States is presently experiencing a period of rapid and profound change in its own health care system, marked by the rise of managed care, the formation of health care delivery networks, and widespread consolidation across all segments of the industry. The Advisor believes that this transition offers investment opportunities in those companies acting as consolidators or otherwise gaining market share at the expense of less efficient competitors.
Infrastructure Fund
Examples of infrastructure companies include those engaged in
designing, developing or providing the following products and services:
electricity production; oil, gas, and coal exploration, development, production
and distribution; water supply, including water treatment facilities; nuclear
power and other alternative energy sources; transportation, including the
construction or operation of transportation systems; steel, concrete, or similar
types of products; communications equipment and services (including equipment
and services for both data and voice transmission); mobile communications and
cellular radio/paging; emerging technologies combining telephone, television
and/or computer systems; and other products and services, which, in the
Advisor's judgment, constitute services significant to the development of a
country's infrastructure.
The Advisor believes that a country's infrastructure is one key to the long-term success of that country's economy. The Advisor believes that adequate energy, transportation, water, and communications systems are essential elements for long-term economic growth. The Advisor believes that many developing nations, especially in Asia and Latin America, plan to make significant expenditures to the development of their infrastructure in the coming years, which is expected to facilitate increased levels of services and manufactured goods.
In the developed countries of North America, Europe, Japan and the Pacific Rim, the Advisor expects that the replacement and upgrade of transportation and communications systems should stimulate growth in the infrastructure industries of those countries. In addition, in the Advisor's view, deregulation of telecommunications and electric and gas utilities in many countries is promoting significant changes in these industries.
The Advisor believes that strong economic growth in developing countries and infrastructure replacement, upgrade, and deregulation in more developed countries provide an environment for favorable investment opportunities in infrastructure companies worldwide. In addition, the long-term growth rates of certain foreign countries' economies may be substantially higher than the long-term growth rate of the U.S. economy. An integral aspect of certain foreign countries' economies may be the development or improvement of their infrastructure.
Telecommunications and Technology Fund
Telecommunications companies cover a variety of sectors, ranging from companies concentrating on established technologies to those primarily engaged in emerging or developing technologies. The characteristics of companies focusing on the same technology will vary among countries depending upon the extent to which the technology is established in the particular country. The Advisor will allocate Telecommunications and Technology Fund's investments among these sectors depending upon its assessment of their relative long-term growth potential.
Examples of telecommunications companies include those engaged in
designing, developing or providing the following products and services:
communications equipment and services (including equipment and services for both
data and voice transmission); electronic components and equipment; broadcasting
(including television and radio, satellite, microwave and cable television and
narrowcasting); computer equipment, mobile communications and cellular
radio/paging; electronic mail; local and wide area networking and linkage of
word and data processing systems; publishing and information systems; videotext
and teletext; and emerging technologies combining telephone, television and/or
computer systems.
The Advisor believes that there are opportunities for continued growth in demand for components, products, media and systems to collect, store, retrieve, transmit, process, distribute, record, reproduce and use information. The pervasive societal impact of communications and information technologies has been accelerated by the lower costs and higher efficiencies that result from the blending of computers with telecommunications systems. Accordingly, companies engaged in the production of methods for using electronic and, potentially, video technology to communicate information are expected to be important in the Fund's portfolio. Older technologies, such as photography and print also may be represented, however.
In addition, for each Fund's investment purposes, an issuer is typically considered as located in a particular country if it (a) is organized under the laws of or has its principal office in a particular country, or (b) normally derives 50% or more of its total revenues from business in that country, provided that, in the Advisor's view, the value of such issuer's securities will tend to reflect such country's development to a greater extent than developments elsewhere. However, these are not absolute requirements, and certain companies incorporated in a particular country and considered by the Advisor to be located in that country may have substantial foreign operations or subsidiaries and/or export sales exceeding in size the assets or sales in that country.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
Each Fund expects that, from time to time, a significant portion of its assets may be invested in the securities of domestic issuers. The industry represented in each Fund, however, is a global industry with significant, growing markets outside of the United States. A sizeable proportion of the companies which comprise the infrastructure industries are headquartered outside of the United States.
For these reasons, the Advisor believes that a portfolio composed only of securities of U.S. issuers does not provide the greatest potential for return from an investment by a Fund. The Advisor uses its financial expertise in markets located throughout the world and the substantial global resources of AMVESCAP PLC in attempting to identify those countries and companies then providing the greatest potential for long-term capital appreciation. In this fashion, the Advisor seeks to enable shareholders to capitalize on the substantial investment opportunities and the potential for long-term growth of capital presented by the industry represented in each Fund.
The Advisor allocates each Fund's assets among securities of countries and in currency denominations where opportunities for meeting the Fund's investment objective are expected to be the most attractive. Each Fund may invest substantially in securities denominated in one or more currencies. Under normal conditions, each Fund invests in the securities of issuers located in at least three countries, including the United States; investments in securities of issuers in any one country, other than the United States, will represent no more than 40% of the Financial Services Fund's and the Telecommunications and Technology Fund's total assets, no more than [25%] of the Biotech Fund's total assets, and no more than 50% of each of the other Fund's total assets.
In analyzing specific companies for possible investment, the Advisor ordinarily looks for several of the following characteristics: above-average per share earnings growth; high return on invested capital; a healthy balance sheet; sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and marketing; development of new technologies; efficient service; pricing flexibility; strong management; and general operating characteristics that will enable the companies to compete successfully in their respective markets.
[With respect to the Energy Fund, the Advisor has identified four areas that it expects will create investment opportunities: (i) improving supply/demand fundamentals, which may result in higher energy prices; (ii) privatization of state-owned energy sector businesses; (iii) management which can improve production efficiencies without correspondingly increasing commodity prices; and (iv) service companies with emerging technologies that can enhance productivity or reduce production costs. Of course, there is no certainty that these factors will produce the anticipated results.]
With respect to the Telecommunications and Technology Fund, the Advisor has identified four areas that it expects will create investment opportunities: (i) deregulation of companies in the industry, which will allow competition to promote greater efficiencies; (ii) privatization of state-owned telecommunications businesses; (iii) development of infrastructure in underdeveloped countries and upgrading of services in other countries; and (iv) emerging technologies that will enhance productivity and reduce costs in the telecommunications industry. Of course, there is no certainty that these factors will produce the anticipated results.
There may be times when, in the opinion of the Advisor, prevailing market, economic or political conditions warrant reducing the proportion of the Funds' assets invested in equity securities and increasing the proportion held in cash (U.S. dollars, foreign currencies or multinational currency units) or invested in debt securities or high quality money market instruments issued by corporations, or the U.S., or a foreign government. A portion of each Fund's assets normally will be held in cash (U.S. dollars, foreign currencies or multinational currency units) or invested in foreign or domestic high quality money market instruments pending investment of proceeds from new sales of Fund shares to provide for ongoing expenses and to satisfy redemptions.
In certain countries, governmental restrictions and other limitations on investment may affect a Fund's ability to invest in such countries. In addition, in some instances only special classes of securities may be purchased by foreigners and the market prices, liquidity and rights with respect to those securities may vary from shares owned by nationals. The Advisor is not aware at this time of the existence of any investment or exchange control regulations which might substantially impair the operations of the Funds as described in the Prospectus and this Statement of Additional Information. Restrictions may in the future, however, make it undesirable to invest in certain countries. None of the Funds has a present intention of making any significant investment in any country or stock market in which the Advisor considers the political or economic situation to threaten a Fund with substantial or total loss of its investment in such country or market.
PRIVATIZATIONS
The governments of some foreign countries have been engaged in selling part or all of their stakes in government-owned or controlled enterprises ("privatizations"). The Advisor believes that privatizations may offer opportunities for significant capital appreciation and intends to invest assets of the Funds in privatizations in appropriate circumstances. In certain foreign countries, the ability of foreign entities such as the Funds to participate may be limited by local law, or by the terms on which a Fund may be permitted to participate may be less advantageous than those for local investors. There can be no assurance that foreign governments will continue to sell companies currently owned or controlled by them or that privatization programs will be successful.
TEMPORARY DEFENSIVE STRATEGIES
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, each of the Funds may temporarily hold all or a portion of its assets in cash (U.S. dollars, foreign currencies or multinational currency units), money market instruments, or
high-quality debt securities. Each of the Funds may also invest up to 25% of its total assets in money market investment companies advised by AIM or its affiliates ("Affiliated Money Market Funds") for these purposes. In addition, for temporary defensive purposes, most or all of each Fund's investments may be made in the United States and denominated in U.S. dollars. To the extent a Fund employs a temporary defensive strategy, it will not be invested so as to achieve directly its investment objectives. For a full description of money market instruments, see "Money Market Instruments" herein.
EQUITY-LINKED DERIVATIVES
The Funds may invest in equity-linked derivative products designed to replicate the composition and performance of particular indices. Examples of such products include S&P Depositary Receipts ("SPDRs"), World Equity Benchmark Series ("WEBs"), NASDAQ 100 tracking shares ("QQQs"), Dow Jones Industrial Average Instruments ("DIAMONDS") and Optimised Portfolios as Listed Securities ("OPALS"). Investments in equity-linked derivatives involve the same risks associated with a direct investment in the types of securities included in the indices such products are designed to track. There can be no assurance that the trading price of the equity-linked derivatives will equal the underlying value of the basket of securities purchased to replicate a particular index or that such basket will replicate the index. Investments in equity-linked derivatives may constitute investments in other investment companies. See "Investments in Other Investment Companies."
INVESTMENTS IN OTHER INVESTMENT COMPANIES
[With respect to certain countries, investments by a Fund presently may be made only by acquiring shares of other investment companies (including investment vehicles or companies advised by AIM or its affiliates) with local governmental approval to invest in those countries. At such time as direct investment in these countries is allowed, the Funds anticipate investing directly in these markets.]
A Fund may invest in other investment companies to the extent permitted by the 1940 Act, and the rules and regulations thereunder, and if applicable, exemptive orders granted by the SEC. The following restrictions apply to investments in other investment companies other than Affiliated Money Market Funds: (i) a Fund may not purchase more than 3% of the total outstanding voting stock of another investment company; (ii) a Fund may not invest more than 5% of its total assets in securities issued by another investment company; and (iii) a Fund may not invest more than 10% of its total assets in securities issued by other investment companies other than Affiliated Money Market Funds. With respect to a Fund's purchase of shares of another investment company, including Affiliated Money Market Funds, the Fund will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company. The Funds have obtained an exemptive order from the SEC allowing them to invest in Affiliated Money Market Funds, provided that investments in Affiliated Money Market Funds do not exceed 25% of the total assets of the investing Fund.
DEPOSITARY RECEIPTS
A Fund may hold securities of foreign issuers in the form of American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"), Global Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs") or other securities convertible into securities of eligible foreign issuers. These securities may not necessarily be denominated in the same currency as the securities for which they may be exchanged. ADRs and ADSs are typically issued by an American bank or trust company and evidence ownership of underlying securities issued by a foreign corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts ("CDRs"), are issued in Europe typically by foreign banks and trust companies and evidence ownership of either foreign or domestic securities. GDRs are similar to EDRs and are designed for use in several international financial markets. Generally, ADRs and ADSs in registered form are designed for use in U.S. securities markets and EDRs in bearer form are designed for use in European securities markets. For purposes of each Fund's investment policies, a Fund's investments in ADRs, ADSs, GDRs and EDRs will be deemed to be investments in the equity securities representing securities of foreign issuers into which they may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While ADRs issued under these two types of facilities are in some respects similar, there are distinctions between them relating to the rights and obligations of ADR holders and the practices of market participants. A depository may establish an unsponsored facility without participation by (or even necessarily the acquiescence of) the issuer of the deposited securities, although typically the depository requests a letter of non-objection from such issuer prior to the establishment of the facility. Holders of unsponsored ADRs generally bear all the costs of such facilities. The depository usually charges fees upon the deposit and withdrawal of the deposited securities, the conversion of dividends into U.S. dollars, the disposition of non-cash distributions, and the performance of other services. The depository of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited securities or to pass-through voting rights to ADR holders in respect of the deposited securities. Sponsored ADR facilities are created in generally the same manner as unsponsored facilities, except that the issuer of the deposited securities enters into a deposit agreement with the depository. The deposit agreement sets out the rights and responsibilities of the issuer, the depository and the ADR holders. With sponsored facilities, the issuer of the deposited securities generally will bear some of the costs relating to the facility (such as dividend payment fees of the depository), although ADR holders continue to bear certain other costs (such as deposit and withdrawal fees). Under the terms of most sponsored arrangements, depositories agree to distribute notices of shareholder meetings and voting instructions, and to provide shareholder communications and other information to the ADR holders at
the request of the issuer of the deposited securities. The Funds may invest in both sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Fund in connection with other securities or separately and provide the Fund with the right to purchase at a later date other securities of the issuer. Warrants are securities permitting, but not obligating, their holder to subscribe for other securities or commodities. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holder to purchase, and they do not represent any rights in the assets of the issuer. As a result, warrants may be considered more speculative than certain other types of investments. In addition, the value of a warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to its expiration date.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Fund may make secured loans of its securities holdings amounting to not more than 33 1/3% of its total assets. Securities loans are made to broker/dealers or institutional investors pursuant to agreements requiring that the loans be continuously secured by collateral consisting of cash, U.S. government securities, or certain other irrevocable letters of credit at least equal at all times to the value of the securities lent plus any accrued interest, "marked to market" on a daily basis. The collateral for such loans, if received in cash, may be held in investment vehicles with investment objectives and policies similar to those of money market funds or limited duration income funds (longer maturities than may be held by money market funds), advised by the Advisor or its affiliates or by unaffiliated advisers. The Funds may pay a fee to the Advisor of such investment vehicles for its services. The Funds may pay reasonable administrative and custodial fees in connection with the loans of their securities. While the securities loan is outstanding, a Fund will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities, as well as interest on the investment of the collateral or a fee from the borrower. A Fund will have a right to call each loan and obtain the securities within the stated settlement period. A Fund will not have the right to vote equity securities while they are being lent, but it may call in a loan in anticipation of any important vote. The risks in lending portfolio securities, as with other extensions of secured credit, consist of possible delays in receiving additional collateral or in recovery of the securities and possible loss of rights in the collateral should the borrower fail financially. Loans will only be made to firms deemed by the Advisor to be of good standing and will not be made unless, in the judgment of the Advisor, the consideration to be earned from such loans would justify the risk.
INTERFUND LOANS
Each Fund may lend up to 15% of its net assets to other AIM Funds and each Fund may borrow from other AIM Funds to the extent permitted under such Fund's investment restrictions. During temporary or emergency periods, the percentage of a Fund's net assets that may be loaned to other AIM Funds may be increased as permitted by the SEC. If a Fund has borrowed from other AIM Funds and has aggregate borrowings from all sources that exceed 10% of such Fund's total assets, such Fund will secure all of its loans from other AIM Funds. The ability of the Funds to lend their securities to other AIM Funds is subject to certain other terms and conditions.
MONEY MARKET INSTRUMENTS
Money market instruments in which the Funds may invest include U.S. government securities, high-grade commercial paper, bank certificates of deposit, bankers' acceptances and repurchase agreements related to any of the foregoing. "High-grade commercial paper" refers to commercial paper rated A-1 by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or P-1 by Moody's Investors Services, Inc. or, if not rated, determined by the Advisor to be of comparable quality.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Fund's investment policies with respect to bank obligations, obligations of foreign branches of U.S. banks and of foreign banks are obligations of the issuing bank and may be general obligations of the parent bank. Such obligations may, however, be limited by the terms of a specific obligation and by government regulation. As with investments in non-U.S. securities in general, investments in the obligations of foreign branches of U.S. banks and of foreign banks may subject each Fund to investment risks that are different in some respects from those of investments in obligations of U.S. issuers. Although each Fund will typically acquire obligations issued and supported by the credit of U.S. or foreign banks having total assets at the time of purchase of $1 billion or more, this $1 billion figure is not an investment policy or restriction of each Fund. For the purposes of calculation with respect to the $1 billion figure, the assets of a bank will be deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which a Fund purchases a security from a bank or recognized securities dealer and simultaneously commits to resell that security to the bank or dealer at an agreed upon price, date, and market rate of interest unrelated to the coupon rate or maturity of the purchased security. Although repurchase agreements carry certain risks not associated with direct investments in securities, including possible decline in the market value of the underlying securities and delays and costs to the Fund if the other party to the repurchase agreement becomes bankrupt, the Funds intend to enter into repurchase agreements only with banks and dealers believed by the Advisor to present minimal credit risks in accordance with guidelines established by the Trust's Board of Trustees, as applicable. The Advisor will review and monitor the creditworthiness of such institutions under the applicable Board's general supervision.
Each Fund will invest only in repurchase agreements collateralized at all times in an amount at least equal to the repurchase price plus accrued interest. To the extent that the proceeds from any sale of such collateral upon a default in the obligation to repurchase were less than the repurchase price, a Fund would suffer a loss. If the financial institution which is party to the repurchase agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or other liquidation proceedings, there may be restrictions on a Fund's ability to sell the collateral and a Fund could suffer a loss. However, with respect to financial institutions whose bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy Code, each Fund intends to comply with provisions under such Code that would allow the immediate resale of such collateral. Each Fund will not enter into a repurchase agreement with a maturity of more than seven days if, as a result, more than 15% of the value of its net assets would be invested in such repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Fund may borrow from banks or may borrow through reverse repurchase agreements and "roll" transactions in connection with meeting requests for the redemptions of the Funds' shares. Each Fund's borrowings will not exceed 33 1/3% of its total assets, i.e., the Fund's total assets at all times will equal at least 300% of the amount of outstanding borrowings. If market fluctuations in the value of a Fund's securities holdings or other factors cause the ratio of a Fund's total assets to outstanding borrowings to fall below 300%, within three days (excluding Sundays and holidays) of such event that Fund may be required to sell portfolio securities to restore the 300% asset coverage, even though from an investment standpoint such sales might be disadvantageous. Each Fund may also borrow up to 5% of its total assets for temporary or emergency purposes other than to meet redemptions. However, no additional investments will be made if a Fund's borrowings exceed 5% of its total assets. Any borrowing by a Fund may cause greater fluctuation in the value of its shares than would be the case if that Fund did not borrow.
Each Fund's fundamental investment limitations permit the Fund to borrow money for leveraging purposes. However, each Fund is currently prohibited, pursuant to a non-fundamental investment policy, from borrowing money in order to purchase securities. Nevertheless, this policy may be changed in the future by the Trust's Board of Trustees, as applicable. If a Fund employs leverage in the future, it would be subject to certain additional risks. Use of leverage creates an opportunity for greater growth of capital but would exaggerate any increases or decreases in the net asset value of a Fund. When the income and gains on securities purchased with the proceeds of borrowings exceed the costs of such borrowings, a Fund's earnings or a Fund's net asset value will increase faster than otherwise would be the case; conversely, if such income and gains fail to exceed such costs, a Fund's earnings or a Fund's net asset value would decline faster than would otherwise be the case.
Each Fund may enter into reverse repurchase agreements. A reverse repurchase agreement is a borrowing transaction in which the portfolio transfers possession of a security to another party, such as a bank or broker/dealer, in return for cash, and agrees to repurchase the security in the future at an agreed upon price, which includes an interest component. Each Fund [(except Biotech Fund)] may also engage in "roll" borrowing transactions, which involve the sale of Government National Mortgage Association certificates or other securities together with a commitment (for which the Fund may receive a fee) to purchase similar, but not identical, securities at a future date. Each Fund will segregate with a custodian liquid assets in an amount sufficient to cover its obligations under "roll" transactions and reverse repurchase agreements with broker/dealers. No segregation is required for reverse repurchase agreements with banks.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES
Each Fund may purchase debt securities on a "when-issued" basis and may purchase or sell such securities on a "forward commitment" basis in order to hedge against anticipated changes in interest rates and prices. The price, which is generally expressed in yield terms, is fixed at the time that the commitment is made, but delivery and payment for the securities take place at a later date. When-issued securities and forward commitments may be sold prior to the settlement date, but a Fund will purchase or sell when-issued securities or enter into forward commitments only with the intention of actually receiving or delivering the securities, as the case may be. No income accrues on securities that have been purchased pursuant to a forward commitment or on a when-issued basis prior to delivery to the Fund. If a Fund disposes of the right to acquire a when-issued security prior to its acquisition or disposes of its right to deliver or receive against a forward commitment, it may incur a gain or loss. At the time that a Fund enters into a transaction on a when-issued or forward commitment basis, the Fund will segregate cash or liquid securities equal to the value of the when-issued or forward commitment securities with its custodian and will mark to market daily such assets. There is a risk that the securities may not be delivered and that the Fund may incur a loss.
SHORT SALES
Each Fund may make short sales of securities, except Biotech Fund may only make short sales "against the box". A short sale "against the box" is a type of short sale, where, at the time of the sale the Fund owns the security it has sold short or has the immediate and unconditional right to acquire the identical security, at no additional cost. A short sale is a transaction in which a Fund sells a security in anticipation that the market price of that security will decline. A Fund may make short sales (i) as a form of hedging to offset potential declines in long positions in securities it owns, or anticipates acquiring, or in similar securities, and (ii) in order to maintain flexibility in its securities holdings.
When a Fund makes a short sale of a security it does not own, it must borrow the security sold short and deliver it to the broker/dealer or other intermediary through which it made the short sale. The Fund may have to pay a fee to borrow particular securities and will often be obligated to pay over any payments received on such borrowed securities.
A Fund's obligation to replace the borrowed security when the borrowing is called or expires will be secured by collateral deposited with the intermediary. The Fund will also be required to deposit collateral with its custodian to the extent, if any, necessary so that the value of both collateral deposits in the aggregate is at all times equal to at least 100% of the current market value of the security sold short. Depending on arrangements made with the intermediary from which it borrowed the security regarding payment of any amounts received by that Fund on such security, a Fund may not receive any payments (including interest) on its collateral deposited with such intermediary.
If the price of the security sold short increases between the time of the short sale and the time a Fund replaces the borrowed security, that Fund will incur a loss; conversely, if the price declines, the Fund will realize a gain. Any gain will be decreased, and any loss increased, by the transaction costs associated with the transaction. Although a Fund's gain is limited by the price at which it sold the security short, its potential loss theoretically is unlimited.
No Fund will make a short sale if, after giving effect to such sale, the market value of the securities sold short exceeds 25% of the value of its total assets or the Fund's aggregate short sales of the securities of any one issuer exceed the lesser of 2% of the Fund's net assets or 2% of the securities of any class of the issuer. Moreover, a Fund may engage in short sales only with respect to securities listed on a national securities exchange. A Fund may make short sales "against the box" without respect to such limitations [, except Biotech Fund may pledge no more than 10% of its total assets as collateral for short sales "against the box" at any time.]. In this type of short sale, at the time of the sale the Fund owns the security it has sold short or has the immediate and unconditional right to acquire at no additional cost the identical security.
OPTIONS, FUTURES AND CURRENCY STRATEGIES
INTRODUCTION
Each Fund may use forward currency contracts, futures contracts, options on securities, options on indices, options on currencies, and options on futures contracts to attempt to hedge against the overall level of investment and currency risk normally associated with Fund investments. These instruments are often referred to as "derivatives," which may be defined as financial instruments whose performance is derived, at least in part, from the performance of another asset (such as a security, currency or an index of securities). Each Fund may invest in such instruments up to the full value of its portfolio assets.
To attempt to hedge against adverse movements in exchange rates between currencies, each Fund may enter into forward currency contracts for the purchase or sale of a specified currency at a specified future date. Such contracts may involve the purchase or sale of a foreign currency against the U.S. dollar or may involve two foreign currencies. A Fund may enter into forward currency contracts either with respect to specific transactions or with respect to its portfolio positions. A Fund also may purchase and sell put and call options on currencies, futures contracts on currencies and options on such futures contracts to hedge against movements in exchange rates.
In addition, each Fund may purchase and sell put and call options on equity and debt securities to hedge against the risk of fluctuations in the prices of securities held by a Fund or that the Advisor intends to include in a Fund's holdings. Each Fund also may purchase and sell put and call options on stock indexes to hedge against overall fluctuations in the securities markets generally or in a specific market sector.
Further, each Fund may sell stock index futures contracts and may purchase put options or write call options on such futures contracts to protect against a general stock market decline or a decline in a specific market sector that could adversely affect the portfolio's holdings. Each Fund also may purchase stock index futures contracts and purchase call options or write put options on such contracts to hedge against a general stock market or market sector advance and thereby attempt to lessen the cost of future securities acquisitions. Each Fund may use interest rate futures contracts and options thereon to hedge the debt portion of its portfolio against changes in the general level of interest rates.
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use of options, futures contracts and forward currency contracts ("Forward Contracts") involves special considerations and risks, as described below. Risks pertaining to particular instruments are described in the sections that follow.
(1) Successful use of most of these instruments depends upon the Advisor's ability to predict movements of the overall securities and currency markets, which requires different skills than predicting changes in the prices of individual securities. While the Advisor is experienced in the use of these instruments, there can be no assurance that any particular strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation, between price movements of an instrument and price movements of the investments being hedged. For example, if the value of an instrument used in a short hedge increased by less than the decline in value of the hedged investment, the hedge would not be fully successful. Such a lack of correlation might occur due to factors unrelated to the value of the investments being hedged, such as speculative or other pressures on the markets in which the hedging instrument is traded. The effectiveness of hedges using hedging instruments on indices will depend on the degree of correlation between price movements in the index and price movements in the investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly or partially offsetting the negative effect of unfavorable price movements in the investments being hedged. However, hedging strategies can also reduce opportunity for gain by offsetting the positive effect of favorable price movements in the hedged investments. For example, if a Fund entered into a short hedge because the Advisor projected a decline in the price of a security in the Fund's portfolio, and the price of that security increased instead, the gain from that increase might be wholly or partially offset by a decline in the price of the hedging instrument. Moreover, if the price of the hedging instrument declined by more than the increase in the price of the security, the Fund could suffer a loss. In either such case, the Fund would have been in a better position had it not hedged at all.
(4) As described below, the Fund might be required to maintain assets as "cover," maintain segregated accounts or make margin payments when it takes positions in instruments involving obligations to third parties (i.e., instruments other than purchased options). If the Fund were unable to close out its positions in such instruments, it might be required to continue to maintain such assets or accounts or make such payments until the position expired or matured. The requirements might impair the Fund's ability to sell a portfolio security or make an investment at a time when it would otherwise be favorable to do so, or require that the Fund sell a portfolio security at a disadvantageous time. The Fund's ability to close out a position in an instrument prior to expiration or maturity depends on the existence of a liquid secondary market or, in the absence of such a market, the ability and willingness of the other party to the transaction ("contra party") to enter into a transaction closing out the position. Therefore, there is no assurance that any position can be closed out at a time and price that is favorable to the Fund.
WRITING CALL OPTIONS
Each Fund may write (sell) call options on securities, indices and currencies. Call options generally will be written on securities and currencies that, in the opinion of the Advisor are not expected to make any major price moves in the near future but that, over the long term, are deemed to be attractive investments for the Funds.
A call option gives the holder (buyer) the right to purchase a security or currency at a specified price (the exercise price) at any time until (American style) or on (European style) a certain date (the expiration date). So long as the obligation of the writer of a call option continues, he or she may be assigned an exercise notice, requiring him or her to deliver the underlying security or currency against payment of the exercise price. This obligation terminates upon the expiration of the call option, or such earlier time at which the writer effects a closing purchase transaction by purchasing an option identical to that previously sold.
Fund securities or currencies on which call options may be written will be purchased solely on the basis of investment considerations consistent with each Fund's investment objective. When writing a call option, a Fund, in return for the premium, gives up the opportunity for profit from a price increase in the underlying security or currency above the exercise price, and retains the risk of loss should the price of the security or currency decline. Unlike one who owns securities or currencies not subject to an option, a Fund has no control over when it may be required to sell the underlying securities or currencies, since most options may be exercised at any time prior to the option's expiration. If a call option that a Fund has written expires, the Fund will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security or currency during the option period. If the call option is exercised, the Fund will realize a gain or loss from the sale of the underlying security or currency, which will be increased or offset by the premium received. Each Fund does not consider a security or currency covered by a call option to be "pledged" as that term is used in that Fund's policy that limits the pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the value of the hedged investment would be offset to the extent of the premium received for writing the option. However, if the security or currency appreciates to a price higher than the exercise price of the call option, it can be expected that the option will be exercised and a Fund will be obligated to sell the security or currency at less than its market value.
The premium that a Fund receives for writing a call option is deemed to constitute the market value of an option. The premium the Fund will receive from writing a call option will reflect, among other things, the current market price of the underlying investment, the relationship of the exercise price to such market price, the historical price volatility of the underlying investment, and the length of the option period. In determining whether a particular call option should be written, the Advisor will consider
the reasonableness of the anticipated premium and the likelihood that a liquid secondary market will exist for those options.
Closing transactions will be effected in order to realize a profit on an outstanding call option, to prevent an underlying security or currency from being called, or to permit the sale of the underlying security or currency. Furthermore, effecting a closing transaction will permit a Fund to write another call option on the underlying security or currency with either a different exercise price or expiration date, or both.
Each Fund will pay transaction costs in connection with the writing of options and in entering into closing purchase contracts. Transaction costs relating to options activity are normally higher than those applicable to purchases and sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current market values of the underlying securities, indices or currencies at the time the options are written. From time to time, a Fund may purchase an underlying security or currency for delivery in accordance with the exercise of an option, rather than delivering such security or currency from its portfolio. In such cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more, respectively, than the premium received from writing the option. Because increases in the market price of a call option generally will reflect increases in the market price of the underlying security or currency, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security or currency owned by a Fund.
WRITING PUT OPTIONS
Each Fund may write put options on securities, indices and currencies. A put option gives the purchaser of the option the right to sell, and the writer (seller) the obligation to buy, the underlying security or currency at the exercise price at any time until (American style) or on (European style) the expiration date. The operation of put options in other respects, including their related risks and rewards, is substantially identical to that of call options.
A Fund generally would write put options in circumstances where the Advisor wishes to purchase the underlying security or currency for a Fund's holdings at a price lower than the current market price of the security or currency. In such event, a Fund would write a put option at an exercise price that, reduced by the premium received on the option, reflects the lower price it is willing to pay. Since the Fund would also receive interest on debt securities or currencies maintained to cover the exercise price of the option, this technique could be used to enhance current return during periods of market uncertainty. The risk in such a transaction would be that the market price of the underlying security or currency would decline below the exercise price less the premium received.
Writing put options can serve as a limited long hedge because increases in the value of the hedged investment would be offset to the extent of the premium received for writing the option. However, if the security or currency depreciates to a price lower than the exercise price of the put option, it can be expected that the put option will be exercised and a Fund will be obligated to purchase the security or currency at greater than its market value.
PURCHASING PUT OPTIONS
Each Fund may purchase put options on securities, indices and currencies. As the holder of a put option, a Fund would have the right to sell the underlying security or currency at the exercise price at any time until (American style) or on (European style) the expiration date. A Fund may enter into closing sale transactions with respect to such options, exercise such option or permit such option to expire.
Each Fund may purchase a put option on an underlying security or currency ("protective put") owned by the Fund in order to protect against an anticipated decline in the value of the security or currency. Such hedge protection is provided only during the life of the put option when the Fund, as the holder of the put option, is able to sell the underlying security or currency at the put exercise price regardless of any decline in the underlying security's market price or currency's exchange value. The premium paid for the put option and any transaction costs would reduce any profit otherwise available for distribution when the security or currency is eventually sold.
A Fund may also purchase put options at a time when it does not own the underlying security or currency. By purchasing put options on a security or currency it does not own, that Fund seeks to benefit from a decline in the market price of the underlying security or currency. If the put option is not sold when it has remaining value, and if the market price of the underlying security or currency remains equal to or greater than the exercise price during the life of the put option, the Fund will lose its entire investment in the put option. In order for the purchase of a put option to be profitable, the market price of the underlying security or currency must decline sufficiently below the exercise price to cover the premium and transaction costs, unless the put option is sold in a closing sale transaction.
PURCHASING CALL OPTIONS
Each Fund may purchase call options on securities, indices and currencies. As the holder of a call option, the Fund would have the right to purchase the underlying security or currency at the exercise price at any time until (American style) or on (European style) the expiration date. A Fund may enter into closing sale transactions with respect to such options, exercise such options or permit such options to expire.
Call options may be purchased by a Fund for the purpose of acquiring the underlying security or currency for its portfolio. Utilized in this fashion, the purchase of call options would enable a Fund to acquire the security or currency at the exercise price of the call option plus the premium paid. At times, the net cost of acquiring the security or currency in this manner may be less than the cost of acquiring the security or currency directly. This technique may also be useful to a Fund in purchasing a large block of securities that would be more difficult to acquire by direct market purchases. So long as it holds such a call option, rather than the underlying security or currency itself, the Fund is partially protected from any unexpected decline in the market price of the underlying security or currency and, in such event, could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option.
A Fund may also purchase call options on underlying securities or currencies it owns to avoid realizing losses that would result in a reduction of its current return. For example, where a Fund has written a call option on an underlying security or currency having a current market value below the price at which it purchased the security or currency, an increase in the market price could result in the exercise of the call option written by the Fund and the realization of a loss on the underlying security or currency. Accordingly, the Fund could purchase a call option on the same underlying security or currency, which could be exercised to fulfill the Fund's delivery obligations under its written call (if it is exercised). This strategy could allow the Fund to avoid selling the portfolio security or currency at a time when it has an unrealized loss; however, the Fund would have to pay a premium to purchase the call option plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of each Fund's total assets at the time of each purchase.
A Fund may attempt to accomplish objectives similar to those involved in using Forward Contracts, by purchasing put or call options on currencies. A put option gives the Fund as purchaser the right (but not the obligation) to sell a specified amount of currency at the exercise price at any time until (American style) or on (European style) the expiration date of the option. A call option gives the Fund as purchaser the right (but not the obligation) to purchase a specified amount of currency at the
exercise price at any time until (American style) or on (European style) the expiration date of the option. A Fund might purchase a currency put option, for example, to protect itself against a decline in the dollar value of a currency in which it holds or anticipates holding securities. If the currency's value should decline against the dollar, the loss in currency value should be offset, in whole or in part, by an increase in the value of the put. If the value of the currency instead should rise against the dollar, any gain to a Fund would be reduced by the premium it had paid for the put option. A currency call option might be purchased, for example, in anticipation of, or to protect against, a rise in the value against the dollar of a currency in which a Fund anticipates purchasing securities.
Options may be either listed on an exchange or traded in over-the-counter ("OTC") markets. Listed options are third-party contracts (i.e., performance of the obligations of the purchaser and seller is guaranteed by the exchange or clearing corporation) and have standardized strike prices and expiration dates. OTC options are two-party contracts with negotiated strike prices and expiration dates. A Fund will not purchase an OTC option unless it believes that daily valuations for such options are readily obtainable. OTC options differ from exchange-traded options in that OTC options are transacted with dealers directly and not through a clearing corporation (which guarantees performance). Consequently, there is a risk of non-performance by the dealer. Since no exchange is involved, OTC options are valued on the basis of an average of the last bid prices obtained from dealers, unless a quotation from only one dealer is available, in which case only that dealer's price will be used. In the case of OTC options, there can be no assurance that a liquid secondary market will exist for any particular option at any specific time.
The staff of the SEC considers purchased OTC options to be illiquid securities. A Fund may also sell OTC options and, in connection therewith, segregate assets or cover its obligations with respect to OTC options written by the Fund. The assets used as cover for OTC options written by a Fund will be considered illiquid unless the OTC options are sold to qualified dealers who agree that the Fund may repurchase any OTC option it writes at a maximum price to be calculated by a formula set forth in the option agreement. The cover for an OTC option written subject to this procedure would be considered illiquid only to the extent that the maximum repurchase price under the formula exceeds the intrinsic value of the option.
A Fund's ability to establish and close out positions in exchange-listed options depends on the existence of a liquid market. A Fund intends to purchase or write only those exchange-traded options for which there appears to be a liquid secondary market. However, there can be no assurance that such a market will exist at any particular time. Closing transactions can be made for OTC options only by negotiating directly with the contra party or by a transaction in the secondary market if any such market exists. Although a Fund will enter into OTC options only with contra parties that are expected to be capable of entering into closing transactions with the Fund, there is no assurance that the Fund will in fact be able to close out an OTC option position at a favorable price prior to expiration. In the event of insolvency of the contra party, the Fund might be unable to close out an OTC option position at any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures contracts except that all settlements are in cash and gain or loss depends on changes in the index in question (and thus on price movements in the securities market or a particular market sector generally) rather than on price movements in individual securities or futures contracts. When a Fund writes a call on an index, it receives a premium and agrees that, prior to the expiration date, the purchaser of the call, upon exercise of the call, will receive from the Fund an amount of cash if the closing level of the index upon which the call is based is greater than the exercise price of the call. The amount of cash is equal to the difference between the closing price of the index and the exercise price of the call times a specified multiple (the "multiplier"), which determines the total dollar value for each point of such difference. When a Fund buys a call on an index, it pays a premium and has the same rights as to such call as are indicated above. When a Fund buys a put on an index, it pays a premium and has the right, prior to the expiration date, to require the seller of the put, upon the Fund's exercise of the put, to deliver to the
Fund an amount of cash if the closing level of the index upon which the put is based is less than the exercise price of the put, which amount of cash is determined by the multiplier, as described above for calls. When the Fund writes a put on an index, it receives a premium and the purchaser has the right, prior to the expiration date, to require the Fund to deliver to it an amount of cash equal to the difference between the closing level of the index and the exercise price times the multiplier, if the closing level is less than the exercise price.
The risks of investment in index options may be greater than options on securities. Because index options are settled in cash, when a Fund writes a call on an index it cannot provide in advance for its potential settlement obligations by acquiring and holding the underlying securities. A Fund can offset some of the risk of writing a call index option position by holding a diversified portfolio of securities similar to those on which the underlying index is based. However, a Fund cannot, as a practical matter, acquire and hold a portfolio containing exactly the same securities as underlie the index and, as a result, bears a risk that the value of the securities held will vary from the value of the index.
Even if a Fund could assemble a securities portfolio that exactly reproduced the composition of the underlying index, it still would not be fully covered from a risk standpoint because of the "timing risk" inherent in writing index options. When an index option is exercised, the amount of cash that the holder is entitled to receive is determined by the difference between the exercise price and the closing index level on the date when the option is exercised. As with other kinds of options, the Fund, as the call writer, will not know that it has been assigned until the next business day at the earliest. The time lag between exercise and notice of assignment poses no risk for the writer of a covered call on a specific underlying security, such as common stock, because there the writer's obligation is to deliver the underlying security, not to pay its value as of a fixed time in the past. So long as the writer already owns the underlying security, it can satisfy its settlement obligations by simply delivering it, and the risk that its value may have declined since the exercise date is borne by the exercising holder. In contrast, even if the writer of an index call holds securities that exactly match the composition of the underlying index, it will not be able to satisfy its assignment obligations by delivering those securities against payment of the exercise price. Instead, it will be required to pay cash in an amount based on the closing index value on the exercise date; and by the time it learns that it has been assigned, the index may have declined, with a corresponding decline in the value of its securities portfolio. This "timing risk" is an inherent limitation on the ability of index call writers to cover their risk exposure by holding securities positions.
If a Fund purchases an index option and exercises it before the closing index value for that day is available, it runs the risk that the level of the underlying index may subsequently change. If such a change causes the exercised option to fall out-of-the-money, the Fund will be required to pay the difference between the closing index value and the exercise price of the option (times the applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
Each Fund may enter into interest rate or currency futures contracts, and may enter into stock index futures contracts (collectively, "Futures" or "Futures Contracts"), as a hedge against changes in prevailing levels of interest rates, currency exchange rates or stock price levels in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by the Fund. A Fund's hedging may include sales of Futures as an offset against the effect of expected increases in interest rates, and decreases in currency exchange rates and stock prices, and purchases of Futures as an offset against the effect of expected declines in interest rates, and increases in currency exchange rates or stock prices.
Each Fund only will enter into Futures Contracts that are traded on futures exchanges and are standardized as to maturity date and underlying financial instrument. Futures exchanges and trading thereon in the United States are regulated under the Commodity Exchange Act by the Commodity
Futures Trading Commission ("CFTC"). Futures are exchanged in London at the London International Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be used to reduce a Fund's exposure to interest rate, currency exchange rate and stock market fluctuations, that Fund may be able to hedge its exposure more effectively and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument (security or currency) for a specified price at a designated date, time and place. A stock index Futures Contract provides for the delivery, at a designated date, time and place, of an amount of cash equal to a specified dollar amount times the difference between the stock index value at the close of trading on the contract and the price at which the Futures Contract is originally struck; no physical delivery of stocks comprising the index is made. Brokerage fees are incurred when a Futures Contract is bought or sold, and margin deposits must be maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for financial instruments or currencies, Futures Contracts usually are closed out before the delivery date. Closing out an open Futures Contract sale or purchase is effected by entering into an offsetting Futures Contract purchase or sale, respectively, for the same aggregate amount of the identical financial instrument or currency and the same delivery date. If the offsetting purchase price is less than the original sale price, the Fund realizes a gain; if it is more, the Fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. The transaction costs must also be included in these calculations. There can be no assurance, however, that a Fund will be able to enter into an offsetting transaction with respect to a particular Futures Contract at a particular time. If a Fund is not able to enter into an offsetting transaction, that Fund will continue to be required to maintain the margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising from the sale of one Futures Contract of September Deutschemarks on an exchange may be fulfilled at any time before delivery under the Futures Contract is required (i.e., on a specified date in September, the "delivery month") by the purchase of another Futures Contract of September Deutschemarks on the same exchange. In such instance, the difference between the price at which the Futures Contract was sold and the price paid for the offsetting purchase, after allowance for transaction costs, represents the profit or loss to the Fund.
Each Fund's Futures transactions will be entered into for hedging purposes only; that is, Futures Contracts will be sold to protect against a decline in the price of securities or currencies that a Fund owns, or Futures Contracts will be purchased to protect a Fund against an increase in the price of securities or currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be deposited by a Fund in order to initiate Futures trading and maintain the Fund's open positions in Futures Contracts. A margin deposit made when the Futures Contract is entered into ("initial margin") is intended to ensure the Fund's performance under the Futures Contract. The margin required for a particular Futures Contract is set by the exchange on which the Futures Contract is traded and may be significantly modified from time to time by the exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures commission merchant through which the Fund entered into the Futures Contract will be made on a daily basis as the price of the underlying security, currency or index fluctuates making the Futures Contract more or less valuable, a process known as marking-to-market.
Risks of Using Futures Contracts. The prices of Futures Contracts are volatile and are influenced by, among other things, actual and anticipated changes in interest rates and currency exchange rates, and in stock market movements, which in turn are affected by fiscal and monetary policies and national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures Contracts and prices of the securities or currencies in a Fund's portfolio being hedged. The degree of imperfection of correlation depends upon circumstances such as variations in speculative market demand for Futures and for securities or currencies, including technical influences in Futures trading; and differences between the financial instruments being hedged and the instruments underlying the standard Futures Contracts available for trading. A decision of whether, when and how to hedge involves skill and judgment, and even a well-conceived hedge may be unsuccessful to some degree because of unexpected market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an extremely high degree of leverage. As a result, a relatively small price movement in a Futures Contract may result in immediate and substantial loss, as well as gain, to the investor. For example, if at the time of purchase, 10% of the value of the Futures Contract is deposited as margin, a subsequent 10% decrease in the value of the Futures Contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, if the Futures Contract were closed out. Thus, a purchase or sale of a Futures Contract may result in losses in excess of the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures Contract and options on Futures Contracts prices during a single trading day. The daily limit establishes the maximum amount that the price of a Futures Contract or option may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of Futures Contract or option, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures Contract and option prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some traders to substantial losses.
If a Fund were unable to liquidate a Futures or option on Futures position due to the absence of a liquid secondary market or the imposition of price limits, it could incur substantial losses. The Fund would continue to be subject to market risk with respect to the position. In addition, except in the case of purchased options, the Fund would continue to be required to make daily variation margin payments and might be required to maintain the position being hedged by the Future or option or to maintain cash or securities in a segregated account.
Certain characteristics of the Futures market might increase the risk that movements in the prices of Futures Contracts or options on Futures might not correlate perfectly with movements in the prices of the investments being hedged. For example, all participants in the Futures and options on Futures markets are subject to daily variation margin calls and might be compelled to liquidate Futures or options on Futures positions whose prices are moving unfavorably to avoid being subject to further calls. These liquidations could increase price volatility of the instruments and distort the normal price relationship between the Futures or options and the investments being hedged. Also, because initial margin deposit requirements in the Futures market are less onerous than margin requirements in the securities markets, there might be increased participation by speculators in the Futures markets. This participation also might cause temporary price distortions. In addition, activities of large traders in both the Futures and securities markets involving arbitrage, "program trading" and other investment strategies might result in temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies except that options on Futures Contracts give the purchaser the right, in return for the premium paid, to assume a position in a Futures Contract (a long position if the option is a call and a short position if the option is a put) at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the Futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's Futures margin account, which represents the amount by which the market price of the Futures Contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the Futures Contract. If an option is exercised on the last trading day prior to the expiration date of the option, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the securities, currencies or index upon which the Futures Contract is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the purchase of put options on Futures can serve as a short hedge. Writing call options on Futures can serve as a limited short hedge, and writing put options on Futures can serve as a limited long hedge, using a strategy similar to that used for writing options on securities, foreign currencies or indices.
If a Fund writes an option on a Futures Contract, it will be required to deposit initial and variation margin pursuant to requirements similar to those applicable to Futures Contracts. Premiums received from the writing of an option on a Futures Contract are included in the initial margin deposit.
A Fund may seek to close out an option position by selling an option covering the same Futures Contract and having the same exercise price and expiration date. The ability to establish and close out positions on such options is subject to the maintenance of a liquid secondary market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON CURRENCIES
To the extent that a Fund enters into Futures Contracts, options on Futures Contracts, and options on foreign currencies traded on a CFTC-regulated exchange, in each case other than for bona fide hedging purposes (as defined by the CFTC), the aggregate initial margin and premiums required to establish those positions (excluding the amount by which options are "in-the-money") will not exceed 5% of the total assets of the Fund, after taking into account unrealized profits and unrealized losses on any contracts the Fund has entered into. In general, a call option on a Futures Contract is "in-the-money" if the value of the underlying Futures Contract exceeds the strike, i.e., exercise, price of the call; a put option on a Futures Contract is "in-the-money" if the value of the underlying Futures Contract is exceeded by the strike price of the put. This guideline may be modified by the Trust's Board of Trustees without a shareholder vote. This limitation does not limit the percentage of a Fund's assets at risk to 5%.
FORWARD CONTRACTS
A Forward Contract is an obligation, usually arranged with a commercial bank or other currency dealer, to purchase or sell a currency against another currency at a future date and price as agreed upon by the parties. A Fund either may accept or make delivery of the currency at the maturity of the Forward Contract. A Fund may also, if its contra party agrees prior to maturity, enter into a closing transaction involving the purchase or sale of an offsetting contract.
A Fund engages in forward currency transactions in anticipation of, or to protect itself against, fluctuations in exchange rates. A Fund might sell a particular foreign currency forward, for example, when it holds bonds denominated in a foreign currency but anticipates, and seeks to be protected against, a decline in the currency against the U.S. dollar. Similarly, a Fund might sell the U.S. dollar
forward when it holds bonds denominated in U.S. dollars but anticipates, and seeks to be protected against, a decline in the U.S. dollar relative to other currencies. Further, a Fund might purchase a currency forward to "lock in" the price of securities denominated in that currency that it anticipates purchasing.
Forward Contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A Forward Contract generally has no deposit requirement, and no commissions are charged at any stage for trades. Each Fund will enter into such Forward Contracts with major U.S. or foreign banks and securities or currency dealers in accordance with guidelines approved by the Trust's Board of Trustees, as applicable.
A Fund may enter into Forward Contracts either with respect to specific transactions or with respect to overall investments of that Fund. The precise matching of the Forward Contract amounts and the value of specific securities generally will not be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date the Forward Contract is entered into and the date it matures. Accordingly, it may be necessary for that Fund to purchase additional foreign currency on the spot (i.e., cash) market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency the Fund is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency the Fund is obligated to deliver. The projection of short-term currency market movements is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Forward Contracts involve the risk that anticipated currency movements will not be predicted accurately, causing a Fund to sustain losses on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring a Fund to sell a currency, that Fund either may sell a security and use the sale proceeds to make delivery of the currency or retain the security and offset its contractual obligation to deliver the currency by purchasing a second contract pursuant to which the Fund will obtain, on the same maturity date, the same amount of the currency that it is obligated to deliver. Similarly, a Fund may close out a Forward Contract requiring it to purchase a specified currency by entering into a second contract, if its contra party agrees, entitling it to sell the same amount of the same currency on the maturity date of the first contract. A Fund would realize a gain or loss as a result of entering into such an offsetting Forward Contract under either circumstance to the extent the exchange rate or rates between the currencies involved moved between the execution dates of the first contract and the offsetting contract.
The cost to a Fund of engaging in Forward Contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because Forward Contracts are usually entered into on a principal basis, no fees or commissions are involved. The use of Forward Contracts does not eliminate fluctuations in the prices of the underlying securities a Fund owns or intends to acquire, but it does establish a rate of exchange in advance. In addition, while Forward Contract sales limit the risk of loss due to a decline in the value of the hedged currencies, they also limit any potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES--SPECIAL CONSIDERATIONS
A Fund may use options on foreign currencies, Futures on foreign currencies, options on Futures on foreign currencies and Forward Contracts to hedge against movements in the values of the foreign currencies in which the Fund's securities are denominated. Such currency hedges can protect against price movements in a security that the Fund owns or intends to acquire that are attributable to changes in the value of the currency in which it is denominated. Such hedges do not, however, protect against price movements in the securities that are attributable to other causes.
A Fund might seek to hedge against changes in the value of a particular currency when no Futures Contract, Forward Contract or option involving that currency is available or one of such contracts is more expensive than certain other contracts. In such cases, the Fund may hedge against price movements in that currency by entering into a contract on another currency or basket of currencies, the values of which the Advisor believes will have a positive correlation to the value of the currency being hedged. The risk that movements in the price of the contract will not correlate perfectly with movements in the price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts and options on foreign currencies depends on the value of the underlying currency relative to the U.S. dollar. Because foreign currency transactions occurring in the interbank market might involve substantially larger amounts than those involved in the use of Futures Contracts, Forward Contracts or options, the Fund could be disadvantaged by dealing in the odd lot market (generally consisting of transactions of less than $1 million) for the underlying foreign currencies at prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign currencies or any regulatory requirements that quotations available through dealers or other market sources be firm or revised on a timely basis. Quotation information generally is representative of very large transactions in the interbank market and thus might not reflect odd-lot transactions where rates might be less favorable. The interbank market in foreign currencies is a global, round-the-clock market. To the extent the U.S. options or Futures markets are closed while the markets for the underlying currencies remain open, significant price and rate movements might take place in the underlying markets that cannot be reflected in the markets for the Futures contracts or options until they reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign currencies might be required to take place within the country issuing the underlying currency. Thus, the Fund might be required to accept or make delivery of the underlying foreign currency in accordance with any U.S. or foreign regulations regarding the maintenance of foreign banking arrangements by U.S. residents and might be required to pay any fees, taxes and charges associated with such delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than options purchased by a Fund) expose the Fund to an obligation to another party. A Fund will not enter into any such transactions unless it owns either (1) an offsetting ("covered") position in securities, currencies, or other options, Forward Contracts or Futures Contracts, or (2) cash, receivables and short-term debt securities with a value sufficient at all times to cover its potential obligations not covered as provided in (1) above. Each Fund will comply with SEC guidelines regarding cover for these instruments and, if the guidelines so require, set aside cash or liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the position in the corresponding Forward Contract, Futures Contract or option is open, unless they are replaced with other appropriate assets. If a large portion of a Fund's assets is used for cover or otherwise set aside, it could affect portfolio management or the Fund's ability to meet redemption requests or other current obligations.
RISK FACTORS
GENERAL
Equity securities, particularly common stocks, generally represent the most junior position in an issuer's capital structure, and entitle holders to an interest in the assets of the issuer, if any, remaining after all more senior claims have been satisfied. The value of equity securities held by a Fund will fluctuate in response to general market and economic developments, as well as developments affecting the particular issuers of such securities. The value of debt securities held by a Fund generally will fluctuate with changes in the perceived creditworthiness of the issuers of such securities and interest rates.
BIOTECH FUND
Companies in the biotechnology industry generally are subject to substantial government regulation. Changes in government policy or regulation may impact demand for products and services offered by biotechnology companies and therefore could affect the performance of the Fund. For example, regulatory approvals are generally required before new drugs or medical devices or procedures may be introduced and before the acquisition of additional facilities by health care providers. In addition, the products and services offered by such biotechnology companies may be subject to rapid obsolescence caused by scientific advances and rapidly changing technology. Biotechnology companies may also be negatively impacted by intense competition, litigation issues, patent considerations and rapid technological change. Many biotechnology companies are smaller companies that may have limited product lines and financial and managerial resources, making them vulnerable to isolated business setbacks.
Biotechnology firms also face the challenges of producing operating profits to attract investors, a history of operating losses and anticipation of future losses; obtaining domestic and/or foreign approval for products, which may require large amounts of time and money, and receiving FDA approval. The FDA may delay approval, or deny approval and deem the product unsafe. The FDA may also deem data from preclinical testing unfavorable as compared to clinical trials, may not approve manufacturing processes, may change approval policies or adopt new regulations that delay products. Also, a product or products may not be approved for all indications requested which may limit markets.
Clinical trials are expensive, with uncertain outcomes. Companies in collaborative relationships may fail to perform. There may not be market acceptance for developed products. If there are foreign operations, there may be difficulties in managing, fluctuations in currencies or controls, and unexpected changes in trade policies and regulations.
The ability to protect intellectual property and defend against related lawsuits could harm the company's competitive positions. The ability to raise additional funds for acquisitions or fund products is not insured and depends on market conditions. Companies are subject to stress in maintaining key personnel and is subject to environmental compliance risks. This industry is characterized by intense competition and rapid technological change, which may limit commercial opportunities and render products obsolete and reduce sales. If product lawsuits are entered, legal costs may prove to be substantial.
Biotechnology stocks may behave in a volatile manner due to:
announcements by firms and their competitors, fluctuations in operating
products, sales reports, failure to meet earnings expectations, general
conditions in the pharmaceutical and biotech industries or worldwide economy,
announcements of innovations, new products, or enhancements by one company or
competitors, intellectual rights or litigation, and developments with customers, suppliers and/or collaborators.
ENERGY FUND
Energy Fund invests in companies that engage in the exploration, development, and distribution of coal, oil and gas in the United States. These companies are subject to significant federal and state regulation, which may affect rates of return on such investments and the kinds of services that may be offered. In addition, many energy sector companies historically have been subject to significant costs associated with compliance with environmental and other safety regulations. Governmental regulation may also hamper the development of new technologies. These companies could also be affected by foreign countries' oil production policies, social and political unrest in oil-producing nations, global weather trends and U.S. taxes on petroleum-based products.
Further, competition is intense for many energy sector companies. As a result, many of these companies may be adversely affected in the future and the value of the securities issued by such companies may be subject to increased price volatility. Such companies may also be subject to irregular fluctuations in earnings due to changes in the availability of money, the level of interest rates, and other factors.
The value of securities of energy sector companies will fluctuate in
response to market conditions for the particular products or services with which
the issuers are involved. The price of [energy sources] [commodities] will
fluctuate due to changes in worldwide levels of inventory, and changes,
perceived or actual, in production and consumption. In addition, the value of
[energy sources] [commodities] may fluctuate directly with respect to various
stages of the inflationary cycle and perceived inflationary trends and are
subject to numerous factors, including national and international politics.
FINANCIAL SERVICES FUND
Companies in the financial services sector are subject to rapid business changes, significant competition, value fluctuations due to the concentration of loans in particular industries significantly affected by economic conditions (such as real estate or energy), and volatile performance dependent upon the availability and cost of capital and prevailing interest rates. In addition, general economic conditions significantly affect these companies. Credit and other losses resulting from the financial difficulty of borrowers or other third parties potentially may have an adverse effect on companies in these industries. Foreign banks, particularly those of Japan, have reported financial difficulties attributed to increased competition, regulatory changes, and general economic difficulties.
The financial services area in the United States currently is changing relatively rapidly as existing distinctions between various financial service segments become less clear. For instance, recent business combinations have included insurance, finance, and securities brokerage under single ownership. Some primarily retail corporations have expanded into securities and insurance fields. Investment banking, securities brokerage, and investment advisory companies are subject to government regulation and risk due to securities trading and underwriting activities.
Many of the investment considerations discussed in connection with banks, savings institutions and loan associations, and finance companies also apply to insurance companies. The performance of insurance company investments will be subject to risk from several factors. The earnings of insurance companies will be affected by interest rates, pricing (including severe pricing competition from time to time), claims activity, marketing competition and general economic conditions. Particular insurance lines also will be influenced by specific matters. Property and casualty insurance profits may be affected by certain weather catastrophes and other disasters. Life and health insurers' profits may be affected by mortality and morbidity rates. Individual companies may be exposed to material risks, including reserve
inadequacy, problems in investment portfolios (due to real estate or "junk" bond holdings, for example), and the inability to collect from reinsurance carriers. Insurance companies are subject to extensive governmental regulation, including the imposition of maximum rate levels, which may not be adequate for some lines of business. Proposed or potential anti-trust or tax law changes also may affect adversely insurance companies' policy sales, tax obligations, and profitability.
HEALTH CARE FUND
Health care industries generally are subject to substantial governmental regulation. Changes in governmental policy or regulation could have a material effect on the demand for products and services offered by companies in the health care industries and therefore could affect the performance of the Fund. Regulatory approvals are generally required before new drugs and medical devices or procedures may be introduced and before the acquisition of additional facilities by health care providers. In addition, the products and services offered by such companies may be subject to rapid obsolescence caused by technological and scientific advances.
INFRASTRUCTURE FUND
The nature of regulation of infrastructure industries continues to evolve in both the United States and foreign countries, and changes in governmental policy and the need for regulatory approvals may have a material effect on the products and services offered by companies in the infrastructure industries. Electric, gas, water, and most telecommunications companies in the United States, for example, are subject to both federal and state regulation affecting permitted rates of return and the kinds of services that may be offered. Government regulation may also hamper the development of new technologies. Adverse regulatory developments could therefore potentially affect the performance of Infrastructure Fund.
In addition, many infrastructure companies have historically been subject to the risks attendant to increases in fuel and other operating costs, high interest costs on borrowed funds, costs associated with compliance with environmental, and other safety regulations and changes in the regulatory climate. Changes in prevailing interest rates may also affect the Infrastructure Fund's share values because prices of equity and debt securities of infrastructure companies tend to increase when interest rates decline and decrease when interest rates rise. Further, competition is intense for many infrastructure companies. As a result, many of these companies may be adversely affected in the future and such companies may be subject to increased share price volatility. In addition, many companies have diversified into oil and gas exploration and development, and therefore returns may be more sensitive to energy prices.
Some infrastructure companies, such as water supply companies, operate in highly fragmented market sectors due to local ownership. In addition, some of these companies are mature and experience little or no growth. Either of these factors could have a material effect on infrastructure companies and could therefore affect the performance of Infrastructure Fund.
TELECOMMUNICATIONS AND TECHNOLOGY FUND
Telecommunications and technology industries may be subject to greater governmental regulation than many other industries and changes in governmental policy and the need for regulatory approvals may have a material effect on the products and services offered by companies in the telecommunications and technology industries generally. Telephone operating companies in the United States, for example, are subject to both federal and state regulation affecting permitted rates of return and the kinds of services that may be offered. In addition, certain types of companies in the telecommunications and technology industries are engaged in fierce competition for market share that could result in increased share price volatility. This fierce competition, limited products, narrow business platforms and small markets could also result in the risk of technological obsolescence.
LOWER QUALITY DEBT SECURITIES
The Energy Fund and Infrastructure Fund may invest up to 20%, and Health Care Fund, Telecommunications and Technology Fund, and Financial Services Fund may invest up to 5%, of their respective total assets in below investment grade debt securities, that is, rated below BBB by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of equivalent quality in the judgment of the Advisor. Such investments involve a high degree of risk. However, such Funds will not invest in debt securities that are in default as to payment of principal and interest.
Debt rated Baa by Moody's is considered by Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as predominately speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. While such lower quality debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not in default as to principal or interest, and such issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Lower quality debt securities are also generally considered to be subject to greater risk than securities with higher ratings with regard to a deterioration of general economic conditions. These lower quality debt securities are the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
Ratings of debt securities represent the rating agency's opinion regarding their quality and are not a guarantee of quality. Rating agencies attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. Also, rating agencies may fail to make timely changes in credit ratings in response to subsequent events, so that an issuer's current financial condition may be better or worse than a rating indicates.
The market values of lower quality debt securities tend to reflect individual developments of the issuer to a greater extent than do higher quality securities, which react primarily to fluctuations in the general level of interest rates. In addition, lower quality debt securities tend to be more sensitive to economic conditions and generally have more volatile prices than higher quality securities. Issuers of lower quality securities are often highly leveraged and may not have available to them more traditional methods of financing. For example, during an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of lower quality securities may experience financial stress. During such periods, such issuers may not have sufficient revenues to meet their interest payment obligations. The issuer's ability to service its debt obligations may also be adversely affected by specific developments affecting the issuer, such as the issuer's inability to meet specific projected business forecasts or the unavailability of additional financing. The risk of loss due to default by the issuer is significantly greater for the holders of lower quality securities because such securities are generally unsecured and may be subordinated to the claims of other creditors of the issuer.
Lower quality debt securities of corporate issuers frequently have call or buy-back features which would permit an issuer to call or repurchase that security from a Fund. If an issuer exercises these provisions in a declining interest rate market, the Fund may have to replace the security with a lower yielding security, resulting in a decreased return for investors. In addition, the Fund may have difficulty disposing of lower quality securities because they may have a thin trading market. There may be no established retail secondary market for many of these securities, and the Fund anticipates that such securities could be sold only to a limited number of dealers or institutional investors. The lack of a liquid secondary market also may have an adverse impact on market prices of such instruments and may make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its investments. The Fund may also acquire lower quality debt securities during an initial underwriting or which are sold without registration under applicable securities laws. Such securities involve special considerations and risks.
In addition to the foregoing, factors that could have an adverse
effect on the market value of lower quality debt securities in which the Funds
(except Biotech Fund) may invest include: (i) potential adverse publicity; (ii)
heightened sensitivity to general economic or political conditions, and (iii)
the likely adverse impact of a major economic recession. The Fund may also incur
additional expenses to the extent it is required to seek recovery upon a default
in the payment of principal or interest on portfolio holdings, and the Fund may
have limited legal recourse in the event of a default.
INVESTING IN SMALLER COMPANIES
While a Fund's holdings normally will include securities of established suppliers of traditional products and services, a Fund may invest in smaller companies which can benefit from the development of new products and services. These smaller companies may present greater opportunities for capital appreciation, but may also involve greater risks than large, established issuers. Such smaller companies may have limited product lines, markets or financial resources, and their securities may trade less frequently and in more limited volume than the securities of larger, more established companies. As a result, the prices of the securities of such smaller companies may fluctuate to a greater degree than the prices of the securities of other issuers.
ILLIQUID SECURITIES
Each Fund may invest up to 15% of its net assets in illiquid securities. Securities may be considered illiquid if a Fund cannot reasonably expect within seven days to sell the securities for approximately the amount at which that Fund values such securities. See "Investment Restrictions." The sale of illiquid securities, if they can be sold at all, generally will require more time and result in higher brokerage charges or dealer discounts and other selling expenses than will the sale of liquid securities such as securities eligible for trading on U.S. securities exchanges or in OTC markets. Moreover, restricted securities, which may be illiquid for purposes of this limitation, often sell, if at all, at a price lower than similar securities that are not subject to restrictions on resale.
Illiquid securities include those that are subject to restrictions contained in the securities laws of other countries. However, securities that are freely marketable in the country where they are principally traded, but would not be freely marketable in the United States, will not be considered illiquid. Where registration is required, a Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than prevailed when it decided to sell.
The Advisor believes that carefully selected investments in joint ventures, cooperatives, partnerships and state enterprises which are illiquid (collectively, "Special Situations") could enable the Fund to achieve capital appreciation substantially exceeding the appreciation the Fund would realize if they did not make such investments. However, in order to attempt to limit investment risk, the Fund will invest no more than 5% of its total assets in Special Situations.
Not all restricted securities are illiquid. In recent years a large institutional market has developed for certain securities that are not registered under the Securities Act of 1933, as amended ("1933 Act"), including private placements, repurchase agreements, commercial paper, foreign securities and corporate bonds and notes. These instruments are often restricted securities because the securities are sold in transactions not requiring registration. Institutional investors generally will not seek to sell these instruments to the general public, but instead will often depend either on an efficient institutional market in which such unregistered securities can be readily resold or on an issuer's ability to honor a demand for repayment. Therefore, the fact that there are contractual or legal restrictions on resale to the general public or certain institutions is not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration requirements of the 1933 Act for resales of certain securities to qualified institutional buyers. Institutional markets for restricted securities have developed as a result of Rule 144A, providing both readily ascertainable values for restricted securities and the ability to liquidate an investment to satisfy share redemption orders. Such markets include automated systems for the trading, clearance and settlement of unregistered securities of domestic and foreign issuers, such as the PORTAL System sponsored by the National Association of Securities Dealers, Inc. An insufficient number of qualified institutional buyers interested in purchasing Rule 144A-eligible restricted securities held by a Fund, however, could affect adversely the marketability of such portfolio securities and the Fund might be unable to dispose of such securities promptly or at favorable prices.
With respect to liquidity determinations generally, the Trust's Board of Trustees, as applicable, has the ultimate responsibility for determining whether specific securities, including restricted securities pursuant to Rule 144A under the 1933 Act, are liquid or illiquid. The Board has delegated the function of making day-to-day determinations of liquidity to the Advisor, in accordance with procedures approved by the Board. The Advisor takes into account a number of factors in reaching liquidity decisions, including, but not limited to, (i) the frequency of trading in the security; (ii) the number of dealers that make quotes for the security; (iii) the number of dealers that have undertaken to make a market in the security; (iv) the number of other potential purchasers; and (v) the nature of the security and how trading is effected (e.g., the time needed to sell the security, how offers are solicited and the mechanics of transfer). The Advisor monitors the liquidity of securities held by each Fund and periodically reports such determinations to the Trust's Board of Trustees, as applicable. If the liquidity percentage restriction of a Fund is satisfied at the time of investment, a later increase in the percentage of illiquid securities held by the Fund resulting from a change in market value or assets will not constitute a violation of that restriction. If as a result of a change in market value or assets, the percentage of illiquid securities held by the Fund increases above the applicable limit, the Advisor will take appropriate steps to bring the aggregate amount of illiquid assets back within the prescribed limitations as soon as reasonably practicable, taking into account the effect of any disposition on the Fund.
FOREIGN SECURITIES
Political, Social and Economic Risks. Individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, rate of savings and capital reinvestment, resource self sufficiency and balance of payments positions. Investing in securities of non-U.S. companies may entail additional risks due to the potential political, social and economic instability of certain countries and the risks of expropriation, nationalization, confiscation or the imposition of restrictions on foreign investment convertibility of currencies into U.S. dollars and on repatriation of capital invested. In the event of such expropriation, nationalization, confiscatory taxation or other confiscation by any country, a Fund could lose its entire investment in any such country. In addition, governmental regulation in certain foreign countries may impose interest rate controls, credit controls, and price controls. These factors could have a material effect on foreign companies and could therefore affect the performance of the Funds.
Religious, Political and Ethnic Instability. Certain countries in which a Fund may invest may have groups that advocate radical religious or revolutionary philosophies or support ethnic independence. Any disturbance on the part of such individuals could carry the potential for widespread destruction or confiscation of property owned by individuals and entities foreign to such country and could cause the loss of a Fund's investment in those countries. Instability may also result from, among other things: (i) authoritarian governments or military involvement in political and economic decision-making, including changes in government through extra-constitutional means; (ii) popular unrest associated with demands for improved political, economic and social conditions; and (iii) hostile relations with neighboring or other countries. Such political, social and economic instability could disrupt the principal financial markets in which a Fund invests and adversely affect the value of a Fund's assets.
Foreign Investment Restrictions. Certain countries prohibit or impose substantial restrictions on investments in their capital markets, particularly their equity markets, by foreign entities such as a Fund. These restrictions or controls may at times limit or preclude investment in certain securities and may increase the cost and expenses of a Fund. For example, certain countries require prior governmental approval before investments by foreign persons may be made, or may limit the amount of investment by foreign persons in a particular company or limit the investment by foreign persons to only a specific class of securities of a company that may have less advantageous terms than securities of the company available for purchase by nationals. Moreover, the national policies of certain countries may restrict investment opportunities in issuers or industries deemed sensitive to national interests. In addition, some countries require governmental approval for the repatriation of investment income, capital or the proceeds of securities sales by foreign investors. In addition, if there is a deterioration in a country's balance of payments or for other reasons, a country may impose restrictions on foreign capital remittances abroad. A Fund could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation, as well as by the application to it of other restrictions on investments.
Non-Uniform Corporate Disclosure Standards and Governmental Regulation. Foreign companies are subject to accounting, auditing and financial standards and requirements that differ, in some cases significantly, from those applicable to U.S. companies. In particular, the assets, liabilities and profits appearing on the financial statements of such a company may not reflect its financial position or results of operations in the way they would be reflected had such financial statements been prepared in accordance with U.S. generally accepted accounting principles. Most of the foreign securities held by a Fund will not be registered with the SEC or regulators of any foreign country, nor will the issuers thereof be subject to the SEC's reporting requirements. Thus, there will be less available information concerning most foreign issuers of securities held by a Fund than is available concerning U.S. issuers. In instances where the financial statements of an issuer are not deemed to reflect accurately the financial situation of the issuer, the Advisor will take appropriate steps to evaluate the proposed investment, which may include on-site inspection of the issuer, interviews with its management and consultations with accountants, bankers and other specialists. There is substantially less publicly available information about foreign companies than there are reports and ratings published about U.S. companies and the U.S. government. In addition, where public information is available, it may be less reliable than such information regarding U.S. issuers. Issuers of securities in foreign jurisdictions are generally not subject to the same degree of regulation as are U.S. issuers with respect to such matters as restrictions on market manipulation, insider trading rules, shareholder proxy requirements and timely disclosure of information.
Currency Fluctuations. Because each Fund, under normal circumstances, will invest a substantial portion of its total assets in the securities of foreign issuers which are denominated in foreign currencies, the strength or weakness of the U.S. dollar against such foreign currencies will account for part of a Fund's investment performance. A decline in the value of any particular currency against the U.S. dollar will cause a decline in the U.S. dollar value of that Fund's holdings of securities and cash denominated in such currency and, therefore, will cause an overall decline in the appropriate Fund's net asset value and any net investment income and capital gains derived from such securities to be distributed in U.S. dollars to shareholders of that Fund. Moreover, if the value of the foreign currencies in which a Fund receives its income falls relative to the U.S. dollar between receipt of the income and the making of Fund distributions, the Fund may be required to liquidate securities in order to make distributions if the Fund has insufficient cash in U.S. dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined by several factors, including the supply and demand for particular currencies, central bank efforts to support particular currencies, the relative movement of interest rates and the pace of business activity in the other countries and the United States, and other economic and financial conditions affecting the world economy.
On January 1, 1999, certain members of the European Economic and Monetary Union ("EMU"), namely Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, and Spain established a common European currency known as the "euro" and each member's local currency became a denomination of the euro. It is anticipated that each participating country will replace its local currency with the euro on July 1, 2002. On January 2, 2001, Greece became a member of the EMU. The anticipated replacement of existing currencies with the euro on July 1, 2002 could cause market disruptions before or after July 1, 2002 and could adversely affect the value of securities held by a Fund.
Although each Fund values its assets daily in terms of U.S. dollars, the portfolios do not intend to convert their holdings of foreign currencies into U.S. dollars on a daily basis. Each portfolio will do so, from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference ("spread") between the prices at which they buy and sell various currencies. Thus, a dealer may offer to sell a foreign currency to a portfolio at one rate, while offering a lesser rate of exchange should a portfolio desire to sell that currency to the dealer.
Adverse Market Characteristics. Securities of many foreign issuers may be less liquid and their prices more volatile than securities of comparable U.S. issuers. In addition, foreign securities markets and brokers generally are subject to less governmental supervision and regulation than in the United States, and foreign securities transactions usually are subject to fixed commissions, which generally are higher than negotiated commissions on U.S. transactions. In addition, foreign securities transactions may be subject to difficulties associated with the settlement of such transactions. Delays in settlement could result in temporary periods when assets of a Fund are uninvested and no return is earned thereon. The inability of a Fund to make intended security purchases due to settlement problems could cause that Fund to miss attractive investment opportunities. Inability to dispose of a portfolio security due to settlement problems either could result in losses to that Fund due to subsequent declines in value of the portfolio security or, if that Fund has entered into a contract to sell the security, could result in possible liability to the purchaser. The Advisor will consider such difficulties when determining the allocation of a Fund's assets, although the Advisor does not believe that such difficulties will have a material adverse effect on a Fund's portfolio trading activities.
Each Fund may use foreign custodians, which may charge higher custody fees than those attributable to domestic investing and may involve risks in addition to those related to its use of U.S. custodians. Such risks include uncertainties relating to determining and monitoring the foreign custodian's financial strength, reputation and standing; maintaining appropriate safeguards concerning that Fund's investments; and possible difficulties in obtaining and enforcing judgments against such custodians.
Withholding Taxes. Each Fund's net investment income from foreign issuers may be subject to withholding taxes by the foreign issuer's country, thereby reducing that income or delaying the receipt of income when those taxes may be recaptured. See "Dividends, Distributions and Tax Matters."
Concentration. To the extent a Fund invests a significant portion of its assets in securities of issuers located in a particular country or region of the world, such Fund may be subject to greater risks and may experience greater volatility than a fund that is more broadly diversified geographically.
Special Considerations Affecting Western European Countries. The countries that are members of the European Economic Community ("Common Market") (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom) eliminated certain import tariffs and quotas and other trade barriers with respect to one another over the past several years. The Advisor believes that this deregulation should improve the prospects for economic growth in many Western European countries. Among other things, the deregulation could enable companies domiciled in one country to avail themselves of lower labor costs existing in other countries. In addition, this deregulation could benefit companies domiciled in one country by opening additional markets for their goods and services in other countries. Since, however, it is not clear what the exact form or effect of these Common Market reforms will be on business in Western Europe, it is
impossible to predict the long-term impact of the implementation of these programs on the securities owned by a Fund.
Special Considerations Affecting Russia and Eastern European
Countries. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the United States securities markets, and should be considered
highly speculative. Such risks include: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgement; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments crisis on a national scale;
(10) dependency on exports and the corresponding importance of international
trade; (11) the risk that the tax system in these countries will not be reformed
to prevent inconsistent, retroactive and/or exorbitant taxation; and (12) the
underdeveloped nature of the securities markets.
Special Considerations Affecting Japan. Japan's economic growth has declined significantly since 1990. The general government position has deteriorated as a result of weakening economic growth and stimulative measures taken to support economic activity and to restore financial stability. Although the decline in interest rates and fiscal stimulation packages have helped to contain recessionary forces, uncertainties remain. Japan is also heavily dependent upon international trade, so its economy is especially sensitive to trade barriers and disputes. Japan has had difficult relations with its trading partners, particularly the United States, where the trade imbalance is the greatest. It is possible that trade sanctions and other protectionist measures could impact Japan adversely in both the short and the long term.
The common stocks of many Japanese companies trade at high price-earnings ratios. Differences in accounting methods make it difficult to compare the earnings of Japanese companies with those of companies in other countries, especially in the U.S. In general, however, reported net income in Japan is understated relative to U.S. accounting standards and this is one reason why price-earnings ratios of the stocks of Japanese companies have tended historically to be higher than those for U.S. stocks. In addition, Japanese companies have tended to have higher growth rates than U.S. companies and Japanese interest rates have generally been lower than in the U.S., both of which factors tend to result in lower discount rates and higher price-earnings ratios in Japan than in the U.S.
The Japanese securities markets are less regulated than those in the United States. Evidence has emerged from time to time of distortion of market prices to serve political or other purposes. Shareholders' rights are not always equally enforced. In addition, Japan's banking industry is undergoing problems related to bad loans and declining values in real estate.
Special Considerations Affecting Pacific Region Countries. Certain of the risks associated with international investments are heightened for investments in Pacific region countries. For example, some of the currencies of Pacific region countries have experienced steady devaluations relative to the U.S. dollar, and major adjustments have been made periodically in certain of such currencies. Certain countries, such as India, face serious exchange constraints. Jurisdictional disputes also exist between South Korea and North Korea. In addition, the Funds may invest in Hong Kong, which reverted to
Chinese Administration on July 1, 1997. Investments in Hong Kong may be subject to expropriation, national, nationalization or confiscation, in which case a Fund could lose its entire investment in Hong Kong. In addition, the reversion of Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a risk of possible loss of investor confidence in Hong Kong's currency, stock market and assets.
Special Considerations Affecting Latin American Countries. Most Latin American countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had and may continue to have very negative effects on the economies and securities markets of certain Latin American countries. Certain Latin American countries are also among the largest debtors to commercial banks and foreign governments. At times certain Latin American countries have declared moratoria on the payment of principal and/or interest on external debt. In addition, certain Latin American securities markets have experienced high volatility in recent years.
Latin American countries may also close certain sectors of their economies to equity investments by foreigners. Further due to the absence of securities markets and publicly owned corporations and due to restrictions on direct investment by foreign entities, investments may only be made in certain Latin American countries solely or primarily through governmentally approved investment vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained at artificial levels to the U.S. dollar rather than at levels determined by the market. This type of system can lead to sudden and large adjustments in the currency which, in turn, can have a disruptive and negative effect on foreign investors. For example, in late 1994, the value of the Mexican peso lost more than one-third of its value relative to the U.S. dollar.
Special Considerations Affecting Emerging Markets. Investing in the securities of companies in emerging markets may entail special risks relating to potential political and economic instability and the risks of expropriation, nationalization, confiscation or the imposition of restrictions on foreign investment, convertibility of currencies into U.S. dollars and on repatriation of capital invested. In the event of such expropriation, nationalization or other confiscation by any country, a Fund could lose its entire investment in any such country.
Emerging securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The limited size of emerging securities markets and limited trading value in issuers compared to the volume of trading in U.S. securities could cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market size may cause prices to be unduly influenced by traders who control large positions. Adverse publicity and investors' perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets. In addition, securities traded in certain emerging markets may be subject to risks due to the inexperience of financial intermediaries, a lack of modern technology, the lack of a sufficient capital base to expand business operations, and the possibility of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and reliable than in more developed markets. In such emerging securities there may be share registration and delivery delays or failures.
Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates and corresponding currency devaluations have had and may continue to have negative effects on the economies and securities markets of certain emerging market countries.
INVESTMENT RESTRICTIONS
FUNDAMENTAL RESTRICTIONS
Each Fund is subject to the following investment restrictions, which may be changed only by a vote of a majority of such Fund's outstanding shares, except that Biotech Fund is not subject to restriction (1). Fundamental restrictions may be changed only by a vote of a majority of outstanding shares. Any investment restriction that involves a maximum or minimum percentage of securities or assets shall not be considered to be violated unless an excess over or a deficiency under the percentage occurs immediately after, and is caused by, an acquisition or disposition of securities or utilization of assets by the Fund except for borrowing from banks.
(1) The Fund is a "diversified company" as defined in the 1940 Act. The Fund will not purchase the securities of any issuer if, as a result, the Fund would fail to be a diversified company within the meaning of the 1940 Act, and the rules and regulations promulgated thereunder, as such statute, rules, and regulations are amended from time to time or are interpreted from time to time by the SEC staff (collectively, the "1940 Act Laws and Interpretations") or except to the extent that the Fund may be permitted to do so by exemptive order or similar relief (collectively, with the 1940 Act Laws and Interpretations, the "1940 Act Laws, Interpretations and Exemptions"). In complying with this restriction, however, the Fund may purchase securities of other investment companies to the extent permitted by the 1940 Act Laws, Interpretations and Exemptions.
(2) The Fund may not borrow money or issue senior securities, except as permitted by the 1940 Act Laws, Interpretations and Exemptions.
(3) The Fund may not underwrite the securities of other issuers. This restriction does not prevent the Fund from engaging in transactions involving the acquisition, disposition or resale of its portfolio securities, regardless of whether the Fund may be considered to be an underwriter under the Securities Act of 1933.
(4) Biotech Fund will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign issuers in the biotechnology industry.
Energy Fund will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign issuers in the energy sector.
Financial Services Fund will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign financial services companies.
Health Care Fund will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign issuers in the health care industry.
Infrastructure Fund will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign infrastructure companies.
Telecommunications and Technology Fund will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign issuers in the telecommunications and technology industries.
(5) The Fund may not purchase real estate or sell real estate unless acquired as a result of ownership of securities or other instruments. This restriction does not prevent the Fund from investing in issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein.
(6) The Fund may not purchase physical commodities or sell physical commodities unless acquired as a result of ownership of securities or other instruments. This restriction does not prevent the Fund from engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities.
(7) The Fund may not make personal loans or loans of its assets to persons who control or are under the common control with the Fund, except to the extent permitted by 1940 Act Laws, Interpretations and Exemptions. This restriction does not prevent the Fund from, among other things, purchasing debt obligations, entering into repurchase agreements, loaning its assets to broker-dealers or institutional investors, or investing in loans, including assignments and participation interests.
(8) The Fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and restrictions as the Fund.
The investment restrictions set forth above provide each of the Funds with the ability to operate under new interpretations of the 1940 Act or pursuant to exemptive relief from the SEC without receiving prior shareholder approval of the change. Even though each of the Funds have this flexibility, the Board of Trustees has adopted non-fundamental restrictions for each of the Funds relating to certain of these restrictions which the advisor must follow in managing the Funds. Any changes to these non-fundamental restrictions, which are set forth below, require the approval of the Board of Trustees.
NON-FUNDAMENTAL RESTRICTIONS
The following non-fundamental investment restrictions apply to each of the Funds, except Biotech Fund is not subject to restriction (1). They may be changed for any Fund without approval of that Fund's voting securities. Any investment restriction that involves a maximum or minimum percentage of securities or assets (other than with respect to borrowing) shall not be considered to be violated unless an excess over or a deficiency under the percentage occurs immediately after, and is caused by, an acquisition or disposition of securities or utilization of assets by the Fund.
(1) In complying with the fundamental restriction regarding issuer diversification, the Fund will not, with respect to 75% of its total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities), if, as a result, (i) more than 5% of the Fund's total assets would be invested in the securities of that issuer, or (ii) the Fund would hold more than 10% of the outstanding voting securities of that issuer. The Fund may (i) purchase securities of other investment companies as permitted by Section 12(d)(1) of the 1940 Act and (ii) invest its assets in securities of other money market funds and lend money to other investment companies and their series portfolios that have AIM or an affiliate of AIM as an investment advisor (an "AIM Advised Fund"), subject to the terms and conditions of any exemptive orders issued by the SEC.
(2) In complying with the fundamental restriction regarding borrowing money and issuing senior securities, the Fund may borrow money in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). The Fund may borrow from banks, broker-dealers or an AIM Advised Fund. The Fund may not borrow for leveraging, but may borrow for temporary or emergency purposes, in anticipation of or in
response to adverse market conditions, or for cash management purposes. The Fund may not purchase additional securities when any borrowings from banks or any AIM Advised Fund exceed 5% of the Fund's total assets.
(3) For purposes of Biotech Fund's fundamental investment restriction regarding industry concentration, a company will be considered in the biotechnology industry if (1) at least 50% of its gross income or its net sales come from activities in the biotechnology industry; (2) at least 50% of its assets are devoted to producing revenues from the biotechnology industry; (3) based on other available information, AIM determines that its primary business is within the biotechnology industry; or (4) AIM believes it will benefit from developments in the biotechnology industry.
For purposes of the Energy Fund's fundamental investment restriction regarding industry concentration, a company will be considered in the energy sector if (1) at least 50% of its gross income or its net sales come from activities in the energy sector; (2) at least 50% of its assets are devoted to producing revenues from the energy sector; or (3) based on other available information, AIM determines that its primary business is within the energy sector.
For purposes of Financial Services Fund's fundamental investment restriction regarding industry concentration, financial services companies include those that provide, and derive at least 40% of their revenues from, financial services (such as commercial banks, insurance companies, investment management companies, trust companies, savings banks, insurance brokerages, securities brokerages, investment banks, leasing companies, and real estate-related companies).
For purposes of Health Care Fund's fundamental investment restriction regarding industry concentration, a company will be considered a health care company if (1) at least 50% of its gross income or its net sales are derived from activities in the health care industry; (2) at least 50% of its assets are devoted to producing revenues from the health care industry; or (3) based on other available information, AIM determines that its primary business is within the health care industry.
For purposes of Infrastructure Fund's fundamental investment restriction regarding industry concentration, infrastructure companies include those that design, develop, or provide products and services significant to a country's infrastructure, and derive at least 40% of their revenues from these products and services (such as transportation systems, communications equipment and services, nuclear power and other energy sources, water supply, and oil, gas, and coal exploration).
For purposes of Telecommunications and Technology
Fund's fundamental investment restriction regarding industry
concentration, a company will be considered in the telecommunications
industry or the technology industry if (1) at least 50% of its gross
income or its net sales are derived from activities in that industry;
(2) at least 50% of its assets are devoted to producing revenues from
that industry; or (3) based on other available information, AIM
determines that its primary business is within either industry.
(4) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33 1/3% of its total assets and may lend money to an AIM Advised Fund, on such terms and conditions as the SEC may require in an exemptive order.
(5) Notwithstanding the fundamental restriction with regard to investing all assets in an open-end fund, the Fund may not invest all of its assets in the securities of a single open-end management investment company with the same fundamental investment objectives, policies and restrictions as the Fund.
If a percentage restriction on investment or utilization of assets in an investment policy or restriction is adhered to at the time an investment is made, a later change in percentage ownership of a security or kind of securities resulting from changing market values or a similar type of event will not be considered a violation of a Fund's investment policies or restrictions except for borrowings from banks. A Fund may exchange securities, exercise conversion or subscription rights, warrants or other rights to purchase common stock or other equity securities and may hold, except to the extent limited by the 1940 Act, any such securities so acquired without regard to the Fund's investment policies and restrictions. The original cost of the securities so acquired will be included in any subsequent determination of a Fund's compliance with the investment percentage limitations referred to above and in the Prospectus.
PORTFOLIO TRANSACTIONS AND BROKERAGE
GENERAL BROKERAGE POLICY
AIM makes decisions to buy and sell securities for each Fund, selects broker-dealers, effects the Funds' investment portfolio transactions, allocates brokerage fees in such transactions, and where applicable, negotiates commissions and spreads on transactions. AIM's primary consideration in effecting a security transaction is to obtain the most favorable execution of the order, which includes the best price on the security and a low commission rate. While AIM seeks reasonably competitive commission rates, the Funds may not pay the lowest commission or spread available. See "Section 28(e) Standards" below.
Some of the securities in which the Funds invest are traded in over-the-counter markets. Portfolio transactions placed in such markets may be affected at either net prices without commissions, but which include compensation to the broker-dealer in the form of a mark up or mark down, or on an agency basis, which involves the payment of negotiated brokerage commissions.
Traditionally, commission rates have not been negotiated on stock markets outside the United States. Although in recent years many overseas stock markets have adopted a system of negotiated rates, a number of markets maintain an established schedule of minimum commission rates.
AIM may determine target levels of commission business with various brokers on behalf of its clients (including the Funds) over a certain time period. The target levels will be based upon the following factors, among others: (1) the execution services provided by the broker; (2) the research services provided by the broker; and (3) the broker's interest in mutual funds in general and in the Funds and other mutual funds advised by AIM or A I M Capital Management, Inc. ("AIM Capital") (collectively, the "AIM Funds") in particular, including sales of the Funds and of the other AIM Funds. In connection with (3) above, the Funds' trades may be executed directly by dealers that sell shares of the AIM Funds or by other broker-dealers with which such dealers have clearing arrangements. AIM will not use a specific formula in connection with any of these considerations to determine the target levels.
The Funds may engage in certain principal and agency transactions with banks and their affiliates that own 5% or more of the outstanding voting securities of a Fund, provided the conditions of an exemptive order received by the Funds from the SEC are met. In addition, a Fund may purchase or sell a security from or to another AIM Fund or account provided the Funds follow procedures adopted by the Board of Directors/Trustees of the various AIM Funds, including the Trust. These inter-fund transactions do not generate brokerage commissions but may result in custodial fees or taxes or other related expenses.
ALLOCATION OF PORTFOLIO TRANSACTIONS
AIM and its affiliates manage numerous other investment accounts. Some of these accounts may have investment objectives similar to the Funds. Occasionally, identical securities will be appropriate for
investment by one of the Funds and by another Fund or one or more of these investment accounts. However, the position of each account in the same securities and the length of time that each account may hold its investment in the same securities may vary. The timing and amount of purchase by each account will also be determined by its cash position. If the purchase or sale of securities is consistent with the investment policies of the Fund(s) and one or more of these accounts, and is considered at or about the same time, AIM will fairly allocate transactions in such securities among the Fund(s) and these accounts. AIM may combine such transactions, in accordance with applicable laws and regulations, to obtain the most favorable execution. Simultaneous transactions could, however, adversely affect a Fund's ability to obtain or dispose of the full amount of a security which it seeks to purchase or sell.
Sometimes the procedure for allocating portfolio transactions among the various investment accounts advised by AIM results in transactions which could have an adverse effect on the price or amount of securities available to a Fund. In making such allocations, AIM considers the investment objectives and policies of its advisory clients, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment, the size of investment commitments generally held, and the judgments of the persons responsible for recommending the investment. This procedure would apply to transactions in both equity and fixed income securities.
SECTION 28(e) STANDARDS
Section 28(e) of the Securities Exchange Act of 1934 provides that AIM, under certain circumstances, lawfully may cause an account to pay a higher commission than the lowest available. Under Section 28(e), AIM must make a good faith determination that the commissions paid are "reasonable in relation to the value of the brokerage and research services provided ... viewed in terms of either that particular transaction or [AIM's] overall responsibilities with respect to the accounts as to which it exercises investment discretion." The services provided by the broker also must lawfully and appropriately assist AIM in the performance of its investment decision-making responsibilities. Accordingly, in recognition of research services provided to it, a Fund may pay a broker higher commissions than those available from another broker.
Research services received from broker-dealers supplement AIM's own research (and the research of its affiliates), and may include the following types of information: statistical and background information on the U.S. and foreign economies, industry groups and individual companies; forecasts and interpretations with respect to the U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on federal, state, local and foreign political developments; portfolio management strategies; performance information on securities, indexes and investment accounts; information concerning prices of securities; and information supplied by specialized services to AIM and to the Company's directors with respect to the performance, investment activities, and fees and expenses of other mutual funds. Broker-dealers may communicate such information electronically, orally, in written form or on computer software. Research services may also include the providing of custody services, as well as the providing of equipment used to communicate research information, the providing of specialized consultations with AIM personnel with respect to computerized systems and data furnished to AIM as a component of other research services, the arranging of meetings with management of companies, and the providing of access to consultants who supply research information.
The outside research assistance is useful to AIM since the broker-dealers used by AIM tend to follow a broader universe of securities and other matters than AIM's staff can follow. In addition, the research provides AIM with a diverse perspective on financial markets. Research services provided to AIM by broker-dealers are available for the benefit of all accounts managed or advised by AIM or by its affiliates. Some broker-dealers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by AIM's clients, including the Funds. However, the Funds are not under any obligation to deal with any broker-dealer in the execution of transactions in portfolio securities.
In some cases, the research services are available only from the broker-dealer providing them. In other cases, the research services may be obtainable from alternative sources in return for cash payments. AIM believes that the research services are beneficial in supplementing AIM's research and analysis and that they improve the quality of AIM's investment advice. The advisory fee paid by the Funds is not reduced because AIM receives such services. However, to the extent that AIM would have purchased research services had they not been provided by broker-dealers, the expenses to AIM could be considered to have been reduced accordingly.
BROKERAGE COMMISSIONS PAID
For the fiscal years ended October 31, 2000, 1999 and 1998, the Global Financial Services Portfolio paid aggregate brokerage commissions of $183,970, $302,742 and $404,804, respectively.
For the fiscal years ended October 31, 2000, 1999 and 1998, the Health Care Fund paid aggregate brokerage commissions of $3,030,188, $1,680,496 and $1,647,939, respectively.
For the fiscal years ended October 31, 2000, 1999 and 1998, the Global Infrastructure Portfolio paid aggregate brokerage commissions of $51,077, $110,072 and $317,191, respectively.
For the fiscal years ended October 31, 2000, 1999 and 1998, the Global Resources Portfolio paid aggregate brokerage commissions of $139,146, $221,586 and $798,398, respectively.
For the fiscal years ended October 31, 2000, 1999 and 1998, the Telecommunications and Technology Fund paid aggregate brokerage commissions of $2,967,281, $3,353,749 and $2,740,833, respectively.
For the fiscal year ended October 31, 1998, the Health Care Fund paid to LGT Bank in Liechtenstein AG, which was an "affiliated" broker, an aggregate brokerage commission of $23,081, for transactions involving purchases and sales of portfolio securities which represented 2.01% of the total brokerage commissions paid by the Health Care Fund and 1.61% of the aggregate dollar amount of transactions involving payment of commissions by the Health Care Fund.
For fiscal year ended October 31, 1998, the Telecommunications and Technology Fund paid to LGT Bank in Liechtenstein, AG, which was an "affiliated" broker, aggregate brokerage commissions of $22,584 for transactions involving purchases and sales of portfolio securities which represented 1.00% of the total brokerage commissions paid by the Fund and 0.67% of the aggregate dollar amount of transactions involving payment of commissions by the Fund.
ALLOCATION OF EQUITY OFFERING TRANSACTIONS
From time to time, certain of the AIM Funds or other accounts managed by AIM may become interested in participating in equity security distributions that are available in an equity "offering" which AIM defines as an IPO, a secondary (follow-on offering), a private placement, a direct placement or a PIPE (private investment in a public equity). Occasions may arise when purchases of such securities by one AIM Fund or account may also be considered for purchase by one or more other AIM Funds or accounts. In such cases, it shall be AIM's practice to specifically combine or otherwise bunch indications of interest for offerings for all AIM Funds and accounts participating in purchase transactions for that offering, and to allocate such transactions in accordance with the following procedures:
AIM will determine the eligibility of each AIM Fund and account that seeks to participate in a particular offering by reviewing a number of factors, including suitability of the investment with the AIM Fund's or account's investment objective, policies and strategies, the liquidity of the AIM Fund or account if such investment is purchased, and whether the portfolio manager intends to hold the security as a long-term investment. The allocation of limited supply securities issued in offerings will be made to eligible AIM Funds and accounts in a manner designed to be fair and equitable for the eligible AIM Funds and accounts, and so that there is equal allocation of offerings over the longer term. Where multiple funds or accounts are eligible, rotational participation may occur, based on the extent to which an AIM Fund or account has participated in previous offerings as well as the size of the AIM Fund or account. Each eligible AIM Fund and account with an asset level of less than $500 million will be placed in one of three tiers, depending upon each AIM Fund's or account's asset level. The AIM Funds and accounts in the tier containing funds and accounts with the smallest asset levels will participate first, each receiving a 40 basis point allocation (rounded to the nearest share round lot that approximates 40 basis points) (the "Allocation"), based on that AIM Fund's or account's net assets. This process continues until all of the AIM Funds and accounts in the three tiers receive their Allocations, or until the shares are all allocated. Should securities remain after this process, eligible AIM Funds and accounts will receive their Allocations on a straight pro rata basis. For the tier of AIM Funds and accounts not receiving a full Allocation, the Allocation may be made only to certain AIM Funds or accounts so that each may receive close to or exactly 40 basis points.
When any AIM Funds and/or accounts with substantially identical investment objectives and policies participate in offerings, they will do so in amounts that are substantially proportionate to each other. In these cases, the net assets of the largest participating AIM Fund will be used to determine in which tier, as described in the paragraph above, such group of AIM Funds or accounts will be placed. If no AIM Fund is participating, then the net assets of the largest account will be used to determine tier placement. The price per share of securities purchased in such offering transactions will be the same for each AIM Fund and account.
PORTFOLIO TRADING AND TURNOVER
Although each Fund does not intend generally to trade for short-term profits, the securities held by that Fund will be sold whenever management believes it is appropriate to do so, without regard to the length of time a particular security may have been held. Portfolio turnover rate is calculated by dividing the lesser of sales or purchases of portfolio securities by each Fund's average month-end portfolio value, excluding short-term investments. The portfolio turnover rate will not be a limiting factor when management deems portfolio changes appropriate. Higher portfolio turnover (over 100%) involves correspondingly greater brokerage commissions and other transaction costs that the Fund will bear directly, and may result in the realization of net capital gains that are taxable when distributed to each corresponding Fund's shareholders.
The portfolio turnover rates for Financial Services Fund, Health Care Fund, Infrastructure Fund, Energy Fund and Telecommunications and Technology Fund during the last two fiscal years were as follows:
YEAR ENDED YEAR ENDED
OCT. 31, OCT. 31,
2000 1999
---------- ----------
Financial Services Fund........................ 41% 107%
Health Care Fund............................... 242% 123%
Infrastructure Fund............................ 66% 49%
Energy Fund.................................... 105% 123%
Telecommunications and Technology Fund......... 111% 122%
|
Financial Services Fund had lower portfolio turnover than in previous years because the Fund's portfolio managers believed that the Fund was well-positioned in the market and therefore the Fund bought and sold fewer securities.
MANAGEMENT
The Trust's Board of Trustees has overall responsibility for the operation of the Funds. The Trust's Board of Trustees has approved all significant agreements between the Trust on the one side and persons or companies furnishing services to the Fund on the other, including the investment management and administration agreement with AIM, the agreements with AIM Distributors regarding distribution of the Fund's shares, the custody agreement and the transfer agency agreement. The day-to-day operations of the Fund are delegated to the officers of the Trust, subject always to the investment objectives and policies of the Fund and to the general supervision of the Trust's Board of Trustees. Certain trustees and officers of the Trust are affiliated with AIM and AIM Management Group Inc. ("AIM Management"), the parent corporation of AIM.
TRUSTEES AND EXECUTIVE OFFICERS
The Trust's Trustees and Executive Officers and their principal occupations during at least the last five years are listed below. Unless otherwise indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
POSITIONS
HELD WITH
NAME, ADDRESS AND AGE REGISTRANT PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS
--------------------- ---------- --------------------------------------------
*ROBERT H. GRAHAM (54) Trustee, Chairman, President and Chief Executive Officer,
Chairman and A I M Management Group Inc.; Chairman and President,
President A I M Advisors, Inc.; Director and Senior Vice President,
A I M Capital Management, Inc.; Chairman, A I M Distributors,
Inc., A I M Fund Services, Inc. and Fund Management Company;
and Director and Vice Chairman, AMVESCAP PLC (parent of AIM
and a global investment management firm).
FRANK S. BAYLEY (62) Trustee Partner, law firm of Baker & McKenzie; Director and
Two Embarcadero Center Chairman, C.D. Stimson Company (private investment company);
Suite 2400 and Trustee, The Badgley Funds.
San Francisco, CA 94111
BRUCE L. CROCKETT (57) Trustee Director, ACE Limited (insurance company). Formerly,
906 Frome Lane Director, President and Chief Executive Officer, COMSAT
McLean, VA 22102 Corporation; and Chairman, Board of Governors of INTELSAT
(international communications company).
OWEN DALY II (77) Trustee Formerly, Director, Cortland Trust, Inc. (investment
Six Blythewood Road company), CF & I Steel Corp., Monumental Life Insurance
Baltimore, MD 21210 Company and Monumental General Insurance Company; and
Chairman of the Board of Equitable Bancorporation.
ALBERT R. DOWDEN (59) Trustee Chairman of the Board of Directors, Cortland Trust, Inc.
1815 Central Park Drive (investment company) and DHJ Media, Inc.; and Director,
P.O. Box 774000 - PMB #222 Magellan Insurance Company. Formerly, Director, President
Steamboat Springs, CO 80477 and Chief Executive Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo; and Director, The
Hertz Corporation, Genmar Corporation (boat manufacturer),
National Media Corporation and Annuity and Life Re
(Holdings), Ltd.
|
* Mr. Graham is an "interested person" of the Trust and AIM as that term is defined in the 1940 Act.
POSITIONS
HELD WITH
NAME, ADDRESS AND AGE REGISTRANT PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS
--------------------- ---------- --------------------------------------------
EDWARD K. DUNN, JR. (66) Trustee Formerly, Chairman of the Board of Directors, Mercantile
2 Hopkins Plaza Mortgage Corp.; Vice Chairman of the Board of Directors,
8th Floor, Suite 805 President and Chief Operating Officer, Mercantile-Safe
Baltimore, MD 21201 Deposit & Trust Co.; and President, Mercantile Bankshares
Corp.
JACK M. FIELDS (49) Trustee Chief Executive Officer, Twenty First Century Group, Inc.
434 New Jersey Avenue, SE (governmental affairs company). Formerly, Member of the
Washington, DC 20003 U.S. House of Representatives.
**CARL FRISCHLING (64) Trustee Partner, Kramer Levin Naftalis & Frankel LLP
919 Third Avenue (law firm).
New York, NY 10022
PREMA MATHAI-DAVIS (50) Trustee Member, Visiting Committee, Harvard University Graduate
370 East 76th Street School of Education, New School University. Formerly, Chief
New York, NY 10021 Executive Officer, YWCA of the USA; Commissioner, New York
City Department of the Aging; and Commissioner, New York
City Metropolitan Transportation Authority.
LEWIS F. PENNOCK (58) Trustee Partner, Pennock & Cooper (law firm).
6363 Woodway, Suite 825
Houston, TX 77057
RUTH H. QUIGLEY (66) Trustee Private investor; and President, Quigley Friedlander & Co.,
1055 California Street Inc. (financial advisory services firm) from 1984 to 1986.
San Francisco, CA 94108
LOUIS S. SKLAR (62) Trustee Executive Vice President, Development and Operations, Hines
The Williams Tower Interests Limited Partnership (real estate development).
50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
MELVILLE B. COX (58) Vice President Vice President and Chief Compliance Officer, A I M Advisors,
Inc. and A I M Capital Management, Inc.; and Vice President,
A I M Fund Services, Inc.
|
** Mr. Frischling may be an "interested person" of the Trust as that term is defined in the 1940 Act. The law firm in which Mr. Frischling is a partner is counsel to the independent directors/trustees of the AIM Funds and the AIM Funds pay such firm's fees. The AIM Funds believe that Mr. Frischling is not an interested person of the AIM Funds solely as a result of this relationship and are currently communicating with the SEC to confirm their view.
POSITIONS
HELD WITH
NAME, ADDRESS AND AGE REGISTRANT PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS
--------------------- ---------- --------------------------------------------
GARY T. CRUM (54) Vice President Director and President, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M Management Group
Inc.; Director and Senior Vice President, A I M Advisors,
Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC
(parent of AIM and a global investment management firm).
CAROL F. RELIHAN (46) Vice President Director, Senior Vice President, General Counsel and
and Secretary Secretary, A I M Advisors, Inc.; Director, Senior Vice
President, General Counsel and Secretary, A I M Management
Group Inc.; Director, Vice President and General Counsel,
Fund Management Company; Vice President, A I M Fund
Services, Inc., A I M Capital Management, Inc. and A I M
Distributors, Inc.
DANA R. SUTTON (42) Vice President Vice President and Fund Treasurer, A I M Advisors, Inc.
and Treasurer
|
The standing committees of the Board of Trustees are the Audit Committee, the Investments Committee and the Committee on Directors/Trustees.
The members of the Audit Committee are Messrs. Bayley, Crockett, Daly, Dowden (Vice Chair), Dunn (Chair), Fields, Frischling (on leave of absence), Pennock and Sklar, Dr. Prema Mathai-Davis and Miss Quigley. The Audit Committee is responsible for: (i) considering management's recommendations of independent accountants for each Fund and evaluating such accountant's performance, costs and financial stability; (ii) with AIM, reviewing and coordinating audit plans prepared by the Funds' independent accountants and management's internal audit staff; and (iii) reviewing financial statements contained in periodic reports to shareholders with the Funds' independent accountants and management.
The members of the Investments Committee are Messrs. Bayley, Crockett, Daly, Dowden, Dunn, Fields, Frischling, Pennock and Sklar (Chair), Dr. Mathai-Davis (Vice Chair) and Miss Quigley. The Investments Committee is responsible for: (i) overseeing AIM's investment-related compliance systems and procedures to ensure their continued adequacy; and (ii) considering and acting, on an interim basis between meetings of the full Board, on investment-related matters requiring Board consideration, including dividends and distributions, brokerage policies and pricing matters.
The members of the Committee on Directors/Trustees are Messrs. Bayley, Crockett (Chair), Daly, Dowden, Dunn, Fields (Vice Chair), Pennock and Sklar, Dr. Mathai-Davis and Miss Quigley. The Committee on Directors/Trustees is responsible for: (i) considering and nominating individuals to stand for election as dis-interested trustees as long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act; (ii) reviewing from time to time the compensation payable to the dis-interested trustees; and (iii) making recommendations to the Board regarding matters related to compensation, including deferred compensation plans and retirement plans for the dis-interested trustees.
The Committee on Directors/Trustees will consider nominees recommended
by a shareholder to serve as trustees, provided: (i) that such person is a
shareholder of record at the time he or she submits such names and is entitled
to vote at the meeting of shareholders at which trustees will be elected; and
(iii) that the Committee on Directors/Trustees or the Board, as applicable,
shall make the final determination of persons to be nominated.
Set forth below is information regarding compensation paid or accrued for each trustee of the Trust who is not affiliated with AIM during the year ended December 31, 2000:
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM THE BY ALL FROM ALL AIM
TRUSTEE TRUST(1) AIM FUNDS(2) FUNDS(3)
------- ------------ ------------ ------------
C. Derek Anderson(4) $64,278 -0- $105,000
Frank S. Bayley 66,351 -0- 105,000
Bruce L. Crockett(5) -0- $ 60,951 111,500
Owen Daly II(5) -0- 97,195 111,500
Albert R. Dowden(5) -0- -0- 13,435
Edward K. Dunn, Jr.(5) -0- 22,138 111,500
Jack M. Fields(5) -0- 23,019 108,500
Carl Frischling(5)(6) -0- 107,507 111,500
Prema Mathai-Davis(5) -0- 22,606 111,500
Lewis F. Pennock(5) -0- 67,995 111,500
Ruth H. Quigley 66,351 -0- 105,000
Louis S. Sklar(5) -0- 87,538 111,500
|
(1) Amounts in this column are as of the fiscal year ended October 31, 2000.
(2) Effective September 1, 2001, the Trust adopted a retirement plan covering all of the trustees. Certain other registered investment companies advised by AIM had adopted a retirement plan prior to such date. Messrs. Anderson and Bayley and Miss Quigley did not participate in the retirement plan for such other investment companies because Mr. Bayley and Miss Quigley were not elected to serve as trustees of such other investment companies until September 28, 2001, and Mr. Anderson declined to stand for election as a trustee of such other investment companies.
(3) As of December 31, 2000, Mr. Bayley and Miss Quigley served as trustees of four registered investment companies advised by AIM, and all other trustees who are not affiliated with AIM served as directors or trustees of twelve registered investment companies advised by AIM. All trustees currently serve as directors or trustees of sixteen registered investment companies advised by AIM.
(4) Mr. Anderson resigned as a trustee on August 16, 2001.
(5) Messrs. Crockett, Daly, Dowden, Dunn, Fields, Frischling, Pennock and Sklar and Dr. Mathai-Davis were elected to serve as trustees on August 17, 2001.
(6) Kramer Levin Naftalis & Frankel LLP became counsel to the independent trustees of the Trust effective August 17, 2001. Such firm currently serves as counsel to the independent directors or trustees of all sixteen registered investment companies advised by AIM and receives fees from all such investment companies. Mr. Frischling is a partner in such firm.
Retirement Plan For Trustees
Effective September 1, 2001, the Trustees have adopted a retirement plan for the Trustees of the Trust who are not affiliated with AIM. The retirement plan includes a retirement policy as well as retirement benefits for the non-AIM-affiliated trustees.
The retirement policy permits each non-AIM-affiliated trustee to serve until December 31 of the year in which the trustee turns 72. A majority of the Trustees may extend from time to time the retirement date of a trustee.
Annual retirement benefits are available to each non-AIM-affiliated trustee of the Trust and/or the other AIM Funds (each, a "Covered Fund") who has at least five years of credited service as a trustee (including service to a predecessor fund) for a Covered Fund. These retirement benefits are payable quarterly for a period of up to ten years. The retirement benefit will equal a maximum of 75% of the trustee's annual retainer paid or accrued by any Covered Fund to such trustee during the twelve-month period prior to retirement, including the amount of any retainer deferred under a separate deferred compensation agreement between the Covered Fund and the trustee, and based on the number of such trustee's years of service (not to exceed 10 years). A death benefit is also available under the plan that provides a surviving spouse with a quarterly installment of 50% of a deceased trustee's retirement benefits for the same length of time that the trustee would have received based on his or her service. A trustee must have attained the age of 65 (55 in the event of death or disability) to receive any retirement benefit.
Table #1 below shows estimated credited years of service under the Plan for each participating trustee as of December 31, 2000.
TABLE #1
ESTIMATED CREDITED YEARS
TRUSTEE OF SERVICE
------- ------------------------
Frank S. Bayley 15
Bruce L. Crockett 13
Owen Daly II 13
Albert R. Dowden 0
Edward K. Dunn, Jr. 2
Jack M. Fields 3
Carl Frischling 23
Prema Mathai-Davis 2
Lewis F. Pennock 19
Ruth H. Quigley 24
Louis S. Sklar 11
|
Table #2 below shows the estimated annual benefits payable upon retirement for specified years of service.
TABLE #2
ANNUAL RETAINER ESTIMATED ANNUAL
PRIOR TO BENEFITS UPON
RETIREMENT RETIREMENT
--------------- ----------------
$100,000 $75,000
$105,000 $78,750
$110,000 $82,500
$115,000 $86,250
$120,000 $90,000
$125,000 $93,750
|
Deferred Compensation Agreements
Messrs. Daly, Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis (for purposes of this paragraph only, the "Deferring Trustees") have each executed a Deferred Compensation Agreement (collectively, the "Compensation Agreements"). Pursuant to the Compensation Agreements, the Deferring Trustees have the option to elect to defer receipt of up to 100% of their compensation payable by the Trust, and such amounts are placed into a deferral account. Currently, the Deferring Trustees have the option to select various AIM Funds in which all or part of their deferral accounts shall be deemed to be invested. Distributions from the Deferring Trustees' deferral accounts will be paid in cash, generally in equal quarterly installments over a period of up to ten (10) years (depending on the Compensation Agreement) beginning on the date selected under the Compensation Agreement. The Board, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the Deferring Trustee's retirement benefits commence under the Plan. The Board, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the Deferring Trustee's retirement benefits commence under the plan. The Trust's Board of Trustees, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the Deferring Trustee's termination of service as a trustee of the Trust. If a Deferring Trustee dies prior to the distribution of amounts in his or her deferral account, the balance of the deferral account will be distributed to his or her designated beneficiary. The Compensation Agreements are not funded and, with respect to the payments of amounts held in the deferral accounts, the Deferring Trustees have the status of unsecured creditors of the Trust and of each other AIM Fund from which they are deferring compensation.
INVESTMENT ADVISORY AND ADMINISTRATION SERVICES RELATING TO THE FUNDS
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, was organized in 1976 and, together with its subsidiaries, manages or advises approximately 135 investment portfolios encompassing a broad range of investment objectives. 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 a direct, wholly owned subsidiary of AIM Management, a holding company that has been engaged in the financial services business since 1976. AIM is also the sole shareholder of the Funds' principal underwriter, AIM Distributors.
AIM Management and AIM are indirect wholly owned subsidiaries of AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an independent 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. Certain of the directors and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Management" herein.
In addition to the investment resources of their Houston office, AIM draws upon the expertise, personnel, data and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville, Miami, New York, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Funds and the Portfolios, the Advisor employs a team approach, taking advantage of its investment resources around the world.
AIM and Trust have adopted a Code of Ethics which requires investment personnel and certain other employees (a) to pre-clear all personal securities transactions subject to the Code of Ethics; (b) to file reports regarding such transactions; (c) to refrain from personally engaging in (i) short-term trading of a security (ii) transactions involving a security within seven days of an AIM Fund transaction involving the same security, (subject to a de minimus exemption), and (iii) transactions involving securities being considered for investment by an AIM Fund (subject to a de minimus exemption); and (d) abide by certain other provisions of the Code of Ethics. The de minimus exception under the Code of Ethics covers situations where there is no material conflict of interest because of the large market capitalization of a security and the relatively small number of shares involved in a personal transaction. The Code of Ethics also prohibits AIM employees from purchasing securities in initial public offerings. Personal trading reports are periodically reviewed by AIM, and the Board of Trustees reviews quarterly and annual reports (which summarize any significant violations of the Code of Ethics). Sanctions for violating the Code of Ethics may include censure, monetary penalties, suspension or termination of employment.
AIM became investment manager and/or administrator to the Funds and the Portfolios (as defined below) effective June 1, 1998. Prior to that date, Chancellor LGT Asset Management, Inc. served as investment manager and administrator.
The Trust on behalf of each Fund has entered into a Master Investment Advisory Agreement (the "Master Advisory Agreement") and a Master Administrative Services Agreement (the "Master Administrative Services Agreement") with AIM.
Prior to September 11, 2000, Financial Services Fund and Infrastructure Fund were structured as feeder funds and invested all of their assets in the Global Financial Services Portfolio and Global Infrastructure Portfolio (each, a "Portfolio", and collectively, the "Portfolios"), respectively. Prior to September 1, 2001, Energy Fund was structured as a feeder fund and invested all of its assets in the Global Resources Portfolio (also, a "Portfolio"). Under the master-feeder structure, Global Financial Services Portfolio, Global Infrastructure Portfolio and Global Resources Portfolio paid investment management and administration fees pursuant to the terms of a prior investment advisory agreement with substantially similar terms to the Master Advisory Agreement now in effect. Energy Fund, Financial Services Fund and Infrastructure Fund paid administration fees and accounting services fees pursuant to the terms of an Administration Contract between the Trust and AIM and a Master Accounting Services Agreement between the Trust and AIM, respectively. As a result of the restructuring of Energy Fund, Financial Services Fund and Infrastructure Fund, the Trust, on behalf of Energy Fund, Financial Services Fund and Infrastructure Fund, entered into the Master Advisory Agreement and the Master Administrative Services Agreement.
Under the terms of the Master Advisory Agreement, AIM supervises all aspects of the Funds' operations and provides investment advisory services to the Funds. AIM obtains and evaluates economic, statistical and financial information to formulate and implement investment programs for the Funds. AIM will not be liable to the Funds or their shareholders except in the case of AIM's willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
Pursuant to the Master Administrative Services Agreement, AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Funds, including the services of a principal financial officer of the Funds and related staff. As compensation to AIM for its services under the Master Administrative Services Agreements, the Funds pay AIM for expenses incurred by AIM or its subsidiaries in connection with such services.
The Master Advisory Agreement provides that each Fund will pay or cause to be paid all expenses of the Fund not assumed by AIM, including, without limitation: brokerage commissions, taxes, legal, auditing or governmental fees, the cost of preparing share certificates, custodian,
transfer and shareholder service agent costs, expenses of issue, sale, redemption, and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of the Fund in connection with membership in investment company organizations, the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders.
The Master Advisory Agreement, will continue in effect from year to year only if such continuance is specifically approved at least annually by (i) the Trust's Board of Trustees or the vote of a "majority of the outstanding voting securities" of the Funds (as defined in the 1940 Act), and (ii) the affirmative vote of a majority of the trustees who are not parties to the agreements or "interested persons" of any such party (the "Non-Interested Trustees") by votes cast in person at a meeting called for such purpose. Each agreement provides that the Funds or AIM may terminate such agreement on 60 days' written notice without penalty. Each agreement terminates automatically in the event of its assignment.
AIM may from time to time waive or reduce its fee. Voluntary fee waivers or reductions may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions, AIM will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM and the Fund. Fee waivers or reductions set forth in the Master Advisory Agreement may not be terminated without shareholder approval.
AIM has voluntarily agreed, effective July 1, 2001, to waive a portion of advisory fees payable by each Fund. The amount of the waiver will equal 25% of the advisory fee AIM receives from the Affiliated Money Market Funds as a result of each Fund's investment of uninvested cash in an Affiliated Money Market Fund. See "Investments in Other Investment Companies."
Each of the named Portfolios or Funds paid the following investment management and administration fees net of any fee waivers for the period indicated or years ended October 31, 2000, 1999 and 1998 pursuant to the prior investment advisory agreement:
2000* 1999 1998
----------- ----------- -----------
Global Financial Services Portfolio $ 654,466 $ 520,478 $ 726,002
Global Infrastructure Portfolio 248,577 280,012 418,974
Global Resources Portfolio 54,033 191,117 434,214
Health Care Fund 4,963,633 4,855,959 5,149,191
Telecommunications and Technology Fund 29,880,111 15,437,508 15,344,878
|
Each named Fund paid to AIM the following management fees net of fee waivers for the period September 11, 2000 through October 31, 2000 pursuant to the Master Advisory Agreement:
2000
----------
Financial Services Fund.................................................... $ 310,991
Infrastructure Fund........................................................ 68,334
|
For the period indicated or fiscal years ended October 31, 2000 and 1999, AIM waived investment management and administration fees for the named Portfolios as follows:
2000* 1999
-------- --------
Global Financial Services Portfolio ......... -0- $144,306
Global Infrastructure Portfolio ............. $ 94,079 123,428
Global Resources Portfolio .................. 242,924 135,288
|
* Reimbursement of fees with respect to Global Financial Services Portfolio and Global Infrastructure Portfolio was through September 10, 2000.
For the period September 11, 2000 through October 31, 2000, AIM waived management fees for the named Fund as follows:
2000
---------
Infrastructure Fund........................................................ $ 22,228
|
For these services, each Fund (except Biotech Fund) pays AIM investment advisory fees, computed daily and paid monthly, based on its average daily net assets, at the annualized rate of 0.975% on the first $500 million, 0.95% on the next $500 million, 0.925% on the next $500 million and 0.90% on the amounts thereafter. Biotech Fund pays AIM investment advisory fees calculated at the annual rate of 1.00% of the first $1 billion of average daily net assets and 0.95% of average net assets over $1 billion. The investment advisory fees paid by the Funds are higher than those paid by most mutual funds. The Funds pay all expenses not assumed by AIM, AIM Distributors or other agents. AIM has undertaken to limit each Fund's expenses (exclusive of brokerage commissions, taxes, interest and extraordinary expenses) to the annual rate of 2.00%, 2.50% and 2.50% of the average daily net assets of each Fund's Class A, Class B and Class c shares, respectively, until June 30, 2002.
In addition, if a Fund engages in securities lending, AIM will provide
the Fund investment advisory services and related administrative services. The
Master Advisory Agreement describes the administrative services to be rendered
by AIM if a Fund engages in securities lending activities, as well as the
compensation AIM may receive for such administrative services. Services to be
provided include: (a) overseeing participation in the securities lending program
to ensure compliance with all applicable regulatory and investment guidelines;
(b) assisting the securities lending agent or principal (the agent) in
determining which specific securities are available for loan; (c) monitoring the
agent to ensure that securities loans are effected in accordance with AIM's
instructions and with procedures adopted by the Board; (d) preparing appropriate
periodic reports for, and seeking appropriate approvals from, the Board with
respect to securities lending activities; (e) responding to agent inquiries; and
(f) performing such other duties as may be necessary.
AIM's compensation for advisory services rendered in connection with securities lending is included in the advisory fee schedule. As compensation for the related administrative services AIM will provide, a lending Fund will pay AIM a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities. AIM currently intends to waive such fee, and has agreed to seek Board approval prior to its receipt of all or a portion of such fee.
For the period indicated or fiscal years ended October 31, 2000, 1999 and 1998, each named Fund paid AIM and the prior investment manager and administrator the following administrative service fees pursuant to the Administrative Contract previously in effect:
2000* 1999 1998
-------- -------- --------
Financial Services Fund .......................... $226,807 $218,971 $250,093
Infrastructure Fund .............................. 118,140 138,782 210,329
Energy Fund ...................................... -0- 112,982 233,400
|
* Financial Services Fund and Infrastructure Fund paid fees pursuant to the Administration Contract through September 10, 2000.
Under a Master Accounting Services Agreement previously in effect, AIM served as the Funds' pricing and accounting agent. For these services, the Funds paid AIM such fees as determined in accordance with methodologies established, from time to time, by the Trust's Board of Trustees.
For the period indicated or fiscal years ended October 31, 2000, 1999 and 1998, each Fund paid AIM and the prior investment manager the following accounting services fees:
2000* 1999 1998
--------- --------- ---------
Financial Services Fund................................... $ 41,667 $ 34,005 $ 27,027
Health Care Fund.......................................... 117,295 142,382 142,357
Infrastructure Fund....................................... 41,667 25,171 22,640
Energy Fund............................................... 50,000 24,486 24,981
Telecommunications and Technology Fund.................... 202,100 320,819 437,627
|
* Financial Services Fund and Infrastructure Fund paid fees pursuant to the Master Accounting Services Agreement through September 10, 2000.
AIM, at its own expense, furnishes to the Trust office space and facilities. AIM furnishes to the Trust all personnel for managing the affairs of the Trust and each of its series of shares and is reimbursed under the Master Administrative Services Agreement for the services of a principal financial officer of the Trust and her staff. The Master Administrative Services Agreement between the Trust and AIM provides that AIM may perform or arrange for the provision of certain accounting, and other administrative services to each Fund which are not required to be performed by AIM under the Master Advisory Agreement. The Master Administrative Services Agreement will continue from year to year only if such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the "dis-interested" trustees, by votes cast in person at a meeting called for such purpose.
The named Funds paid AIM the following amounts for administrative services costs for the period September 11, 2000 through October 31, 2000, pursuant to the Master Administrative Services Agreement:
2000
--------
Financial Services Fund.................................................... $ 8,333
Infrastructure Fund........................................................ 8,333
|
For the fiscal years ended October 2000, 1999 and 1998, AIM did not reimburse expenses of any of the above named Funds.
In addition, the Transfer Agency and Service Agreement between the Trust and A I M Fund Services, Inc. ("AFS"), a registered transfer agency and wholly-owned subsidiary of AIM, provides that
AFS will perform certain shareholder services for the Funds for a fee per account serviced. The Transfer Agency and Service Agreement provides that AFS will receive a per account fee plus out-of-pocket expenses to process orders for purchases, redemptions and exchanges of shares; prepare and transmit payments for dividends and distributions declared by the Funds; maintain shareholder accounts and provide shareholders with information regarding the Funds and their accounts.
EXPENSES OF THE FUNDS
Each Fund pays all expenses not assumed by AIM, AIM Distributors and other agents. These expenses include, in addition to the advisory, administration, distribution, transfer agency, pricing and accounting agency and brokerage fees discussed above, legal and audit expenses, custodian fees, trustees' fees, organizational fees, fidelity bond and other insurance premiums, taxes, extraordinary expenses and expenses of reports and prospectuses sent to existing investors. The allocation of general Trust expenses and expenses shared among the Funds and other funds organized as series of the Trust are allocated on a basis deemed fair and equitable, which may be based on the relative net assets of the Funds or the nature of the service performed and relative applicability to the Funds. Expenditures, including costs incurred in connection with the purchase or sale of portfolio securities, which are capitalized in accordance with generally accepted accounting principles applicable to investment companies, are accounted for as capital items and not as expenses. The ratio of each Fund's expenses to its relative net assets can be expected to be higher than the expense ratios of funds investing solely in domestic securities, since the cost of maintaining the custody of foreign securities and the rate of investment management fees paid by the Funds generally are higher than the comparable expenses of such other funds.
THE DISTRIBUTION PLANS
THE CLASS A AND C PLAN
The Trust has adopted a Master Distribution Plan pursuant to Rule 12b-1 under the 1940 Act relating to the Class A and C shares of the Funds (the "Class A and C Plan"). The Class A and C Plan provides that the Class A shares pay 0.50% per annum (0.35% for Class A shares of Biotech Fund) of the average daily net assets attributable to Class A shares as compensation to AIM Distributors for the purpose of financing any activity which is primarily intended to result in the sale of Class A shares. Under the Class A and C Plan, Class C shares of each Fund pay compensation to AIM Distributors at an annual rate of 1.00% of the average daily net assets attributable to Class C shares. Payments can also be directed by AIM Distributors to selected institutions who have entered into service agreements with respect to Class A and Class C shares of each Fund and who provide continuing personal services to their customers who own Class A and C shares of the Fund. The service fees payable to selected 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 which were purchased on or after a prescribed date set forth in the Class A and C Plan. Activities appropriate for financing under the Class A and C Plan include, but are not limited to, the following: printing of prospectuses and statements of additional information and reports for other than existing shareholders; overhead; preparation and distribution of advertising material and sales literature; expenses of organizing and conducting sales seminars; supplemental payments to dealers and other institutions such as asset-based sales charges or as payments of service fees under shareholder service arrangements; and costs of administering the Class A and C Plan.
Of the aggregate amount payable under the Class A and C Plan, payments to dealers and other financial institutions including AIM Distributors, acting as principal, for providing continuing personal shareholder services to their customers who purchase and own shares of the Fund, in amounts of up to 0.25% of the average daily net assets of the Fund attributable to the customers of such dealers or financial institutions are characterized as a service fee, and payments to dealers and other financial institutions including AIM Distributors, acting as principal, in excess of such amount and payments to AIM
Distributors would be characterized as an asset-based sales charge pursuant to the Class A and C Plan. The Class A and C Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Trust with respect to the Fund. The Class A and C Plan does not obligate the Fund to reimburse AIM Distributors for the actual expenses AIM Distributors may incur in fulfilling its obligations under the Class A and C Plan on behalf of the Fund. Thus, under the Class A and C Plan, even if AIM Distributors' actual expenses exceed the fee payable to AIM Distributors thereunder at any given time, the Fund will not be obligated to pay more than that fee. If AIM Distributors' expenses are less than the fee it receives, AIM Distributors will retain the full amount of the fee.
THE CLASS B PLAN
The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1 under the 1940 Act relating to Class B shares of the Funds (the "Class B Plan", and collectively with the Class A and C Plan, the "Plans"). Under the Class B Plan, each Fund pays compensation to AIM Distributors at an annual rate of 1.00% of the average daily net assets attributable to Class B shares. Of such amount, each Fund pays a service fee of 0.25% of the average daily net assets attributable to Class B shares to selected dealers and other institutions which furnish continuing personal shareholder services to their customers who purchase and own Class B shares. Amounts paid in accordance with the Class B Plan may be used to finance any activity primarily intended to result in the sale of Class B shares, including but not limited to printing of prospectuses and statements of additional information and reports for other than existing shareholders; overhead; preparation and distribution of advertising material and sales literature; expenses of organizing and conducting sales seminars; supplemental payments to dealers and other institutions such as asset-based sales charges or as payments of service fees under shareholder service arrangements; and costs of administering the Class B Plan.
BOTH PLANS
Pursuant to an incentive program, AIM Distributors may enter into agreements ("Shareholder Service Agreements") with investment dealers selected from time to time by AIM Distributors for the provision of distribution assistance in connection with the sale of the Funds' shares to such dealers' customers, and for the provision of continuing personal shareholder services to customers who may from time to time directly or beneficially own shares of the Funds. The distribution assistance and continuing personal shareholder services to be rendered by dealers under the Shareholder Service Agreements may include, but shall not be limited to, the following: distributing sales literature; answering routine customer inquiries concerning the Fund; assisting customers in changing dividend options, account designations and addresses, and in enrolling in any of the several special investment plans offered in connection with the purchase of a Fund's shares; assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions; investing dividends and any capital gains distributions automatically in a Fund's shares; and providing such other information and services as a Fund or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing payments to selected dealers, banks may enter into Shareholder Service Agreements authorizing payments under the Plans to be made to banks which provide services to their customers who have purchased shares. Services provided pursuant to Shareholder Service Agreements with banks may include some or all of the following: answering shareholder inquiries regarding the Funds; performing sub-accounting; establishing and maintaining shareholder accounts and records; processing customer purchase and redemption transactions; providing periodic statements showing a shareholder's account balance and the integration of such statements with those of other transactions and balances in the shareholder's other accounts serviced by the bank; forwarding applicable prospectuses, proxy statements, reports and notices to bank clients who hold Fund shares; and such other administrative services as a Fund reasonably may request, to the extent permitted by applicable statute, rule or regulation.
The Trust may also enter into Variable Group Annuity Contractholder Service Agreements ("Variable Contract Agreements") on behalf of the Funds authorizing payments to selected insurance
companies offering variable annuity contracts to employers as funding vehicles for retirement plans qualified under Section 401(a) of the Code. Services provided pursuant to such Variable Contract Agreements may include some or all of the following: answering inquiries regarding the Fund and the Trust; performing sub-accounting; establishing and maintaining contractholder accounts and records; processing and bunching purchase and redemption transactions; providing periodic statements of contract account balances; forwarding such reports and notices to contractholders relative to the Fund as deemed necessary; generally, facilitating communications with contractholders concerning investments in a Fund on behalf of plan participants; and performing such other administrative services as deemed to be necessary or desirable, to the extent permitted by applicable statute, rule or regulation to provide such services.
Similar agreements may be permitted under the Plans for institution which provide recordkeeping for and administrative services to 401(k) plans.
In addition, Shareholder Service Agreements may be permitted under the Plans for bank trust departments and brokers for bank trust departments which provide shareholder services to their customers.
AIM Distributors, acting as principal, may also enter into Shareholder Service Agreements with the Funds, substantially identical to those agreements entered into with investment dealers or other financial institutions, authorizing payments to AIM Distributors for providing continuing personal shareholder services to those customers for which AIM Distributors serves as dealer of record.
Financial intermediaries and any other person entitled to receive compensation for selling Fund shares may receive different compensation for selling shares of one particular class over another.
Under a Shareholder Service Agreement, each Fund agrees to pay periodically fees to selected dealers and other institutions who render the foregoing services to their customers. The fees payable under a Shareholder Service Agreement generally will be calculated at the end of each payment period for each business day of a Fund during such period at the annual rate of 0.25% of the average daily net asset value of the Fund's shares purchased or acquired through exchange. Fees calculated in this manner shall be paid only to those selected dealers or other institutions who are dealers or institutions of record at the close of business on the last business day of the applicable payment period for the account in which each Fund's shares are held.
Payments pursuant to the Plans are subject to any applicable limitations imposed by rules of the National Association of Securities Dealers, Inc. ("NASD"). The Plans conform to rules of the NASD by limiting payments made to dealers and other financial institutions who provide continuing personal shareholder services to their customers who purchase and own shares of the Funds to no more than 0.25% per annum of the average daily net assets of the funds attributable to the customers of such dealers or financial institutions, and by imposing a cap on the total sales charges, including asset based sales charges, that may be paid by the Fund and its respective classes.
AIM Distributors may from time to time waive or reduce any portion of its 12b-1 fee for Class A and Class C shares. Voluntary fee waivers or reductions may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions, AIM Distributors will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM Distributors and the Fund.
Under the Plans, certain financial institutions which have entered into service agreements and which sell shares of the Fund on an agency basis, may receive payments from the Funds pursuant to the respective Plans. AIM Distributors does not act as principal, but rather as agent for the Funds, in making dealer incentive and shareholder servicing payments to dealers and other financial institutions under the Plans. These payments are an obligation of the Funds and not of AIM Distributors. Financial
intermediaries and any other person entitled to receive compensation for selling Fund shares may receive different compensation for selling shares of one class over another.
For the fiscal year ended October 31, 2000, the various classes of the Funds paid to AIM Distributors the following amounts pursuant to the Plans:
% OF CLASS
AVERAGE DAILY
NET ASSETS
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------------- -------
Financial Services Fund 270,409 601,612 76,274 .50% 1.00% 1.00%
Health Care Fund 1,943,859 1,142,815 60,160 .50% 1.00% 1.00%
Infrastructure Fund 127,803 307,927 1,909 .50% 1.00% 1.00%
Energy Fund 69,673 163,259 2,711 .50% 1.00% 1.00%
Telecommunications and
Technology Fund $8,206,803 $15,064,977 $878,420 .50% 1.00% 1.00%
|
An estimate by category of actual fees paid by each Fund under the Class A and C Plan during the fiscal year ended October 31, 2000, were allocated as follows:
TELECOMMUNICATIONS
FINANCIAL HEALTH AND
SERVICES CARE INFRASTRUCTURE ENERGY TECHNOLOGY
FUND FUND FUND FUND FUND
---------- ---------- -------------- ---------- ------------------
CLASS A
Advertising $ 16,482 $ 133,399 $ 10,794 $ 4,763 $ 515,831
Printing and Mailing
prospectuses, semi-annual
reports and annual
reports (other than
to current shareholders) 2,077 16,151 1,237 471 64,216
Seminars 5,517 43,985 3,437 0 192,494
Compensation to Underwriters
to partially offset
other marketing expenses 0 0 0 0 0
Compensation to Dealers
including Finder's Fees 246,333 1,750,324 112,335 64,439 7,434,262
Compensation to Sales
Personnel 0 0 0 0 0
Annual Report Total $ 270,409 $1,943,859 $ 127,803 $ 69,673 $8,206,803
|
An estimate by category of actual fees paid by each Fund under the Class B Plan during the fiscal year ended October 31, 2000, were allocated as follows:
TELECOMMUNICATIONS
FINANCIAL HEALTH AND
SERVICES CARE INFRASTRUCTURE ENERGY TECHNOLOGY
FUND FUND FUND FUND FUND
----------- ----------- -------------- ----------- ------------------
CLASS B
Advertising $ 11,005 $ 13,792 $ 1,721 $ 852 $ 200,494
Printing and Mailing
prospectuses, semi-annual
reports and annual
reports (other than
to current shareholders) 1,234 1,521 170 84 24,991
Seminars 3,917 4,224 315 468 78,815
Compensation to Underwriters
to partially offset
other marketing expenses 451,209 857,111 230,946 122,444 11,298,732
Compensation to Dealers 134,247 266,167 74,775 39,411 3,461,945
Compensation to Sales
Personnel 0 0 0 0 0
Annual Report Total $ 601,612 $ 1,142,815 $ 307,927 $ 163,259 $15,064,977
|
An estimate by category of actual fees paid by each Fund under the Class A and C Plan during the year ended October 31, 2000 were allocated as follows:
TELECOMMUNICATIONS
FINANCIAL HEALTH AND
SERVICES CARE INFRASTRUCTURE ENERGY TECHNOLOGY
FUND FUND FUND FUND FUND
--------- -------- -------------- -------- ------------------
CLASS C
Advertising $ 6,243 $ 3,474 $ 421 $ 602 $ 47,669
Printing and Mailing
prospectuses, semi-annual
reports and annual
reports (other than
to current shareholders) 694 344 0 0 6,446
Seminars 2,312 1,909 0 0 21,487
Compensation to Underwriters
to partially offset
other marketing expenses 53,180 31,497 1,263 1,805 469,263
Compensation to Dealers 13,845 22,935 225 304 333,555
Compensation to Sales
Personnel 0 0 0 0 0
Annual Report Total $ 76,274 $ 60,159 $ 1,909 $ 2,711 $878,420
|
The Plans require AIM Distributors to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to the Plans and the purposes for which such expenditures were made. The Board of Trustees reviews these reports in connection with their decisions with respect to the Plans.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service Agreements were approved by the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plans or in any agreements related to the Plans ("Qualified Trustees"). In approving
the Plans in accordance with the requirements of Rule 12b-1, the Trustees considered various factors and determined that there is a reasonable likelihood that the Plans would benefit each class of each Fund and their respective shareholders.
The Plans do not obligate the Funds to reimburse AIM Distributors for the actual expenses AIM Distributors may incur in fulfilling its obligations under the Plans. Thus, even if AIM Distributors' actual expenses exceed the fee payable to AIM Distributors thereunder at any given time, a Fund will not be obligated to pay more than that fee. If AIM Distributors' expenses are less than the fee it receives, AIM Distributors will retain the full amount of the fee.
Unless terminated earlier in accordance with their terms, the Plans continue in effect from year to year, as long as such continuance is specifically approved at least annually by the Board of Trustees, including a majority of the Qualified Trustees.
The Plans may be terminated by the vote of a majority of the Qualified Trustees, or, with respect to a particular class, by the vote of a majority of the outstanding voting securities of that class.
Any change in the Plans that would increase materially the distribution expenses paid by the applicable class requires shareholder approval; otherwise, it may be amended by the trustees, including a majority of the Qualified Trustees, by votes cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plans are in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. In the event the Class A and C Plan is amended in a manner which the Board of Trustees determines would materially increase the charges paid under the Class A and C Plan, the Class B shares of each Fund will no longer convert into Class A shares of the same Fund unless the Class B shares, voting separately, approve such amendment. If the Class B shareholders do not approve such amendment, the Board of Trustees will (i) create a new class of shares of the Fund which is identical in all material respects to the Class A shares as they existed prior to the implementation of the amendment and (ii) ensure that the existing Class B shares of the Fund will be exchanged or converted into such new class of shares no later than the date the Class B shares were scheduled to convert into Class A shares.
The principal differences between the Class A and C Plan, on the one
hand, and the Class B Plan, on the other hand, are: (i) the Class A and C Plan
allows payment to AIM Distributors or to dealers or financial institutions of up
to 0.50% of average daily net assets of the Class A shares of each Fund, as
compared to 1.00% of such assets of the Funds' Class B shares; (ii) the Class B
Plan obligates the Class B shares to continue to make payments to AIM
Distributors following termination of the Class B shares Distribution Agreement
with respect to Class B shares sold by or attributable to the distribution
efforts of AIM Distributors or its predecessor, GT Global, Inc. unless there has
been a complete termination of the Class B Plan (as defined in such Plan) and
(iii) the Class B Plan expressly authorizes AIM Distributors to assign, transfer
or pledge its rights to payments pursuant to the Class B Plan.
THE DISTRIBUTOR
Information concerning AIM Distributors and the continuous offering of each Fund's shares is set forth in the Prospectuses under the heading "Purchasing Shares." The Trust has entered into a Master Distribution Agreement with AIM Distributors relating to the Class A shares and Class C shares of the Funds and a Master Distribution Agreement with AIM Distributors relating to the Class B shares of the Funds. Such Master Distribution Agreements are hereinafter collectively referred to as the "Distribution Agreements."
The Distribution Agreements provide that AIM Distributors will bear the expenses of printing from the final proof and distributing each Fund's prospectuses and statements of additional information relating to public offerings made by AIM Distributors pursuant to the Distribution Agreements (other than those prospectuses and statements of additional information distributed to existing shareholders of the
Fund), and any promotional or sales literature used by AIM Distributors or furnished by AIM Distributors to dealers in connection with the public offering of each Fund's shares, including expenses of advertising in connection with such public offerings. AIM Distributors has not undertaken to sell any specified number of shares of any classes of any Fund.
The Distribution Agreements provide AIM Distributors with the exclusive right to distribute shares of the Funds directly and through institutions with whom AIM Distributors has entered into selected dealer agreements. AIM Distributors is authorized to advance to institutions through whom Class B shares are sold, a sales commission under schedules established by AIM Distributors. The Distribution Agreement for the Class B shares provides that AIM Distributors (or its assignee or transferee) will receive 0.75% (of the total 1.00% payable under the distribution plan applicable to Class B shares of each Fund's average daily net assets attributable to Class B shares attributable to the sales efforts of AIM Distributors.
AIM Distributors expects to pay sales commissions from its own resources to dealers and institutions who sell Class B shares of the Funds at the time of such sales. Payments with respect to Class B shares will equal 4.00% of the purchase price of the Class B shares sold by the dealer or institution, and will consist of a sales commission equal to 3.75% of the purchase price of the Class B shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. The portion of the payments to AIM Distributors under the Class B Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of such sales commissions plus financing costs. AIM Distributors anticipates that it will require a number of years to recoup from Class B Plan payments the sales commissions paid to dealers and institutions in connection with sales of Class B shares. In the future, if multiple distributors serve a Fund, each such distributor (or its assignee or transferee) would receive a share of the payments under the Class B Plan based on the portion of the Fund's Class B shares sold by or attributable to the distribution efforts of that distributor.
The Trust (on behalf of any class of a Fund) or AIM Distributors may terminate the Distribution Agreements on sixty (60) days' written notice without penalty. The Distribution Agreements will terminate automatically in the event of their assignment. In the event the Class B shares Distribution Agreement is terminated, AIM Distributors would continue to receive payments of asset based distribution fees in respect of the outstanding Class B shares attributable to the distribution efforts of AIM Distributors and its predecessor; provided, however, that a complete termination of the Class B Plan (as defined in such Plan) would terminate all payments by the Fund of asset based distribution fees and service fees to AIM Distributors. Termination of the Class B Plan or Distribution Agreement does not affect the obligation of Class B shareholders to pay contingent deferred sales charges.
From time to time, AIM Distributors may transfer and sell its right to payments under the Distribution Agreement relating to Class B shares in order to finance distribution expenditures in respect of Class B shares.
The following chart reflects the total sales charges paid in connection with the sale of Class A shares of each Fund and the amount retained by the Trust's distributors for the fiscal years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
------------------------- ------------------------- -------------------------
SALES AMOUNT SALES AMOUNT SALES AMOUNT
CHARGE RETAINED CHARGE RETAINED CHARGE RETAINED
---------- ---------- ---------- ---------- ---------- ----------
Financial Services Fund $ 784,002 $ 133,801 $ 86,372 $ 16,231 $ 5,454 $ 5,299
Health Care Fund $ 554,506 $ 97,946 $ 276,656 $ 51,905 $ 8,771 $ 9,735
Infrastructure Fund $ 48,611 $ 9,122 $ 15,244 $ 3,065 $ 1,469 $ 1,423
Energy Fund $ 35,823 $ 4,984 $ 47,364 $ 10,174 $ 3,733 $ 3,635
Telecommunications and
Technology Fund $9,076,900 $1,575,107 $1,167,764 $ 205,929 $ 36,792 $ 34,813
|
Prior to June 1, 1998, GT Global Inc. was the Trust's distributor, and a total of $389,099 sales charges were paid in connection with the sale of Class A shares of each Fund and the amount retained by GT Global Inc. was $97,425.
The following chart reflects the contingent deferred sales charges paid by Class A, Class B and Class C* shareholders and retained by the Trust's distributor for the fiscal years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---------- ---------- ----------
Financial Services Fund $ 10,205 $ 1,268 $ 191,418
Health Care Fund $ 3,020 $ 3,480 $ 511,753
Infrastructure Fund $ 6,965 $ 0 $ 352,924
Energy Fund $ 516 $ 0 $ 357,602
Telecommunications and Technology Fund $ 99,517 $ 8,313 $2,950,006
|
* Class C shares of each fund commenced operations on 03/01/99.
SALES CHARGES AND DEALER CONCESSIONS
CATEGORY I. Certain AIM Funds are currently sold with a sales charge ranging from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These AIM Funds include Class A shares of each of AIM International Value Fund, AIM Aggressive Growth Fund, AIM Asian Growth Fund, AIM Basic Value Fund, AIM Blue Chip Fund, AIM Capital Development Fund, AIM Charter Fund, AIM Constellation Fund, AIM Core Strategies Fund, AIM Dent Demographic Trends Fund, AIM Euroland Growth Fund, AIM European Development Fund, AIM European Small Company Fund, AIM Global Biotech Fund, AIM Global Utilities Fund, AIM International Emerging Growth Fund, AIM International Equity Fund, AIM Large Cap Basic Value Fund, AIM Large Cap Equity Fund, AIM Large Cap Growth Fund, AIM Large Cap Opportunities Fund, AIM Mid Cap Basic Value Fund, AIM Mid Cap Equity Fund, AIM Mid Cap Growth Fund, AIM Mid Cap Opportunities Fund, AIM New Technology Fund, AIM Select Equity Fund, AIM Small Cap Equity Fund, AIM Small Cap Growth Fund, AIM Small Cap Opportunities Fund, AIM Value Fund, AIM Value II Fund, AIM Weingarten Fund and AIM Worldwide Spectrum Fund.
Dealer
Concession
Investor's Sales Charge ----------
----------------------------- As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment in Offering Amount Offering
Single Transaction(1) Price Invested Price
----------------------- ------------- ---------- ----------
Less than $ 25,000 5.50% 5.82% 4.75%
$ 25,000 but less than $ 50,000 5.25 5.54 4.50
$ 50,000 but less than $ 100,000 4.75 4.99 4.00
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 3.00 3.09 2.50
$500,000 but less than $1,000,000 2.00 2.04 1.60
|
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in excess of $250,000.
CATEGORY II. Certain AIM Funds are currently sold with a sales charge ranging from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These AIM Funds are: the Class A
shares of each of AIM Real Estate Fund, AIM Balanced Fund, AIM Basic Balanced Fund, AIM Developing Markets Fund, AIM Global Aggressive Growth Fund, AIM Global Financial Services Fund, AIM Global Growth Fund, AIM Global Health Care Fund, AIM Global Income Fund, AIM Global Infrastructure Fund, AIM Global Energy Fund, AIM Global Telecommunications and Technology Fund, AIM Global Trends Fund, AIM High Income Municipal Fund, AIM High Yield Fund, AIM High Yield Fund II, AIM Income Fund, AIM Intermediate Government Fund, AIM Municipal Bond Fund, AIM Strategic Income Fund and AIM Total Return Bond Fund.
Dealer
Concession
Investor's Sales Charge ----------
----------------------------- As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
----------------------- ------------- ---------- ----------
Less than $ 50,000 4.75% 4.99% 4.00%
$ 50,000 but less than $ 100,000 4.00 4.17 3.25
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.60
|
CATEGORY III. Certain AIM Funds are currently sold with a sales charge ranging from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000. These AIM Funds are the Class A shares of each of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund.
Dealer
Concession
Investor's Sales Charge ----------
----------------------------- As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment In Offering Amount Offering
Single Transaction Price Invested Price
----------------------- ------------- ---------- ---------
Less than $ 100,000 1.00% 1.01% 0.75%
$100,000 but less than $ 250,000 0.75 0.76 0.50
$250,000 but less than $1,000,0000 .50 0.50 0.40
|
There is no sales charge on purchases of $1,000,000 or more of Category I, II or III funds; however, AIM Distributors may pay a dealer concession and/or advance a service fee on such transactions as set forth below.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire initial sales charge to dealers for all sales with respect to which orders are placed with AIM Distributors during a particular period. Dealers to whom substantially the entire sales charge is re-allowed may be deemed to be "underwriters" as that term is defined under the Securities Act of 1933.
In addition to, or instead of, amounts paid to dealers as a sales commission, AIM Distributors may, from time to time, at its expense or as an expense for which it may be compensated under a distribution plan, if applicable, pay a bonus or other consideration or incentive to dealers. The total amount of such additional bonus payments or other consideration shall not exceed 0.25% of the public offering price of the shares sold or of average daily net assets of the AIM Fund attributable to that particular dealer. At the option of the dealer, such incentives may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered representatives and their families to places within or outside the United States. Any such bonus or incentive programs will not change the price paid by investors for the purchase of the applicable AIM Fund's shares or the amount that any particular AIM Fund will receive as proceeds from such sales. Dealers may not use sales of the AIM Funds' shares to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any state.
AIM Distributors may make payments to dealers and institutions who are dealers of record for purchases of $1 million or more of Class A shares (or shares which normally involve payment of initial sales charges), which are sold at net asset value and are subject to a contingent deferred sales charge, for all AIM Funds other than Class A shares of each of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess of $20 million of such purchases. AIM Distributors may make payments to dealers and institutions who are dealers of record for purchases of $1 million or more of Class A shares (or shares which normally involve payment of initial sales charges), and which are sold at net asset value and are not subject to a contingent deferred sales charge, in an amount up to 0.10% of such purchases of Class A shares of AIM Limited Maturity Treasury Fund, and in an amount up to 0.25% of such purchases of Class A shares of AIM Tax-Free Intermediate Fund.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class B shares of the AIM Funds at the time of such sales. Payments with respect to Class B shares will equal 4.00% of the purchase price of the Class B shares sold by the dealer or institution, and will consist of a sales commission equal to 3.75% of the purchase price of the Class B shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. The portion of the payments to AIM Distributors under the Class B Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds at the time of such sales. Payments with respect to Class C shares will equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution, and will consist of a sales commission of 0.75% of the purchase price of the Class C shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. AIM Distributors will retain all payments received by it relating to Class C shares for the first year after they are purchased. The portion of the payments to AIM Distributors under the Class A and C Plan attributable to Class C shares which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of on-going sales commissions to dealers plus financing costs, if any. After the first full year, AIM Distributors will make such payments quarterly to dealers and institutions based on the average net asset value of Class C shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record. These commissions are not paid on sales to investors exempt from the CDSC, including shareholders of record of AIM Advisor Funds, Inc. on April 30, 1995, who purchase additional shares in any of the Funds on or after May 1, 1995, and in circumstances where AIM Distributors grants an exemption on particular transactions.
Exchanges of AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares are considered sales of such Class B shares or Class C shares for purposes of the sales charges and dealer concessions discussed above.
AIM Distributors may pay investment dealers or other financial service firms for share purchases (measured on an annual basis) of Class A Shares of all AIM Funds except AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund and AIM Tax-Exempt Cash Fund sold at net asset value to an employee benefit plan as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of the net asset value of any Class A shares of AIM Limited Maturity Treasury Fund sold at net asset value to an employee benefit plan in accordance with this paragraph.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables (quantity discounts) apply to purchases of shares of the AIM Funds that are otherwise subject to an initial sales charge, provided that such purchases are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Class B and Class C shares of AIM Floating Rate Fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges.
The term "purchaser" means:
o an individual and his or her spouse or domestic partner, and children, including any trust established exclusively for the benefit of any such person; or a pension, profit-sharing, or other retirement plan established exclusively for the benefit of any such person, such as an IRA, Roth IRA, a single-participant money-purchase/profit-sharing plan or an individual participant in a 403(b) Plan (unless such 403(b) plan qualifies as the purchaser as defined below);
o a 403(b) plan, the employer/sponsor of which is an organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), if:
a. the employer/sponsor must submit contributions for all participating employees in a single contribution transmittal (i.e., the Funds will not accept contributions submitted with respect to individual participants);
b. each transmittal must be accompanied by a single check or wire transfer; and
c. all new participants must be added to the 403(b) plan by submitting an application on behalf of each new participant with the contribution transmittal;
o a trustee or fiduciary purchasing for a single trust, estate or single fiduciary account (including a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Code) and 457 plans, although more than one beneficiary or participant is involved;
o a Simplified Employee Pension (SEP), Salary Reduction and other Elective Simplified Employee Pension account (SAR-SEP) or a Savings Incentive Match Plans for Employees IRA (SIMPLE IRA), where the employer has notified the distributor in writing that all of its related employee SEP, SAR-SEP or SIMPLE IRA accounts should be linked; or
o any other organized group of persons, whether incorporated or not, provided the organization has been in existence for at least six months and has some purpose other than the purchase at a discount of redeemable securities of a registered investment company.
Investors or dealers seeking to qualify orders for a reduced initial sales charge must identify such orders and, if necessary, support their qualification for the reduced charge. AIM Distributors reserves the right to determine whether any purchaser is entitled, by virtue of the foregoing definition, to the reduced sales charge. No person or entity may distribute shares of the AIM Funds without payment of the applicable sales charge other than to persons or entities who qualify for a reduction in the sales charge as provided herein.
1. LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced initial sales charges by completing the appropriate section of the account application and by fulfilling a Letter of Intent
("LOI"). The LOI privilege is also available to holders of the Connecticut General Guaranteed Account, established for tax qualified group annuities, for contracts purchased on or before June 30, 1992. The LOI confirms such purchaser's intention as to the total investment to be made in shares of the AIM Funds (except for (i) Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund, and (ii) Class B and Class C shares of AIM Floating Rate Fund) within the following 13 consecutive months. By marking the LOI section on the account application and by signing the account application, the purchaser indicates that he understands and agrees to the terms of the LOI and is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge made during the 13-month period will be made at the public offering price applicable to a single transaction of the total dollar amount indicated by the LOI, as described under "Sales Charges and Dealer Concessions." It is the purchaser's responsibility at the time of purchase to specify the account numbers that should be considered in determining the appropriate sales charge. The offering price may be further reduced as described under "Rights of Accumulation" if the Transfer Agent is advised of all other accounts at the time of the investment. Shares acquired through reinvestment of dividends and capital gains distributions will not be applied to the LOI. At any time during the 13-month period after meeting the original obligation, a purchaser may revise his intended investment amount upward by submitting a written and signed request. Such a revision will not change the original expiration date. By signing an LOI, a purchaser is not making a binding commitment to purchase additional shares, but if purchases made within the 13-month period do not total the amount specified, the investor will pay the increased amount of sales charge as described below. Purchases made within 90 days before signing an LOI will be applied toward completion of the LOI. The LOI effective date will be the date of the first purchase within the 90-day period. The Transfer Agent will process necessary adjustments upon the expiration or completion date of the LOI. Purchases made more than 90 days before signing an LOI will be applied toward completion of the LOI based on the value of the shares purchased calculated at the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial purchase (or subsequent purchases if necessary) the Transfer Agent will escrow in the form of shares an appropriate dollar amount (computed to the nearest full share). All dividends and any capital gain distributions on the escrowed shares will be credited to the purchaser. All shares purchased, including those escrowed, will be registered in the purchaser's name. If the total investment specified under this LOI is completed within the 13-month period, the escrowed shares will be promptly released. If the intended investment is not completed, the purchaser will pay the Transfer Agent the difference between the sales charge on the specified amount and the amount actually purchased. If the purchaser does not pay such difference within 20 days of the expiration date, he irrevocably constitutes and appoints the Transfer Agent as his attorney to surrender for redemption any or all shares, to make up such difference within 60 days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to cancel the agreement, he must give written notice to AIM Distributors. If at any time before completing the LOI Program the purchaser requests the Transfer Agent to liquidate or transfer beneficial ownership of his total shares, a cancellation of the LOI will automatically be effected. If the total amount purchased is less than the amount specified in the LOI, the Transfer Agent will redeem an appropriate number of escrowed shares equal to the difference between the sales charge actually paid and the sales charge that would have been paid if the total purchases had been made at a single time.
2. RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also qualify for reduced initial sales charges based upon such purchaser's existing investment in shares of any of the AIM Funds (except for (i) Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund, (ii) Class B and Class C shares of the AIM Funds and (iii) shares of AIM Floating Rate Fund) at the time of the proposed purchase. Rights of Accumulation are also available to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992. To determine whether or not a reduced initial sales
charge applies to a proposed purchase, AIM Distributors takes into account not only the money which is invested upon such proposed purchase, but also the value of all shares of the AIM Funds (except for (i) Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund, and (ii) Class B and Class C shares of AIM Floating Rate Fund) owned by such purchaser, calculated at their then current public offering price. If a purchaser so qualifies for a reduced sales charge, the reduced sales charge applies to the total amount of money then being invested by such purchaser and not just to the portion that exceeds the breakpoint above which a reduced sales charge applies. For example, if a purchaser already owns qualifying shares of any AIM Fund with a value of $20,000 and wishes to invest an additional $20,000 in a fund, with a maximum initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will apply to the full $20,000 purchase and not just to the $15,000 in excess of the $25,000 breakpoint. To qualify for obtaining the discount applicable to a particular purchase, the purchaser or his dealer must furnish AFS with a list of the account numbers and the names in which such accounts of the purchaser are registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at net asset value (without payment of an initial sales charge) may be made in connection with: (a) the reinvestment of dividends and distributions from a fund; (b) exchanges of shares of certain funds; (c) use of the reinstatement privilege; or (d) a merger, consolidation or acquisition of assets of a fund.
The following purchasers will not pay initial sales charges on purchases of Class A shares because there is a reduced sales effort involved in sales to these purchasers:
o AIM Management and its affiliates, or their clients;
o Any current or retired officer, director or employee (and members of their immediate family) of AIM Management, its affiliates or The AIM Family of Funds--Registered Trademark--, and any foundation, trust or employee benefit plan established exclusively for the benefit of, or by, such persons;
o Any current or retired officer, director, or employee (and members of their immediate family), of PFPC Inc. (formerly known as First Data Investor Services Group).
o Sales representatives and employees (and members of their immediate family) of selling group members or financial institutions that have arrangements with such selling group members;
o Purchases through approved fee-based programs;
o Employee benefit plans designated as purchasers as defined above, and non-qualified plans offered in conjunction therewith, provided the initial investment in the plan(s) is at least $1 million; the sponsor signs a $1 million LOI; the employer-sponsored plan(s) has at least 100 eligible employees; or all plan transactions are executed through a single omnibus account per Fund and the financial institution or service organization has entered into the appropriate agreements with the distributor. Section 403(b) plans sponsored by public educational institutions are not eligible for a sales charge exception based on the aggregate investment made by the plan or the number of eligible employees. Purchases of AIM Small Cap Opportunities Fund by such plans are subject to initial sales charges;
o Shareholders of record or discretionary advised clients of any investment advisor holding shares of AIM Weingarten Fund or AIM Constellation Fund on September 8, 1986, or of AIM Charter Fund on November 17, 1986, who have continuously owned shares having a market value of at least $500 and who purchase additional shares of the same Fund;
o Shareholders of record of Advisor Class shares of AIM International Growth Fund or AIM Worldwide Growth Fund on February 12, 1999 who have continuously owned shares of the AIM Funds.
o Unitholders of G/SET series unit investment trusts investing proceeds from such trusts in shares of AIM Weingarten Fund or AIM Constellation Fund; provided, however, prior to the termination date of the trusts, a unitholder may invest proceeds from the redemption or repurchase of his units only when the investment in shares of AIM Weingarten Fund and AIM Constellation Fund is effected within 30 days of the redemption or repurchase;
o A shareholder of a fund that merges or consolidates with an AIM Fund or that sells its assets to an AIM Fund in exchange for shares of an AIM Fund;
o Shareholders of the GT Global funds as of April 30, 1987 who since that date continually have owned shares of one or more of these funds;
o Certain former AMA Investment Advisers' shareholders who became shareholders of the AIM Global Health Care Fund in October 1989, and who have continuously held shares in the GT Global funds since that time;
o Shareholders of record of Advisor Class shares of an AIM Fund on February 11, 2000 who have continuously owned shares of that AIM Fund, and who purchase additional shares of that AIM Fund;
o Qualified Tuition Programs created and maintained in accordance with Section 529 of the U.S. Internal Revenue Code of 1986, as amended; or
o Participants in select brokerage programs for defined contribution plans and rollover IRAs (including rollover IRAs which accept annual IRA contributions) who purchase shares through an electronic brokerage platform offered by entities with which AIM Distributors has entered into a written agreement.
As used above, immediate family includes an individual and his or her spouse or domestic partner, children, parents and parents of spouse or domestic partner.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS
Former GT Global funds Class A shares that are subject to a contingent deferred sales charge and that were purchased before June 1, 1998 are entitled to the following waivers from the contingent deferred sales charge otherwise due upon redemption: (1) minimum required distributions made in connection with an IRA, Keogh Plan or custodial account under Section 403(b) of the Code or other retirement plan following attainment of age 70 1/2; (2) total or partial redemptions resulting from a distribution following retirement in the case of a tax-qualified employer-sponsored retirement plan; (3) when a redemption results from a tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5) of the Code or from the death or disability of the employee; (4) redemptions pursuant to a Fund's right to liquidate a shareholder's account involuntarily; (5) redemptions pursuant to distributions from a tax-qualified employer-sponsored retirement plan, which is invested in the former GT Global funds, which are permitted to be made without penalty pursuant to the Code, other than tax-free rollovers or transfers of assets, and the proceeds of which are reinvested in the former GT Global funds; (6) redemptions made in connection with participant-directed exchanges between options in an employer-sponsored benefit plan; (7) redemptions made for the purpose of providing cash to fund a loan to a participant in a tax-qualified retirement plan; (8) redemptions made in connection with a distribution from any retirement plan or account that is permitted in accordance with the provisions of Section 72(t)(2) of the Code, and the regulations promulgated thereunder; (9) redemptions made in connection with a distribution from any
retirement plan or account that involves the return of an excess deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code; (10) redemptions made in connection with a distribution from a qualified profit-sharing or stock bonus plan described in Section 401(k) of the Code to a participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon hardship of the covered employee (determined pursuant to Treasury Regulation Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of certain states, counties or cities, or any instrumentalities, departments or authorities thereof where such entities are prohibited or limited by applicable law from paying a sales charge or commission.
Former GT Global funds Class B shares purchased before June 1, 1998 are
subject to the following waivers from the contingent deferred sales charge
otherwise due upon redemption in addition to the waivers provided for
redemptions of currently issued Class B shares as described in a Prospectus: (1)
total or partial redemptions resulting from a distribution following retirement
in the case of a tax-qualified employer-sponsored retirement; (2) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (3) redemptions pursuant to distributions from a
tax-qualified employer-sponsored retirement plan, which is invested in the
former GT Global funds, which are permitted to be made without penalty pursuant
to the Code, other than tax-free rollovers or transfers of assets, and the
proceeds of which are reinvested in the former GT Global funds; (4) redemptions
made in connection with participant-directed exchanges between options in an
employer-sponsored benefit plan; (5) redemptions made for the purpose of
providing cash to fund a loan to a participant in a tax-qualified retirement
plan; (6) redemptions made in connection with a distribution from any retirement
plan or account that is permitted in accordance with the provisions of Section
72(t)(2) of the Code, and the regulations promulgated thereunder; (7)
redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (8) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
CDSCs will not apply to the following:
o Additional purchases of Class C shares of AIM International Value Fund and AIM Real Estate Fund by shareholders of record on April 30, 1995, of these Funds, except that shareholders whose broker-dealers maintain a single omnibus account with AFS on behalf of those shareholders, perform sub-accounting functions with respect to those shareholders, and are unable to segregate shareholders of record prior to April 30, 1995, from shareholders whose accounts were opened after that date will be subject to a CDSC on all purchases made after March 1, 1996;
o Redemptions following the death or post-purchase disability of
(1) any registered shareholders on an account or (2) a settlor
of a living trust, of shares held in the account at the time
of death or initial determination of post-purchase disability;
o Certain distributions from individual retirement accounts,
Section 403(b) retirement plans, Section 457 deferred
compensation plans and Section 401 qualified plans, where
redemptions result from (i) required minimum distributions to
plan participants or beneficiaries who are age 70-1/2 or
older, and only with respect to that portion of such
distributions that does not exceed 12% annually of the
participant's or beneficiary's account value in a particular
AIM Fund; (ii) in kind transfers of assets where the
participant or beneficiary notifies the distributor of the
transfer no later than the time the transfer occurs; (iii)
tax-free rollovers or transfers of assets to another plan of
the type described above invested in Class B or Class C shares
of one or more of the AIM Funds; (iv) tax-free returns of
excess contributions or returns of excess deferral amounts;
and (v) distributions
on the death or disability (as defined in the Internal Revenue Code of 1986, as amended) of the participant or beneficiary;
o Amounts from a Systematic Withdrawal Plan of up to an annual amount of 12% of the account value on a per fund basis, at the time the withdrawal plan is established, provided the investor reinvests his dividends;
o Liquidation by the Fund when the account value falls below the minimum required account size of $500;
o Investment account(s) of AIM;
o Class C shares where the investor's dealer of record notifies the distributor prior to the time of investment that the dealer waives the payment otherwise payable to him; and
o Redemptions of Class C shares, where such redemptions are in connection with employee terminations or withdrawals from (i) a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Code; and (ii) a 457 plan, even if more than one beneficiary or participant is involved.
Upon the redemption of shares of funds in sales charge Categories I and II (see "Sales Charges and Dealer Concessions") purchased in amounts of $1 million or more, no CDSC will be applied in the following situations:
o Shares held more than 18 months;
o Redemptions from employee benefit plans designated as qualified purchasers, as defined above, where the redemptions are in connection with employee terminations or withdrawals, provided the total amount invested in the plan is at least $1,000,000; the sponsor signs a $1 million LOI; or the employer-sponsored plan has at least 100 eligible employees; provided, however, that 403(b) plans sponsored by public educational institutions shall qualify for the CDSC waiver on the basis of the value of each plan participant's aggregate investment in the AIM Funds, and not on the aggregate investment made by the plan or on the number of eligible employees;
o Private foundations or endowment funds;
o Redemption of shares by the investor where the investor's dealer waives the amounts otherwise payable to it by the distributor and notifies the distributor prior to the time of investment; and
o Shares acquired by exchange from Class A shares of funds in sales charge Categories I and II unless the shares acquired by exchange are redeemed within 18 months of the original purchase of the Class A shares.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner by which shares of each Fund may be purchased appears in the Prospectus under the heading "Purchasing Shares-How to Purchase Shares."
The sales charge normally deducted on purchases of Class A shares of the Funds is used to compensate AIM Distributors and participating dealers for their expenses incurred in connection with the distribution of such shares. Since there is little expense associated with unsolicited orders placed directly
with AIM Distributors by persons who, because of their relationship with the Funds or with AIM and its affiliates, are familiar with the Funds, or whose programs for purchase involve little expense (e.g., because of the size of the transaction and shareholder records required), AIM Distributors believes that it is appropriate and in the Funds' best interests that such persons be permitted to purchase Class A shares of the Funds through AIM Distributors without payment of a sales charge. The persons who may purchase Class A shares of the Funds without a sales charge are listed under the caption "Reductions in Initial Sales Charges - Purchases at Net Asset Value." You may also be charged a transaction or other fee by the financial institution managing your account.
Complete information concerning the method of exchanging shares of the Funds for shares of the other AIM Funds is set forth in the Prospectus under the heading "Exchanging Shares."
Information concerning redemption of the Funds' shares is set forth in each Fund's Prospectus under the caption "Redeeming Shares." Shares of the AIM Funds may be redeemed directly through AIM Distributors or through any dealer who has entered into an agreement with AIM Distributors. In addition to the Funds' obligation to redeem shares, AIM Distributors may also repurchase shares as an accommodation to shareholders. To effect a repurchase, those dealers who have executed Selected Dealer Agreements with AIM Distributors must phone orders to the order desk of the Fund telephone: or (800) 347-4246 and guarantee delivery of all required documents in good order. A repurchase is effected at the net asset value of the Fund next determined after such order is received. Such arrangement is subject to timely receipt by AFS of all required documents in good order. If such documents are not received within a reasonable time after the order is placed, the order is subject to cancellation. While there is no charge imposed by the Funds or by AIM Distributors (other than any applicable CDSC) when shares are redeemed or repurchased, dealers may charge a fair service fee for handling the transaction. AIM intends to redeem all shares of the Funds in cash.
The right of redemption may be suspended or the date of payment postponed when (a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of a Fund not reasonably practicable.
BACKUP WITHHOLDING
Accounts submitted without a correct, certified taxpayer identification number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for non-resident aliens) or Form W-9 (certifying exempt status) accompanying the registration information will generally be subject to backup withholding.
Each AIM Fund, and other payers, must, according to IRS regulations, withhold 31% of redemption payments and reportable dividends (whether paid or accrued) in the case of any shareholder who fails to provide the Fund with a taxpayer identification number ("TIN") and a certification that he is not subject to backup withholding; however, The Economic Growth and Tax Relief Reconciliation Act of 2001 reduces the backup withholding rate to 30.5% for distributions made after August 6, 2001, and further provides for a phased reduction to 28% for years 2006 and thereafter.
An investor is subject to backup withholding if:
(1) the investor fails to furnish a correct TIN to the Fund, or
(2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
(3) the investor or the Fund is notified by the IRS that the investor is subject to backup withholding because the investor failed to report all of the interest and dividends on such investor's tax return (for reportable interest and dividends only), or
(4) the investor fails to certify to the Fund that the investor is not subject to backup withholding under (3) above (for reportable interest and dividend accounts opened after 1983 only), or
(5) the investor does not certify his TIN. This applies only to non-exempt mutual fund accounts opened after 1983.
Interest and dividend payments are subject to backup withholding in all five situations discussed above. Redemption proceeds and long-term gain distributions are subject to backup withholding only if (1), (2) or (5) above applies.
Certain payees and payments are exempt from backup withholding and information reporting. A complete listing of such exempt entities appears in the Instructions for the Requester of Form W-9 (which can be obtained from the IRS) and includes, among others, the following:
o a corporation
o an organization exempt from tax under Section 501(a), an individual retirement plan (IRA), or a custodial account under Section 403(b)(7)
o the United States or any of its agencies or instrumentalities
o a state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities
o a foreign government or any of its political subdivisions, agencies or instrumentalities
o an international organization or any of its agencies or instrumentalities
o a foreign central bank of issue
o a dealer in securities or commodities required to register in the U.S. or a possession of the U.S.
o a futures commission merchant registered with the Commodity Futures Trading Commission
o a real estate investment trust
o an entity registered at all times during the tax year under the 1940 Act
o a common trust fund operated by a bank under Section 584(a)
o a financial institution
o a middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List
o a trust exempt from tax under Section 664 or described in Section 4947
Investors should contact the IRS if they have any questions concerning entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN will be subject to a $50 penalty imposed by the IRS unless such failure is due to reasonable cause and not willful neglect. If an investor falsifies information on this form or makes any other false statement resulting in no backup withholding on an account which should be subject to backup withholding, such investor may be
subject to a $500 penalty imposed by the IRS and to certain criminal penalties including fines and/or imprisonment.
NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are not subject to the backup withholding previously discussed, but must certify their foreign status by attaching IRS Form W-8 to their application. Form W-8 generally remains in effect for a period starting on the date the Form is signed and ending on the last day of the third succeeding calendar year. Such shareholders may, however, be subject to federal income tax withholding at a 30% rate on ordinary income dividends and distributions and return of capital distributions. Under applicable treaty law, residents of treaty countries may qualify for a reduced rate of withholding or a withholding exemption.
NET ASSET VALUE DETERMINATION
The net asset value per share of each Fund is normally determined once daily as of the close of the customary trading session of the NYSE (generally 4:00 p.m. Eastern time) on each business day of the Fund. In the event the NYSE closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, the net asset value of a Fund share is determined as of the close of the NYSE on such day. Net asset value per share is determined by dividing the value of each Fund's securities, cash and other assets (including interest accrued but not collected) attributable to a particular class, less all its liabilities (including accrued expenses and dividends payable) attributable to that class, by the total number of shares outstanding of that class. Determination of each Fund's net asset value per share is made in accordance with generally accepted accounting principles.
Each security (excluding convertible bonds) held by a Fund is valued at its last sales price on the exchange where the security is principally traded or, lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not including securities reported on the NASDAQ National Market System) is valued at the closing bid price furnished by independent pricing services or market makers for such securities. Each security reported on the NASDAQ National Market System is valued at the last sales price on the valuation date or absent a last sales price, at the closing bid price on that day. Debt securities are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees. Short-term obligations having 60 days or less to maturity are valued on the basis of amortized cost. For purposes of determining net asset value per share, futures and options contracts generally will be valued 15 minutes after the close of the customary trading session of the NYSE.
Generally, trading in foreign securities, corporate bonds, U.S. Government securities and money market instruments is substantially completed each day at various times prior to the close of the customary trading session of the NYSE. The values of such securities used in computing the net asset value of each Fund's shares are determined at such times. Foreign currency exchange rates are also generally determined prior to the close of the customary trading session of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which such values are determined and the close of the customary trading session of the NYSE which will not be reflected in the computation of a Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees of the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
Income dividends and capital gain distributions are automatically reinvested in additional shares of the same class of each Fund unless the shareholder has requested in writing to receive such dividends and distributions in cash or that they be invested in shares of another AIM Fund, subject to the terms and conditions set forth in "Shareholder Information-Purchasing Shares-Special Plans-Automatic Dividend Investment." If a shareholder's account does not have any shares in it on a dividend or capital gain distribution payment date, the dividend or distribution will be paid in cash whether or not the shareholder has elected to have such dividends or distributions reinvested.
TAX MATTERS
The following is only a summary of certain additional tax considerations generally affecting the Funds and their shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of each Fund or its shareholders, and the discussion here and in the Prospectus is not intended as a substitute for careful tax planning.
TAXATION OF THE FUNDS
Each Fund is treated as a separate corporation for federal income tax purposes. To continue to qualify for treatment as a regulated investment company ("RIC") under the Code, each Fund must distribute to its shareholders for each taxable year at least 90% of its investment company taxable income (consisting generally of net investment income, net short-term capital gain and net gains from certain foreign currency transactions) ("Distribution Requirement") and must meet several additional requirements. With respect to each Fund, these requirements include the following: (1) the Fund must derive at least 90% of its gross income each taxable year from dividends, interest, payments with respect to securities loans and gains from the sale or other disposition of securities or foreign currencies, or other income (including gains from options, futures or forward contracts) derived with respect to its business of investing in securities or those currencies ("Income Requirement"); and (2) the Diversification Requirements.
By qualifying for treatment as a RIC, each Fund (but not its shareholders) will be relieved of federal income tax on the part of its investment company taxable income and net capital gain (the excess of net long-term capital gain over net short-term capital loss) that it distributes to its shareholders. If a Fund failed to qualify for treatment as a RIC for any taxable year, (1) it would be taxed as an ordinary corporation on the full amount of its taxable income for that year without being able to deduct the distributions it makes to its shareholders and (2) the shareholders would treat all those distributions, including distributions of net capital gain, as dividends (that is, ordinary income) to the extent of the Fund's earnings and profits. In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying for RIC treatment.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the extent it fails to distribute by the end of any calendar year substantially all of its ordinary income for that year and capital gain net income for the one-year period ending on October 31 of that year, plus certain other amounts.
See "Taxation of Certain Investment Activities" below for a discussion of the tax consequences to each Fund of hedging transactions engaged in, and investments in passive foreign investment companies ("PFICs") and other foreign securities.
EXCHANGE AND REINSTATEMENT PRIVILEGES AND WASH SALES
If a shareholder disposes of a Fund's shares ("original shares") within
90 days after purchase thereof and subsequently reacquires shares of that Fund
or acquires shares of another AIM Fund on which a sales charge normally is
imposed ("replacement shares"), without paying the sales charge (or paying a
reduced charge) due to an exchange privilege or a reinstatement privilege, then
(1) any gain on the disposition of the original shares will be increased, or the
loss thereon decreased, by the amount of the sales charge paid when those shares
were acquired and (2) that amount will increase the adjusted basis of the
replacement shares that were subsequently acquired. In addition, if a
shareholder purchases shares of a Fund (whether pursuant to the reinstatement
privilege or otherwise) within 30 days before or after redeeming at a loss other
shares of that Fund (regardless of class), all or part of that loss will not be
deductible and instead will increase the basis of the newly purchased shares.
TAXATION OF CERTAIN INVESTMENT ACTIVITIES
Foreign Taxes. Dividends and interest received by a Fund, and gains realized thereby, may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions ("foreign taxes") that would reduce the yield and/or total return on its securities. Tax conventions between certain countries and the United States may reduce or eliminate foreign taxes, however, and many foreign countries do not impose taxes on capital gains in respect of investments by foreign investors. If more than 50% of the value of a Fund's total assets at the close of its taxable year consists of securities of foreign corporations, the Fund will be eligible to, and may, file an election with the Internal Revenue Service that will enable its shareholders, in effect, to receive the benefit of the foreign tax credit with respect to any foreign taxes paid by it (a "Fund's foreign taxes"). Pursuant to the election, a Fund would treat those taxes as dividends paid to its shareholders and each shareholder would be required to (1) include in gross income, and treat as paid by him, his share of the Fund's foreign taxes, (2) treat his share of those taxes and of any dividend paid by the Fund that represents its income from foreign and U.S. possessions sources as his own income from those sources and (3) either deduct the taxes deemed paid by him in computing his taxable income or, alternatively, use the foregoing information in calculating the foreign tax credit against his federal income tax. Each Fund will report to its shareholders shortly after each taxable year their respective shares of the Fund's foreign taxes and income from sources within foreign countries and U.S. possessions if it makes this election. Pursuant to the Taxpayer Relief Act of 1997 ("Tax Act"), individuals who have no more than $300 ($600 for married persons filing jointly) of creditable foreign taxes included on Form 1099 and all of whose foreign source of income is "qualified passive income" may elect each year to be exempt from the foreign tax credit limitation and will be able to claim a foreign tax credit without having to file the Form 1116 that otherwise is required.
Passive Foreign Investment Companies. Each Fund may invest in the stock of passive foreign investment companies ("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in general, meets either of the following tests: (1) at least 75% of its gross income is passive or (2) an average of at least 50% of its assets produce, or are held for the production of, passive income. Under certain circumstances, a Fund will be subject to federal income tax on a part of any "excess distribution" received by it on the stock of a PFIC or of any gain on the Fund's disposition of that stock (collectively "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to it to the extent it distributes that income to its shareholders.
If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified electing fund" ("QEF"), then in lieu of the foregoing tax and interest obligation, the Fund would be required to include in income each year its pro rata share of the QEF's ordinary earnings and net capital gain which most likely would have to be distributed by the Fund to satisfy the Distribution Requirement and avoid imposition of the Excise Tax--even if those earnings and gain were not received thereby from the QEF. In most instances it will be very difficult, if not impossible, to make this election because of certain requirements thereof.
A holder of stock in any PFIC may elect to include in ordinary income for each taxable year beginning after 1997 the excess, if any, of the fair market value of the stock over the adjusted basis
therein as of the end of that year. Pursuant to the election, a deduction (as an ordinary, not capital, loss) also will be allowed for the excess, if any, of the holder's adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock included in income for prior taxable years. The adjusted basis in each PFIC's stock subject to the election will be adjusted to reflect the amounts of income included and deductions taken thereunder. Regulations proposed in 1992 provided a similar election with respect to the stock of certain PFICs.
Options, Futures and Foreign Currency Transactions. The Funds' use of hedging transactions, such as selling (writing) and purchasing options and futures and entering into forward contracts, involves complex rules that will determine, for federal income tax purposes, the amount, character and timing of recognition of the gains and losses a Fund realizes in connection therewith. Gains from the disposition of foreign currencies (except certain gains that may be excluded by future regulations), and gains from options, futures and forward contracts derived by a Fund with respect to its business of investing in securities or foreign currencies, will qualify as permissible income under the Income Requirement for that Fund.
Futures and forward contracts that are subject to section 1256 of the Code (other than those that are part of a "mixed straddle") ("Section 1256 Contracts") and that are held by a Fund at the end of its taxable year generally will be deemed to have been sold at that time at market value for federal income tax purposes. Sixty percent of any net gain or loss recognized on these deemed sales, and 60% of any net gain or loss realized from any actual sales of Section 1256 Contracts, will be treated as long-term capital gain or loss, and the balance will be treated as short-term capital gain or loss. That 60% portion will qualify for the reduced maximum tax rates on noncorporate taxpayers' net capital gain--20% (10% for non-corporate taxpayers in the 15% marginal tax bracket) for gain recognized on capital assets held for more than 12 months.
Section 988 of the Code also may apply to gains and losses from transactions in foreign currencies, foreign-currency-denominated debt securities and options, futures and forward contracts on foreign currencies ("Section 988" gains and losses). Each Section 988 gain or loss generally is computed separately and treated as ordinary income or loss. In the case of overlap between Sections 1256 and 988, special provisions determine the character and timing of any income, gain or loss. Each Fund attempts to monitor section 988 transactions to minimize any adverse tax impact.
If a Fund has an "appreciated financial position"--generally, an interest (including an interest through an option, futures or forward contract or short sale) with respect to any stock, debt instrument (other than "straight debt") or partnership interest the fair market value of which exceeds its adjusted basis--and enters into a "constructive sale" of the same or substantially identical property, the Fund will be treated as having made an actual sale thereof, with the result that gain will be recognized at that time unless the closed transaction exception applies. A constructive sale generally consists of a short sale, an offsetting notional principal contract or futures or forward contract entered into by a Fund or a related person with respect to the same or substantially identical property. In addition, if the appreciated financial position is itself a short sale or such a contract, acquisition of the underlying property or substantially identical property will be deemed a constructive sale.
Legislation enacted in 1997 lowers the maximum capital gain tax rate from 20% to 18% with respect to capital assets which are held for five years and for which the holding period begins after December 31, 2000. In connection with this new legislation, a Fund may make an election to treat any readily tradable stock it holds on January 1, 2001, as having been sold and reacquired on January 2, 2001, at this closing market price on that date and to treat any other security in its portfolio as having been sold and reacquired on January 1 for an amount equal to its fair market value on that date. If a Fund makes any such election, (when it files its tax return), it will recognize gain, but not loss, on the deemed sale, which may cause a Fund to increase the amount of distributions that the Fund will make in comparison to a fund that did not make such an
election. The Funds have not yet determined whether they will make this election with respect to any stock or securities in their respective portfolios.
TAXATION OF THE FUNDS' SHAREHOLDERS
Dividends and other distributions declared by a Fund in, and payable to shareholders of record as of a date in, October, November or December of any year will be deemed to have been paid by the Fund and received by the shareholders on December 31 of that year if the distributions are paid by the Fund during the following January. Accordingly, those distributions will be taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from a Fund's investment company taxable income (whether paid in cash or reinvested in additional shares) may be eligible for the dividends-received deduction allowed to corporations. The eligible portion may not exceed the aggregate dividends received by that Fund from U.S. corporations. However, dividends received by a corporate shareholder and deducted by it pursuant to the dividends-received deduction are subject indirectly to the federal alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as long-term, instead of short-term, capital loss to the extent of any capital gain distributions received on those shares. Investors also should be aware that if shares are purchased shortly before the record date for any dividend or other distribution, the shareholder will pay full price for the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by a Fund to a shareholder who, as to the United States, is a nonresident alien individual, nonresident alien fiduciary of a trust or estate, foreign corporation or foreign partnership ("foreign shareholder") generally will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate). Withholding will not apply, however, to a dividend paid by a Fund to a foreign shareholder that is "effectively connected with the conduct of a U.S. trade or business," in which case the reporting and withholding requirements applicable to domestic shareholders will apply. A distribution of net capital gain by a Fund to a foreign shareholder generally will be subject to U.S. federal income tax (at the rates applicable to domestic persons) only if the distribution is "effectively connected" or the foreign shareholder is treated as a resident alien individual for federal income tax purposes.
The foregoing is a general and abbreviated summary of certain federal tax considerations affecting the Funds, their shareholders and the Portfolios at the date of this Statement of Additional Information. Investors are urged to consult their own tax advisors for more detailed information and for information regarding any foreign, state and local taxes applicable to distributions received from a Fund.
SHAREHOLDER INFORMATION
This information supplements the discussion in each Fund's Prospectus under the title "Shareholder Information."
GOOD ORDER. Purchase, exchange and redemption orders must be received in good order. To be in good order, an investor must supply the Transfer Agent with all required information and documentation, including signature guarantees when required. In addition, if a purchase of shares is made by check, the check must be received in good order. This means that the check must be properly completed and signed, and legible to the Transfer Agent in its sole discretion.
TIMING OF PURCHASE ORDERS. It is the responsibility of the dealer or other financial intermediary to ensure that all orders are transmitted on a timely basis to the Transfer Agent. Any loss resulting from the dealer's or financial intermediary's failure to submit an order within the prescribed time frame will be borne by that dealer. If a check used to purchase shares does not clear, or if any
investment order must be canceled due to nonpayment, the investor will be responsible for any resulting loss to an AIM Fund or to AIM Distributors.
SHARE CERTIFICATES. AIM Funds will issue share certificates upon written request to AFS. Otherwise, shares are held on the shareholder's behalf and recorded on the Fund books. AIM Funds will not issue certificates for shares held in prototype retirement plans.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer Agent and all dividends and distributions are reinvested in shares of the applicable AIM Fund by the Transfer Agent. To provide funds for payments made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full and fractional shares at their net asset value in effect at the time of each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since such payments are funded by the redemption of shares, they may result in a return of capital and in capital gains or losses, rather than in ordinary income. Because sales charges are imposed on additional purchases of shares (other than Class B or Class C Shares of the AIM Funds and AIM Cash Reserve Share of AIM Money Market Fund), it is disadvantageous to effect such purchases while a Systematic Withdrawal Plan is in effect.
Each AIM Fund bears its share of the cost of operating the Systematic Withdrawal Plan.
TERMS AND CONDITIONS OF EXCHANGE. Normally, shares of an AIM Fund to be acquired by exchange are purchased at their net asset value or applicable offering price, as the case may be, determined on the date that such request is received, but under unusual market conditions such purchases may be delayed for up to five business days if it is determined that a fund would be materially disadvantaged by an immediate transfer of the proceeds of the exchange. If a shareholder is exchanging into a fund paying daily dividends, and the release of the exchange proceeds is delayed for the foregoing five-day period, such shareholder will not begin to accrue dividends until the sixth business day after the exchange.
EXCHANGES BY TELEPHONE. AIM Distributors has made arrangements with certain dealers and investment advisory firms to accept telephone instructions to exchange shares between any of the AIM Funds. AIM Distributors reserves the right to impose conditions on dealers or investment advisors who make telephone exchanges of shares of the funds, including the condition that any such dealer or investment advisor enter into an agreement (which contains additional conditions with respect to exchanges of shares) with AIM Distributors. To exchange shares by telephone, a shareholder, dealer or investment advisor who has satisfied the foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach AFS by telephone, he may also request exchanges by telegraph or use overnight courier services to expedite exchanges by mail, which will be effective on the business day received by the Transfer Agent as long as such request is received prior to the close of the customary trading session of the NYSE. The Transfer Agent and AIM Distributors may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transaction.
By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent in the designated account(s), or in any other account with any of the AIM Funds, present or future, which has the identical registration as the designated account(s), with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption proceeds to be applied to purchase shares in any one or more of the AIM Funds, provided that such fund is available for sale and provided that the registration and mailing address of the shares to
be purchased are identical to the registration of the shares being redeemed. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone exchange requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transactions. The Transfer Agent reserves the right to modify or terminate the telephone exchange privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any exchanges must be effected in writing by the investor.
REDEMPTIONS BY TELEPHONE. By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent in the designated account(s), present or future, with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone redemption requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transaction. The Transfer Agent reserves the right to cease to act as attorney-in-fact subject to this appointment, and AIM Distributors reserves the right to modify or terminate the telephone redemption privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any redemptions must be effected in writing by the investor.
SIGNATURE GUARANTEES. In addition to those circumstances listed in the "Shareholder Information" section of each Fund's prospectus, signature guarantees are required in the following situations: (1) requests to transfer the registration of shares to another owner; (2) telephone exchange and telephone redemption authorization forms; (3) changes in previously designated wiring or electronic funds transfer instructions; and (4) written redemptions or exchanges of shares previously reported as lost, whether or not the redemption amount is under $250,000 or the proceeds are to be sent to the address of record. AIM Funds may waive or modify any signature guarantee requirements at any time.
Acceptable guarantors include banks, broker-dealers, credit unions, national securities exchanges, savings associations and any other organization, provided that such institution or organization qualifies as an "eligible guarantor institution" as that term is defined in rules adopted by the SEC, and further provided that such guarantor institution is listed in one of the reference guides contained in the Transfer Agent's current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. The Transfer Agent will also accept signatures with either: (1) a signature guaranteed with a medallion stamp of the STAMP Program, or (2) a signature guaranteed with a medallion stamp of the NYSE Medallion Signature Program, provided that in either event, the amount of the transaction involved does not exceed the surety coverage amount indicated on the medallion. For information regarding whether a particular institution or organization qualifies as an "eligible guarantor institution," an investor should contact the Client Services Department of AFS.
TRANSACTIONS BY INTERNET. An investor may effect transactions in his account through the Internet by selecting the AIM Internet Connect option on his completed account application form or completing an AIM Internet Connect Authorization Form. By signing either form the investor acknowledges and agrees that the Transfer Agent and AIM Distributors will not be liable for any loss,
expense or cost arising out of any internet transaction effected in accordance with the instructions set forth in the forms if they reasonably believe such request to be genuine. Procedures for verification of internet transactions include requests for confirmation of the shareholder's personal identification number and mailing of confirmations promptly after the transactions. The investor also acknowledges that (1) if he no longer wants the AIM Internet Connect option, he will notify the Transfer Agent in writing, and (2) the AIM Internet Connect option may be terminated at any time by the AIM Funds.
DIVIDENDS AND DISTRIBUTIONS. In determining the amount of capital gains, if any, available for distribution, net capital gains are offset against available net capital losses, if any, carried forward from previous fiscal periods.
For funds that do not declare a dividend daily, such dividends and distributions will be reinvested at the net asset value per share determined on the ex-dividend date. For funds that declare a dividend daily, such dividends and distributions will be reinvested at the net asset value per share determined on the payable date.
Dividends on Class B and Class C shares are expected to be lower than those for Class A shares or AIM Cash Reserve Shares because of higher distribution fees paid by Class B and Class C shares. Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the shareholder at any time by notice to the Transfer Agent and are effective as to any subsequent payment if such notice is received by the Transfer Agent prior to the record date of such payment. Any dividend and distribution election remains in effect until the Transfer Agent receives a revised written election by the shareholder.
Any dividend or distribution paid by a fund which does not declare dividends daily has the effect of reducing the net asset value per share on the ex-dividend date by the amount of the dividend or distribution. Therefore, a dividend or distribution declared shortly after a purchase of shares by an investor would represent, in substance, a return of capital to the shareholder with respect to such shares even though it would be subject to income taxes.
MISCELLANEOUS INFORMATION
CHARGES FOR CERTAIN ACCOUNT INFORMATION
The Transfer Agent may impose certain copying charges for requests for copies of shareholder account statements and other historical account information older than the current year and the immediately preceding year.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110, is custodian of all securities and cash of the Funds. The Custodian attends to the collection of principal and income, pays and collects all monies for securities bought and sold by the Funds and performs certain other ministerial duties. The Custodian is authorized to establish separate accounts in foreign countries and to cause foreign securities owned by the Funds to be held outside the United Sates in branches of U.S. banks and, to the extent permitted by applicable regulations, in certain foreign banks and securities depositories. AIM Fund Services, Inc., a wholly owned subsidiary of AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer and dividend disbursing agent for the Funds. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets. The Funds pay the Transfer Agent such compensation as may be agreed upon from time to time.
Chase Bank of Texas, N.A., 712 Main, Houston, Texas 77002, serves as Sub-Custodian for retail purchases of the AIM Funds. The Bank of New York also serves as Sub-Custodian to facilitate case management.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), 800 Scudders Mill Road, Plainsboro, New Jersey 08536, has entered into an agreement with the Trust (and certain other AIM Funds), PFPC Inc. (formerly known as First Data Investor Service Group) and Financial Data Services, Inc., pursuant to which MLPF&S has agreed to perform certain shareholder sub-accounting services for its customers who beneficially own shares of the Fund(s).
INDEPENDENT ACCOUNTANTS
The Trust's and the Funds' independent accountants are PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110, conducts annual audits of the Funds' financial statements, assists in the preparation of each Fund's federal and state income tax returns and consults with the Trust as to matters of accounting, regulatory filings, and federal and state income taxation.
The audited financial statements of the Trust included in this Statement of Additional Information have been examined by PricewaterhouseCoopers LLP, as stated in their opinion appearing herein, and are included in reliance upon such opinion given upon the authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
The law firm of Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103, acts as counsel to the Trust and the Funds.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations extended to shareholders of private, for-profit corporations. There is a remote possibility, however, that under certain circumstances shareholders of the Trust may be held personally liable for the Trust's obligations. However, the Trust Agreement disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or a trustee. If a shareholder is held personally liable for the obligations of the Trust, the Trust Agreement provides that the shareholder shall be entitled out of the assets belonging to the applicable Fund (or allocable to the applicable Class), to be held harmless from and indemnified against all loss and expense arising from such liability in accordance with the Trust's Bylaws and applicable law. Thus, the risk of a shareholder incurring financial loss on account of such liability is
limited to circumstances in which the Trust itself would be unable to meet its obligations and where the other party was held not to be bound by the disclaimer.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
To the best knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding shares of any class of each Fund's equity securities as of October 1, 2001, and the percentage of the outstanding shares held by such holders are set forth below:
A shareholder who owns beneficially 25% or more of the outstanding securities of a Fund is presumed to "control" that Fund as defined in the 1940 Act. Such control may affect the voting rights of other shareholders.
BIOTECH FUND
AIM provided the initial capitalization of the Fund and, accordingly, as of the date of this Statement of Additional Information, owned more than 25% of the issued and outstanding shares of the Fund and therefore could be deemed to "control" the Fund as that term is defined in the 1940 Act. It is anticipated that after commencement of the public offering of the Fund's shares, AIM will cease to control the Fund for purposes of the 1940 Act.
PERCENT PERCENT
OWNED OF OWNED OF
NAME AND ADDRESS RECORD RECORD AND
FUND OF RECORD OWNER ONLY* BENEFICIALLY
---- --------------- -------- ------------
Financial Services Fund -
Class A Merrill Lynch Pierce Fenner & Smith 15.36% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Financial Services Fund -
Class B Merrill Lynch Pierce Fenner & Smith 11.65% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Financial Services Fund -
Class C Merrill Lynch Pierce Fenner & Smith 18.28% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially.
PERCENT PERCENT
OWNED OF OWNED OF
NAME AND ADDRESS RECORD RECORD AND
FUND OF RECORD OWNER ONLY* BENEFICIALLY
---- --------------- -------- ------------
Health Care Fund -
Class A Merrill Lynch Pierce Fenner & Smith 11.48% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Health Care Fund -
Class B Merrill Lynch Pierce Fenner & Smith 6.93% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Health Care Fund -
Class C Merrill Lynch Pierce Fenner & Smith 10.25% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Infrastructure Fund -
Class A Merrill Lynch Pierce Fenner & Smith 6.58% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Infrastructure Fund -
Class C ITC CUST Rollover IRA FBO -0- 15.36%
David D. Neitzel
10012-63 Ave.
Pleasant Prairie, WI 53158
Donaldson Lufkin Jenrette 6.61% -0-
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
ANTC CUST 403B Plan 5.76%
CUNY FBO
Hershey Harry Friedman
1367 57 St.
Brooklyn, NY 11219
ANTC CUST Rollover IRA FBO 5.28%
Maureen B. Graves
75 Fortune Ln.
St. Louis, MO 63122
ANTC CUST 403B 5.14%
FBO
Brooke D. Schuster
2861 S. Dorchestor
Columbus, OH 43221
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially.
PERCENT PERCENT
OWNED OF OWNED OF
NAME AND ADDRESS RECORD RECORD AND
FUND OF RECORD OWNER ONLY* BENEFICIALLY
---- --------------- -------- ------------
Energy Fund -
Class A Merrill Lynch Pierce Fenner & Smith 8.91% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East, 2nd Floor
Jacksonville, FL 32246
Energy Fund -
Class B Merrill Lynch Pierce Fenner & Smith 10.17% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Energy Fund -
Class C Merrill Lynch Pierce Fenner & Smith 28.19% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
NFSC/FMTC IRA FBO -0- 7.64%
Victor Gregory
4707 Albert Road
Bensalem, PA 19020
ANTC CUST Rollover IRA FBO -0- 6.81%
David L. Hayward
7602 20th Ave.
Kenosha, WI 53140
Donaldson Lufkin Jenrette 5.10% -0-
Securities Corporation Inc.
P. O. Box 2052
Jersey City, NJ 07303-9998
Telecommunications and Technology Fund -
Class A Merrill Lynch Pierce Fenner & Smith 9.22% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Telecommunications and Technology Fund -
Class B Merrill Lynch Pierce Fenner & Smith 5.51% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
Telecommunications and Technology Fund -
Class C Merrill Lynch Pierce Fenner & Smith 9.89% -0-
FBO The Sole Benefit of Customers
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially.
As of October 1, 2001, the trustees and officers of the Trust owned beneficially less than 1% of the outstanding shares of each class of any Fund.
INVESTMENT RESULTS
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return is as follows:
P(1+T)(n)= ERV
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the
applicable maximum sales load is deducted at the
beginning of the 1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the 1, 5, or 10 year periods
(or fractional portion of such period).
|
The standardized returns for the Class A shares for each of the named Funds, stated as average annual total returns for the one-year, five-year and ten-year periods ended April 30, 2001, (which include the maximum sales charge of 4.75% and reinvestment of all dividends and distributions), were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 12.06% 17.82% N/A 15.57%
Health Care Fund.................................... 32.09% 15.74% 14.02% 15.60%
Infrastructure Fund................................. (31.16)% 3.36% N/A 5.56%
Energy Fund......................................... 8.86% (2.10)% N/A 3.28%
Telecommunications and Technology Fund.............. (63.91)% (2.42)% N/A 5.45%
|
* The inception dates for Class A shares of the Funds are as follows:
Biotech Fund, 12/31/01, Financial Services Fund 05/31/94, Health Care
Fund 08/07/89, Infrastructure Fund 05/31/94, Energy Fund 05/31/94 and
Telecommunications and Technology Fund 01/27/92.
The standardized returns for the Class B shares for each of the named Funds, stated as average annual total returns for the one-year, five-year and ten-year periods ended April 30, 2001, (which deduct the maximum applicable contingent deferred sales charge on the redemption of shares held for the period and include reinvestment of all dividends and distributions), were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 12.03% 18.20% N/A 15.82%
Health Care Fund.................................... 33.01% 16.08% N/A 18.37%
Infrastructure Fund................................. (31.06)% 3.56% N/A 5.77%
Energy Fund......................................... 8.79% (1.98)% N/A 3.49%
Telecommunications and Technology Fund.............. (63.85)% (2.19)% N/A 4.86%
|
* The inception dates for Class B shares of the Funds are as follows:
Biotech Fund, 12/31/01, Financial Services Fund 05/31/94, Health Care
Fund 04/01/93, Infrastructure Fund 05/31/94, Energy Fund 05/31/94 and
Telecommunications and Technology Fund 04/01/93.
The standardized returns for the Class C shares for each of the named Funds, stated as average annual total returns for the one-year, five-year and ten-year periods ended April 30, 2001, (which include the maximum sales charge of 4.75% and reinvestment of all dividends and distributions), were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 16.03% N/A N/A 18.31%
Health Care Fund.................................... 36.95% N/A N/A 21.34%
Infrastructure Fund................................. (28.76)% N/A N/A 31.64%
Energy Fund......................................... 12.87% N/A N/A 14.72%
Telecommunications and Technology Fund.............. (62.58)% N/A N/A (14.80)%
|
* The inception dates for Class C shares of Financial Services Fund, Health Care Fund, Infrastructure Fund, Energy Fund and Telecommunications and Technology Fund is 03/01/99 and for Biotech Fund is 12/31/01.
Standard total return quotes may be accompanied by total return figures calculated by alternative methods. For example, average annual total return may be calculated without assuming payment of the full sales load according to the following formula:
P(1+U)(n) = ERV
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of
only a stated portion of, or none of, the applicable
maximum sales load at the beginning of the stated
period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment
at the end of the stated period.
|
The non-standardized returns for Class A shares for each of the named Funds (not taking the sales charges into account and including reinvestment of all dividends and distributions), stated as average annual total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
N/A
Energy.............................................. 14.33% (1.14)% 4.01%
Financial Services Fund............................. 17.62% 18.98% N/A 16.39%
Health Care Fund.................................... 38.66% 16.88% 14.58% 16.08%
Infrastructure...................................... (27.72)% 4.36% N/A 6.30%
Telecommunications and Technology Fund.............. (62.11)% (1.47)% N/A 6.01%
|
* The inception dates for Class A shares of the Funds are as follows:
Financial Services Fund 05/31/94, Health Care Fund 08/07/89 and
Telecommunications and Technology Fund 01/27/92.
The non-standardized returns for Class B shares for each of the named Funds (not taking the sales charges into account), stated as average annual total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Health Care Fund.................................... 38.01% 16.30% N/A 18.37%
Telecommunications and Technology Fund.............. (62.28)% (1.95)% N/A 4.86%
|
* The inception dates for Class B shares of the Funds are as follows:
Health Care Fund 04/01/93 and Telecommunications and Technology Fund
04/01/93.
The non-standardized returns for Class C shares for each of the named Funds, stated as average annual total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Health Care Fund.................................... 37.95% n/a n/a 21.34%
Telecommunications and Technology Fund.............. (62.27)% n/a n/a (14.80)%
|
* The inception date for Class C shares for Health Care Fund and Telecommunications and Technology Fund is 03/01/99.
Cumulative total return across a stated period may be calculated as follows:
P(1+V)(n) = ERV
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of,
a stated portion of, or none of, the applicable
maximum sales load at the beginning of the stated
period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.
|
The non-standardized returns (not taking sales charges into account) for the Class A shares for each of the named Funds, stated as cumulative total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 17.62% 138.44% N/A 185.64%
Health Care Fund.................................... 38.66% 118.08% 290.00% 474.64%
Infrastructure Fund................................. (27.72)% 23.80% N/A 52.62%
Energy Fund......................................... 14.33% (5.55)% N/A 31.24%
Telecommunications and Technology Fund.............. (62.11)% (7.13)% N/A 71.61%
|
* The inception dates for Class A shares of the Funds are as follows:
Biotech Fund 12/31/01, Financial Services Fund 05/31/94, Health Care
Fund 08/07/89, Infrastructure Fund 05/31/94, Energy Fund 05/31/94 and
Telecommunications and Technology Fund 01/27/92.
The non-standardized returns (not taking sales charges into account) for the Class B shares for each of the named Funds, stated as cumulative total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 17.03% 132.72% N/A 171.08%
Health Care Fund.................................... 38.01% 112.72% N/A 290.73%
Infrastructure Fund................................. (28.09)% 20.70% N/A 47.42%
Energy Fund......................................... 13.79% (7.81)% N/A 26.81%
Telecommunications and Technology Fund.............. (62.28)% (9.37)% N/A 46.71%
|
* The inception dates for Class B shares of the Funds are as follows:
Biotech Fund 12/30/94, Financial Services Fund 05/31/94, Health Care
Fund 04/01/93, Infrastructure Fund 05/31/94, Energy Fund 05/31/94 and
Telecommunications and Technology Fund 04/01/93.
The non-standardized returns (not taking sales charges into account) for the Class C shares for each of the named Funds, stated as cumulative total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 17.03% N/A N/A 43.89%
Health Care Fund.................................... 37.95% N/A N/A 51.99%
Infrastructure Fund................................. (28.16)% N/A N/A 6.97%
Energy Fund......................................... 13.87% N/A N/A 34.60%
Telecommunications and Technology Fund.............. (62.27)% N/A N/A (29.30)%
|
* The inception date for Class C shares of Financial Services Fund, Health Care Fund, Infrastructure Fund, Energy Fund and Telecommunications and Technology Fund is 03/01/99 and of Biotech Fund is 12/31/01.
The standardized returns (which include the maximum sales charge of 4.75% and reinvestment of all dividends and distributions) for the Class A shares for each of the named Funds, stated as cumulative total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 12.06% 127.05% N/A 172.07%
Health Care Fund.................................... 32.09% 107.73% 271.41% 447.33%
Infrastructure Fund................................. (31.16)% 17.94% N/A 45.37%
Energy Fund......................................... 8.86% (10.05)% N/A 25.01%
Telecommunications and Technology Fund.............. (63.91)% (11.53)% N/A 63.46%
|
* The inception dates for Class A shares of each Fund are as follows:
Financial Services Fund 05/31/94, Health Care Fund 08/07/89,
Infrastructure Fund 05/31/94, Energy Fund 05/31/94, and
Telecommunications and Technology Fund 01/27/92.
The standardized returns (which deduct the maximum applicable contingent deferred sales charge on the redemption of shares held for the period and include reinvestment of all dividends and distributions) for the Class B shares for each of the named Funds, stated as cumulative total returns for the one-year, five-year and ten-year periods April 30, 2001 were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 12.03% 130.72% N/A 176.08%
Health Care Fund.................................... 33.01% 110.72% N/A 290.73%
Infrastructure Fund................................. (31.06)% 19.12% N/A 47.42%
Energy Fund......................................... 8.79% (9.52)% N/A 26.81%
Telecommunications and Technology Fund.............. (63.85)% 70.49% N/A 46.71%
|
* The inception dates for Class B shares of each Fund are as follows:
Financial Services Fund 05/31/94, Health Care Fund 04/01/93,
Infrastructure Fund 05/31/94, Energy Fund 05/31/94, and
Telecommunications and Technology Fund 04/01/93.
The standardized returns for the Class C shares for each of the named Funds, stated as cumulative total returns for the one-year, five-year and ten-year periods ended April 30, 2001, were:
ONE FIVE TEN SINCE
YEAR YEARS YEARS INCEPTION*
---- ----- ----- ----------
Biotech Fund........................................ N/A N/A N/A N/A
Financial Services Fund............................. 16.03% N/A N/A 43.89%
Health Care Fund.................................... 36.95% N/A N/A 51.99%
Infrastructure Fund................................. 28.76% N/A N/A 6.97%
Energy Fund......................................... 12.87% N/A N/A 34.60%
Telecommunications and Technology Fund.............. (62.58)% N/A N/A (29.30)%
|
* The inception date for Class C shares of Financial Services Fund, Health Care Fund, Infrastructure Fund, Energy Fund and Telecommunications and Technology Fund is 03/01/99 and Biotech Fund is 12/31/01.
Each Fund's investment results will vary from time to time depending upon market conditions, the composition of each Fund's portfolio and operating expenses of each Fund, so that current or past yield or total return should not be considered representative of what an investment in each Fund may earn in any future period. These factors and possible differences in the methods used in calculating investment results should be considered when comparing each Fund's investment results with those published for other investment companies and other investment vehicles. Each Fund's results also should be considered relative to the risks associated with such Fund's investment objective and policies.
PERFORMANCE INFORMATION
All advertisements of a Fund will disclose the maximum sales charge (including deferred sales charges) imposed on purchases of the Fund's shares. If any advertised performance data does not reflect the maximum sales charge (if any), such advertisement will disclose that the sales charge has not been deducted in computing the performance data, and that, if reflected, the maximum sales charge would reduce the performance quoted. Further information regarding the Fund's performance is contained in the Fund's annual report to shareholders, which is available upon request and without charge.
A Fund's total return is calculated in accordance with a standardized formula for computation of annualized total return. Standardized total return for Class A shares reflects the deduction of the Fund's maximum front-end sales charge at the time of purchase. Standardized total return for Class B and Class C shares reflects the deduction of the maximum applicable contingent deferred sales charge on a redemption of shares held for the period.
A Fund's total return shows its overall change in value, including changes in share price and assuming all the Fund's dividends and capital gain distributions are reinvested. A cumulative total return reflects the Fund's performance over a stated period of time. An average annual total return reflects the hypothetical compounded annual rate of return that would have produced the same cumulative total return if the Fund's performance had been constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the Fund may separate its cumulative and average annual returns into income results and capital gains or losses.
From time to time, AIM or its affiliates may waive all or a portion of their fees and/or assume certain expenses of any Fund. Voluntary fee waivers or reductions or commitments to assume expenses may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions or commitments to assume expenses, AIM will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions or reimbursement of expenses set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM and the Fund. Fee waivers or reductions or commitments to reduce expenses will have the effect of increasing that Fund's yield and total return.
The performance of each Fund will vary from time to time and past results are not necessarily indicative of future results. A Fund's performance is a function of its portfolio management in selecting the type and quality of portfolio securities and is affected by operating expenses of the Fund and market conditions. A shareholder's investment in a Fund is not insured or guaranteed. These factors should be carefully considered by the investor before making an investment in any Fund.
A practice of waiving or reducing fees or reimbursing expenses will have the effect of increasing that Fund's yield and total return. The performance of each Fund will vary from time to time and past results are not necessarily indicative of future results. A Fund's performance is a function of its portfolio management in selecting the type and quality of portfolio securities and is affected by operating expenses
of the Fund and market conditions. A shareholder's investment in a Fund is not insured or guaranteed. These factors should be carefully considered by the investor before making an investment in any Fund.
Some or all of the Funds may participate in the IPO market, and a significant portion of those Funds' returns may be attributable to their investment in IPOs, which have a magnified impact due to the Funds' small asset bases. There is no guarantee that as the Funds' assets grow, they will continue to invest to the same degree in IPOs or that they will experience substantially similar performance.
Total return and yield figures for the Funds are neither fixed nor guaranteed, and no Fund's principal is insured. Performance quotations reflect historical information and should not be considered representative of a Fund's performance for any period in the future. Performance is a function of a number of factors which can be expected to fluctuate. The Funds may provide performance information in reports, sales literature and advertisements. The Funds may also, from time to time, quote information about the Funds published or aired by publications or other media entities which contain articles or segments relating to investment results or other data about one or more of the Funds. Such publications or media entities may include the following, among others:
Advertising Age Fortune New York Times Barron's Global Finance Pension World Best's Review Hartford Courant Inc. Pensions & Investments Broker World Institutional Investor Personal Investor Business Week Insurance Forum Financial Services Week Changing Times Insurance Week Philadelphia Inquirer Christian Science Monitor Investor's Daily Smart Money Consumer Reports Journal of the American USA Today Economist Society of CLU & ChFC U.S. News & World Report EuroMoney Kiplinger Letter Wall Street Journal FACS of the Week Money Washington Post Financial Planning Mutual Fund Forecaster CNN Financial Product News Mutual Fund Magazine CNBC Financial World Nation's Business PBS Forbes |
The Funds and AIM Distributors may from time to time, in advertisements, sales literature and reports furnished to present or prospective shareholders, compare each Fund with the following, or compare each Fund's performance to performance data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index Moody's Investors Service (publications) Bear Stearns Foreign Bond Index Morgan Stanley Capital International All Country Bond Buyer Index (AC) World Index CDA/Wiesenberger Investment Company Services Morgan Stanley Capital International Emerging (data and mutual fund rankings Latin America Index and comparisons) Morgan Stanley Capital International Emerging CNBC/Financial News Composite Index Markets Latin America Free Index COFI Morningstar, Inc. (data and mutual fund rankings Consumer Price Index and comparisons) Datastream NASDAQ Donoghue's Organization for Economic Cooperation and Dow Jones Industrial Average Development (publications) |
EAFE Index Salomon Brothers Global Telecommunications First Boston High Yield Index Index Fitch IBCA, Inc. (publications) Salomon Brothers World Government Bond Ibbotson Associates International Bond Index Index -Non-U.S. International Bank for Reconstruction and Salomon Brothers World Government Bond Index Development (publications) Standard & Poor's (publications) Index Standard & Poor's 500 Index International Finance Corporation Emerging Stangar Markets Database Wilshire Associates International Financial Statistics World Bank (publications and reports) Lehman Bond Indices The World Bank Publication of Trends in Lipper Inc. (data and mutual fund rankings Developing Countries and comparisons) Worldscope Micropal, Inc. (data and mutual fund rankings and comparisons) |
Each Fund may also compare its performance to rates on Certificates of Deposit and other fixed rate investments such as the following:
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and diversification is based on sources believed to be reliable but may be subject to revision and has not been independently verified by the Funds or AIM Distributors. Advertising for the Funds may from time to time include discussions of general economic conditions and interest rates. Advertising for the Funds may also include reference to the use of those Funds as part of an individual's overall retirement investment program. From time to time, sales literature and/or advertisements for any of the Funds may disclose (i) the largest holdings in the Fund's portfolio, (ii) certain selling group members and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements may discuss generic topics pertaining to the mutual fund industry. This includes, but is not limited to, literature addressing general information about mutual funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets, certificates of deposit, retirement, retirement plans, asset allocation, tax-free investing, college planning, and inflation.
Although performance data may be useful to prospective investors when comparing a Fund's performance with other funds and other potential investments, investors should note that the methods of computing performance of other potential investments are not necessarily comparable to the methods employed by a Fund.
GENERAL INFORMATION ABOUT THE FUNDS
Each Fund may invest worldwide across industries within the Fund's area of concentration without national or regional restrictions. The ability of each Fund to invest worldwide may allow the portfolio managers to select industries in different economic cycles and varying stages of development, though there is no assurance that the managers will be successful in this selection.
Each Fund's area of concentration reflects the underlying theme of the Fund. AIM Distributors believes that there are certain social, political and economic trends that may benefit one or more industries within a Fund's area of concentration. Of course, there is no assurance that any of the Funds will benefit as a result.
BIOTECH FUND
From time to time the Fund and AIM Distributors will quote information including data regarding:
o The number of drug targets and approved drugs
o Profits, anticipated profits and earnings of biotech companies
o More specified approaches to healthcare, drug discovery, and diagnosis process
o New technologies and tools to speed/assist the drug discovery process
o New developments and discoveries in the biotech industry
o Announcements, regulations and decisions made by the FDA and other regulatory agencies
o Demographic information related to age, life expectancy, mortality and population of various regions, countries and age groups.
o Expenditures by various countries, regions and age groups on health care
o Acquisitions, mergers and partnerships between biotechnology firms and pharmaceutical or other health-related companies
The information quoted has not been independently verified by a Fund or AIM Distributors and will be based on data provided that is believed to be reliable and accurate from sources including the following:
o Third-party research firms
o The FDA and other regulatory agencies
o The World Bank and related publications
o Morgan Stanley Capital International stock market industry indices
o U.S. Census Bureau
o Various biotechnology, medical and health-related journals
HEALTH CARE FUND
From time to time the Fund and AIM Distributors will quote information including data regarding:
o Trading volume, number of listed companies and the largest companies of the global health care industry
o Expenditures by various countries, regions and age groups on health care
o Population of countries, regions and age groups
o Natality and mortality rates in various regions, countries and age groups
o Life expectancy rates in various regions, countries and age groups
o New health care products and products seeking approval
o Health maintenance organizations (HMOs) and their enrollment growth
o Studies from, but not limited to, the American Medical Association showing the effectiveness of using drugs to cure illness
o Medical technology and devices in use or in development
o Regulatory environment of health care industries
o Consolidation in the health care industries
The information quoted has not been independently verified by a Fund or AIM Distributors and will be based on data provided that is believed to be reliable and accurate from sources including the following:
o Research firms such as Mehta and Isaly which publishes Pharmaceutical Portfolio Recommendations
o OECD and its publications such as the OECD Health Data, as supplemented annually
o Morgan Stanley Capital International stock market industry indices such as Health & Personal Care
o The World Bank and its publications such as The World Development Report, as supplemented annually
o IFC and publications such as the Emerging Stock Markets Factbook
INFORMATION ABOUT THE GLOBAL HEALTH CARE INDUSTRIES
The Fund and the Advisor believe that certain market and demographic factors merit an investor's consideration when making a health care investment. Worldwide standards of living and life expectancy have increased at a substantial rate. The Advisor expects this growth, which works to the general benefit of the global health care industry, to continue at a roughly comparable rate in the future, although no assurances can be given in this regard. Moreover, according to the Advisor, the health care industry historically has proven to be a relatively non-cyclical industry that continues to provide goods and services to the public in periods of economic weakness as well as economic strength.
The Advisor believes that the anticipated increase in the world's elderly population could increase demand for health care products and services. For example, according to data compiled by the Advisor, in Japan the number of people age 65 and older is expected to grow over 100% by the year 2025; in Germany, France and the U.S., the same age group should grow 40%. Similarly, the U.S. Census Bureau predicts the number of Americans 85 and older to double in the next 30 years. From time to time, the Fund and AIM Distributors will quote information including, but not limited to, international data regarding populations, birth rates, mortality rates, life expectancy, health care expenditures, and gross domestic product vs. life expectancy. The information quoted has not been independently verified by the Fund or AIM Distributors and will be based on data that is believed to be reliable and accurate.
TELECOMMUNICATIONS AND TECHNOLOGY FUND
From time to time the Fund and AIM Distributors will quote information including data regarding:
o Increased usage of new technologies such as, but not limited to, cellular and wireless communications in emerging and established countries around the world
o Supply and demand of telephone equipment and services
o Regulatory environment of telecommunications industries
o Revenue, price and usage of telecommunications products and services
o Privatization and/or deregulation of telecommunications companies
The information quoted has not been independently verified by the Fund or AIM Distributors and will be based on data provided that is believed to be reliable and accurate from sources including the following:
o Salomon Brothers World Equity Telecommunications Index, which includes stock market data about the telecommunications industry in established and developing markets
o OECD and other publications from its subsidiaries such as the International Telecommunications Union
o Morgan Stanley Capital International stock market industry indices such as Telecommunications, Broadcasting & Publishing and Data Processing & Reproduction
o International Technology Consultants, a Washington D.C. based firm which publishes reports such as Eastern European & Soviet Telecom Report and Latin American Telecom Report
o Telegeography and other publications
DEREGULATION IN THE UNITED STATES
The United States has been the bellwether for deregulation of the telephone industry. The divestiture of the Bell System from American Telephone and Telegraph has produced competing companies in the United States. Such U.S. market-driven competition has, for example, led to lower costs for consumers which in turn led to greater consumer usage and to higher industrywide revenues. The Advisor expects this scenario to continue to benefit such companies in the U.S. and to similarly to be realized by the established telecommunications companies in established economies, although no assurances can be made in this regard.
INFRASTRUCTURE FUND
From time to time the Fund and AIM Distributors may quote information including:
o Supply and demand of telephone equipment and services, electricity, water, transportation, construction materials and other infrastructure-related products and services
o Regulatory environment of infrastructure industries
o Quantity and costs of current and projected infrastructure projects
o Privatization of industries and companies
o New technologies, products and services used in infrastructure industries
o Infrastructure Finance Magazine and other periodicals
FINANCIAL SERVICES FUND
From time to time the Fund and AIM Distributors may quote information including:
o Supply and demand of financial services
o Regulatory environment of financial service industries
o Credit ratings of U.S. and non-U.S. banks
o New technologies, products and services used in the financial services industries
o Consolidation in the financial services industries
ENERGY FUND
From time to time the Fund and AIM Distributors may quote information including:
o Supply, demand and prices of natural resources
o Regulatory environment of natural resources
o Supply, demand and prices of products manufactured from natural resources
o New technologies, products and services used in the natural resources industries
APPENDIX
DESCRIPTION OF BOND RATINGS
Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued by various entities from "Aaa" to "C." Investment grade ratings are the first four categories: Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa--Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the Aaa securities. A--Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future. Baa--Bonds which are rated Baa are considered as medium-grade obligations, (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba--Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B--Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa--Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca--Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C--Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), rates the securities debt of various entities in categories ranging from "AAA" to "D" according to quality. Investment grade ratings are the first four categories: AAA--An obligation rated "AAA" has the highest rating assigned by S&P. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA--An obligation rated "AA" differs from the highest rated obligations only in a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. A--An obligation rated "A" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. BBB--An obligation rated "BBB" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. BB, B, CCC, CC, C--Obligations rated "BB," "B," "CCC," "CC," and "C" are regarded as having significant speculative characteristics. "BB" indicates the least degree of speculation and "C" the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. BB--An obligation rated "BB" is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. B--An obligation rated "B" is more vulnerable to nonpayment than obligations rated "BB," but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. CCC--An obligation
rated "CCC" is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. CC--An obligation rated "CC" is currently highly vulnerable to nonpayment. C--The "C" rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued. D--An obligation rated "D" is in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
NR: Indicates that no public rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designation "Prime-1" to indicate commercial paper having a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well-established industries; high rates of return on funds employed; conservative capitalization structure with moderate reliance on debt and ample asset protection; broad margins in earnings coverage of fixed financial charges and high internal cash generation; and well-established access to a range of financial markets and assured sources of alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of senior short-term debt obligations. This normally will be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
S&P ratings of commercial paper are graded into several categories ranging from "A-1" for the highest quality obligations to "D" for the lowest. Issues in the "A" category are delineated with numbers 1, 2, and 3 to indicate the relative degree of safety. A-1--This highest category indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics will be denoted with a plus sign (+) designation. A-2--Capacity for timely payments on issues with this designation is satisfactory; however, the relative degree of safety is not as high as for issues designated "A-1."
ABSENCE OF RATING
Where no rating has been assigned or where a rating has been suspended or withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the effects of which preclude satisfactory analysis; if there is no longer available reasonable up-to-date data to permit a judgment to be formed; if a bond is called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating classification from Aa to Caa. The modifier 1 indicates that the Company ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the Company ranks in the lower end of its generic rating category.
FINANCIAL STATEMENTS
FS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Financial Services Fund
and Board of Trustees of AIM Investment Funds:
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 at October 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts December 18, 2000 |
FS-1
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-85.53%
BANKS (MAJOR REGIONAL)-13.22%
Bank of New York Co., Inc. (The) 157,000 $ 9,037,312
---------------------------------------------------------------
FleetBoston Financial Corp. 130,000 4,940,000
---------------------------------------------------------------
Mellon Financial Corp. 47,000 2,267,750
---------------------------------------------------------------
PNC Financial Services Group 39,000 2,608,125
---------------------------------------------------------------
State Street Corp. 27,000 3,367,980
---------------------------------------------------------------
Wells Fargo Co. 116,000 5,372,250
===============================================================
27,593,417
===============================================================
BANKS (MONEY CENTER)-3.78%
Bank of America Corp. 23,000 1,105,437
---------------------------------------------------------------
Chase Manhattan Corp. (The) 149,000 6,779,500
===============================================================
7,884,937
===============================================================
BANKS (REGIONAL)-1.96%
Firstar Corp. 121,000 2,382,187
---------------------------------------------------------------
Silicon Valley Bancshares(a) 37,000 1,711,250
===============================================================
4,093,437
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-1.50%
Henry (Jack) & Associates 30,000 1,650,000
---------------------------------------------------------------
Intuit Inc.(a) 24,000 1,474,500
===============================================================
3,124,500
===============================================================
CONSUMER FINANCE-5.86%
Capital One Financial Corp. 78,000 4,923,750
---------------------------------------------------------------
MBNA Corp. 96,000 3,606,000
---------------------------------------------------------------
Providian Financial Corp. 35,600 3,702,400
===============================================================
12,232,150
===============================================================
ELECTRICAL EQUIPMENT-1.55%
General Electric Co. 59,000 3,233,937
===============================================================
FINANCIAL (DIVERSIFIED)-14.96%
American Express Co. 90,000 5,400,000
---------------------------------------------------------------
Associates First Capital
Corp.-Class A 25,000 928,125
---------------------------------------------------------------
Citigroup Inc. 160,666 8,455,048
---------------------------------------------------------------
Fannie Mae 33,500 2,579,500
---------------------------------------------------------------
Freddie Mac 44,000 2,640,000
---------------------------------------------------------------
J.P. Morgan & Co., Inc. 28,000 4,634,000
---------------------------------------------------------------
PMI Group, Inc. (The) 31,500 2,327,062
---------------------------------------------------------------
SEI Investments Co. 47,000 4,265,250
===============================================================
31,228,985
===============================================================
INSURANCE (LIFE/HEALTH)-2.49%
AFLAC, Inc. 59,000 4,310,687
---------------------------------------------------------------
|
MARKET
SHARES VALUE
INSURANCE (LIFE/HEALTH)-(CONTINUED)
Nationwide Financial Services,
Inc.-Class A 18,000 $ 875,250
===============================================================
5,185,937
===============================================================
INSURANCE (MULTI-LINE)-2.99%
American International Group,
Inc. 63,750 6,247,500
===============================================================
INSURANCE (PROPERTY-CASUALTY)-2.14%
Radian Group Inc. 63,000 4,465,125
===============================================================
INSURANCE BROKERS-5.96%
Aon Corp. 123,000 5,096,813
---------------------------------------------------------------
Marsh & McLennan Cos., Inc. 56,200 7,348,150
===============================================================
12,444,963
===============================================================
INVESTMENT BANKING/BROKERAGE-15.14%
Goldman Sachs Group, Inc. (The) 43,000 4,291,938
---------------------------------------------------------------
Legg Mason, Inc. 72,000 3,739,500
---------------------------------------------------------------
Lehman Brothers Holdings, Inc. 105,200 6,785,400
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 54,000 3,780,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 69,200 5,557,623
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 75,300 2,644,913
---------------------------------------------------------------
TD Waterhouse Group, Inc.(a) 147,000 2,434,688
---------------------------------------------------------------
Waddell & Reed Financial,
Inc.-Class A 74,000 2,358,750
===============================================================
31,592,812
===============================================================
INVESTMENT MANAGEMENT-7.64%
Affiliated Managers Group,
Inc.(a) 21,000 1,262,625
---------------------------------------------------------------
Alliance Capital Management
Holding L.P. 45,000 2,160,000
---------------------------------------------------------------
Investors Financial Services
Corp. 111,000 7,957,313
---------------------------------------------------------------
Stilwell Financial, Inc. 101,700 4,557,431
===============================================================
15,937,369
===============================================================
SAVINGS & LOAN COMPANIES-1.69%
Golden West Financial Corp. 63,000 3,531,938
===============================================================
SERVICES (DATA PROCESSING)-4.65%
Concord EFS, Inc.(a) 134,000 5,535,875
---------------------------------------------------------------
First Data Corp. 83,000 4,160,375
===============================================================
9,696,250
===============================================================
Total Domestic Common Stocks
(Cost $131,621,239) 178,493,257
===============================================================
FOREIGN STOCKS-8.32%
BERMUDA-1.15%
ACE Ltd.
(Insurance-Property-Casualty) 61,000 2,394,250
===============================================================
CANADA-0.81%
AGF Management Ltd.-Class B
(Investment Management) 101,000 1,679,696
===============================================================
|
FS-2
MARKET
SHARES VALUE
FOREIGN STOCKS-(CONTINUED)
FRANCE-1.56%
Assurances Generales de France
(Insurance-Multi-Line) 28,700 $ 1,570,975
---------------------------------------------------------------
BNP Paribas (Banks-Major
Regional) 7,500 646,671
---------------------------------------------------------------
Societe Generale-Class A
(Banks-Major Regional) 18,200 1,033,299
===============================================================
3,250,945
===============================================================
GERMANY-0.30%
Tecis Holding A.G.
(Computers-Software & Services) 8,600 621,823
===============================================================
HONG KONG-1.19%
Dah Sing Financial Group
(Banks-Regional) 580,800 2,494,781
===============================================================
JAPAN-0.76%
Nikko Securities Co., Ltd. (The)
(Investment Banking/Brokerage) 94,000 811,511
---------------------------------------------------------------
Nomura Securities Co., Ltd.
(Investment Banking/Brokerage) 37,000 784,998
===============================================================
1,596,509
===============================================================
MEXICO-0.72%
Grupo Financiero Banamex Accival,
S.A. de C.V. (Banacci)
(Financial-Diversified)(a) 966,000 1,501,230
===============================================================
|
MARKET
SHARES VALUE
NETHERLANDS-0.36%
Aegon N.V.
(Insurance-Life/Health) 18,526 $ 747,987
===============================================================
SINGAPORE-0.82%
DBS Group Holdings Ltd.
(Banks-Money Center) 146,040 1,721,248
===============================================================
SWITZERLAND-0.22%
Julius Baer Holding A.G.-Class B
(Banks-Major Regional) 95 470,428
===============================================================
UNITED KINGDOM-0.43%
Royal Bank of Scotland Group PLC
(Banks-Major Regional) 39,600 889,145
===============================================================
Total Foreign Stocks (Cost
$14,601,545) 17,368,042
===============================================================
MONEY MARKET FUNDS-7.60%
STIC Liquid Assets Portfolio(b) 7,926,160 7,926,160
---------------------------------------------------------------
STIC Prime Portfolio(b) 7,926,160 7,926,160
===============================================================
Total Money Market Funds (Cost
$15,852,320) 15,852,320
===============================================================
TOTAL INVESTMENTS-101.45% (Cost $162,075,104) 211,713,619
---------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS-(1.45%) (3,033,418)
---------------------------------------------------------------
NET ASSETS-100.00% $ 208,680,201
_______________________________________________________________
===============================================================
|
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-3
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$162,075,104) $211,713,619
------------------------------------------------------------
Receivables for:
Investments sold 1,392,553
------------------------------------------------------------
Fund shares sold 2,114,208
------------------------------------------------------------
Dividends 254,728
------------------------------------------------------------
Collateral for securities loaned 82,365
------------------------------------------------------------
Other assets 24,315
============================================================
Total assets $215,581,788
============================================================
LIABILITIES:
Payables for:
Investments purchased 6,009,453
------------------------------------------------------------
Fund shares reacquired 247,962
------------------------------------------------------------
Collateral upon return of securities loaned 82,365
------------------------------------------------------------
Accrued advisory fees 222,630
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 144,076
------------------------------------------------------------
Accrued trustees' fees 916
------------------------------------------------------------
Accrued transfer agent fees 42,714
------------------------------------------------------------
Accrued operating expenses 147,236
============================================================
Total liabilities 6,901,587
============================================================
Net assets applicable to shares outstanding $208,680,201
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 95,393,307
____________________________________________________________
============================================================
Class B $ 92,342,864
____________________________________________________________
============================================================
Class C $ 20,944,030
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 3,838,859
____________________________________________________________
============================================================
Class B 3,825,860
____________________________________________________________
============================================================
Class C 867,729
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 24.85
------------------------------------------------------------
Offering price per share:
(Net asset value of $24.85 divided by
95.25%) $ 26.09
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 24.14
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 24.14
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$22,386) $ 1,332,092
------------------------------------------------------------
Dividends from affiliated money market funds 690,406
------------------------------------------------------------
Interest 1,441
------------------------------------------------------------
Security lending income 13,796
============================================================
Total investment income 2,037,735
============================================================
EXPENSES:
Advisory fees 1,192,263
------------------------------------------------------------
Administrative services fees 50,000
------------------------------------------------------------
Custodian fees 27,220
------------------------------------------------------------
Distribution fees -- Class A 270,409
------------------------------------------------------------
Distribution fees -- Class B 601,612
------------------------------------------------------------
Distribution fees -- Class C 76,274
------------------------------------------------------------
Transfer agent fees 301,421
------------------------------------------------------------
Trustees' fees 9,675
------------------------------------------------------------
Other 251,024
============================================================
Total expenses 2,779,898
============================================================
Less: Expense reimbursement (2,650)
------------------------------------------------------------
Expenses paid indirectly (1,819)
============================================================
Net expenses 2,775,429
============================================================
Net investment income (loss) (737,694)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES AND
OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 3,538,391
------------------------------------------------------------
Foreign currencies (41,849)
------------------------------------------------------------
Option contracts written 31,268
============================================================
3,527,810
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 31,447,967
------------------------------------------------------------
Foreign currencies (9,885)
============================================================
31,438,082
============================================================
Net gain from investment securities, foreign
currencies and option contracts 34,965,892
============================================================
Net increase in net assets resulting from
operations $34,228,198
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-4
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
------------ ------------
OPERATIONS:
Net investment income (loss) $ (737,694) $ (280,309)
------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 3,527,810 18,854,118
------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 31,438,082 8,883,185
==========================================================================================
Net increase in net assets resulting from operations 34,228,198 27,456,994
==========================================================================================
Distributions to shareholders from net investment income:
Class A (343,444) (27,914)
------------------------------------------------------------------------------------------
Class B (299,755) --
------------------------------------------------------------------------------------------
Class C (16,237) --
------------------------------------------------------------------------------------------
Advisor Class* (29,048) (62,446)
------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (5,350,283) (50,561)
------------------------------------------------------------------------------------------
Class B (8,341,879) (88,384)
------------------------------------------------------------------------------------------
Class C (287,630) --
------------------------------------------------------------------------------------------
Advisor Class* (226,554) (16,133)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 54,920,598 (6,952,812)
------------------------------------------------------------------------------------------
Class B 34,809,580 (14,361,940)
------------------------------------------------------------------------------------------
Class C 18,134,821 578,307
------------------------------------------------------------------------------------------
Advisor Class* (431,451) (11,056,810)
==========================================================================================
Net increase (decrease) in net assets 126,766,916 (4,581,699)
==========================================================================================
NET ASSETS:
Beginning of year 81,913,285 86,494,984
==========================================================================================
End of year $208,680,201 $ 81,913,285
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $156,893,899 $ 46,550,387
------------------------------------------------------------------------------------------
Undistributed net investment income (loss) 17,702 736,025
------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 2,141,329 16,437,684
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 49,627,271 18,189,189
==========================================================================================
$208,680,201 $ 81,913,285
__________________________________________________________________________________________
==========================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
See Notes to Financial Statements.
FS-5
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Financial Services Fund (the "Fund") is a separate series of AIM
Investment Funds (the "Trust"). The Trust is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end series management investment company consisting
of nine separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital. At a meeting
held on May 23 and 24, 2000, the Board of Trustees approved a restructuring of
the Fund to eliminate the master-feeder structure. The Fund, which had invested
substantially all of its investable assets in the Global Financial Services
Portfolio (the "Portfolio"), a Delaware business trust, would now invest
directly in the securities in which the Portfolio had invested. The
restructuring of the Fund was approved by Shareholders of the Fund at a meeting
held on September 1, 2000 and was completed on September 8, 2000.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available or are questionable are valued at fair
value as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$707,855, undistributed net realized gains decreased by $3,617,819 and paid
in capital increased by $2,909,964 as a result of book/tax differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, foreign currency transactions, net operating
loss and other reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
FS-6
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded 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 written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
H. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividend expense on short sales, extraordinary items and
increases in expenses due to offset arrangements, if any) for Class A, Class B
and Class C shares to 2.00%, 2.50% and 2.50%, respectively. During the year
ended October 31, 2000, AIM reimbursed expenses of $2,650.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended October 31, 2000, AIM was
paid $50,000 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended October 31, 2000, AFS was
paid $17,089 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing
FS-7
personal shareholder services to their customers who purchase and own the
appropriate class of shares of the Fund. Any amounts not paid as a service fee
under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $270,409, $601,612
and $76,274, respectively, as compensation under the Plans.
AIM Distributors received commissions of $133,801 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $10,205 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $1,717 and reductions in custodian fees of $102 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $1,819.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended October 31,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly and failed to return the securities.
At October 31, 2000, securities with an aggregate value of $80,750 were on
loan to brokers. The loans were secured by cash collateral of $82,365 received
by the Fund. For the year ended October 31, 2000, the Fund received fees of
$13,796 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$131,748,172 and $46,041,929, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $49,594,650 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (183,390) ========================================================= Net unrealized appreciation of investment securities $49,411,260 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $162,302,359. |
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of year -- $ --
---------------------------------------------------------
Written 280 157,233
---------------------------------------------------------
Closed (280) (157,233)
=========================================================
End of year -- $ --
_________________________________________________________
=========================================================
|
FS-8
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 3,708,161 $ 84,155,054 833,262 $ 17,299,042
----------------------------------------------------------------------------------------------------------------------
Class B 2,343,916 50,065,435 676,623 13,852,370
----------------------------------------------------------------------------------------------------------------------
Class C* 910,841 19,615,087 32,543 712,656
----------------------------------------------------------------------------------------------------------------------
Advisor Class** 70,059 1,508,705 27,443 605,576
======================================================================================================================
Issued as reinvestment of dividends:
Class A 273,338 5,297,291 4,035 73,215
----------------------------------------------------------------------------------------------------------------------
Class B 424,196 8,021,011 4,616 82,070
----------------------------------------------------------------------------------------------------------------------
Class C* 11,109 210,474 -- --
----------------------------------------------------------------------------------------------------------------------
Advisor Class** 12,981 253,124 4,287 78,579
======================================================================================================================
Conversion of Advisor Class shares to Class A shares***:
Class A 105,329 2,017,059 -- --
----------------------------------------------------------------------------------------------------------------------
Advisor Class** (104,619) (2,017,059) -- --
======================================================================================================================
Reacquired:
Class A (1,582,015) (36,548,806) (1,170,739) (24,325,069)
----------------------------------------------------------------------------------------------------------------------
Class B (1,131,468) (23,276,866) (1,411,988) (28,296,380)
----------------------------------------------------------------------------------------------------------------------
Class C* (80,911) (1,690,740) (5,853) (134,349)
----------------------------------------------------------------------------------------------------------------------
Advisor Class** (8,213) (176,221) (537,683) (11,740,965)
======================================================================================================================
4,952,704 $107,433,548 (1,543,454) $(31,793,255)
______________________________________________________________________________________________________________________
======================================================================================================================
|
* Class C shares commenced sales on March 1, 1999. ** Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). *** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
FS-9
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
Net asset value, beginning of period $23.23 $17.05 $17.22 $14.20 $11.92
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.02) 0.07 0.04 0.05
-----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.87 6.25 0.37 3.97 2.36
=================================================================================================================
Total from investment operations 5.80 6.23 0.44 4.01 2.41
=================================================================================================================
Less distributions:
Dividends from net investment income (0.25) (0.02) (0.01) -- (0.12)
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.93) (0.03) (0.60) (0.99) (0.01)
=================================================================================================================
Total distributions (4.18) (0.05) (0.61) (0.99) (0.13)
=================================================================================================================
Net asset value, end of period $24.85 $23.23 $17.05 $17.22 $14.20
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 30.06% 36.62% 2.53% 29.91% 20.21%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $95,393 $30,987 $28,433 $29,639 $7,302
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.00%(c) 1.99% 1.97% 2.29% 2.32%
-----------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.00%(c) 2.12% 1.99% 2.36% 3.39%
=================================================================================================================
Ratio of net investment income (loss) to average net assets (0.33)%(c) (0.08)% 0.37% 0.23% 0.41%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 41% 107% 111% 91% 103%
_________________________________________________________________________________________________________________
=================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $54,081,791.
CLASS B
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
Net asset value, beginning of period $22.67 $16.71 $16.97 $14.06 $11.83
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.12) (0.02) (0.04) (0.01)
-----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.72 6.11 0.37 3.94 2.34
=================================================================================================================
Total from investment operations 5.54 5.99 0.35 3.90 2.33
=================================================================================================================
Less distributions:
Dividends from net investment income (0.14) -- (0.01) -- (0.09)
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.93) (0.03) (0.60) (0.99) (0.01)
=================================================================================================================
Total distributions (4.07) (0.03) (0.61) (0.99) (0.10)
=================================================================================================================
Net asset value, end of period $24.14 $22.67 $16.71 $16.97 $14.06
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 29.40% 35.91% 2.08% 29.13% 19.81%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $92,343 $49,619 $48,785 $47,585 $9,886
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.50%(c) 2.49% 2.47% 2.79% 2.82%
-----------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.50%(c) 2.62% 2.49% 2.86% 3.89%
=================================================================================================================
Ratio of net investment income (loss) to average net assets (0.83)%(c) (0.58)% (0.13)% (0.27)% (0.09)%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 41% 107% 111% 91% 103%
_________________________________________________________________________________________________________________
=================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $60,161,247.
FS-10
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999(a)
----------- -------------
Net asset value, beginning of period $ 22.67 $19.58
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.08)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.72 3.17
==========================================================================================
Total from investment operations 5.54 3.09
==========================================================================================
Less distributions:
Dividends from net investment income (0.14) --
------------------------------------------------------------------------------------------
Distributions from net realized gains (3.93) --
==========================================================================================
Total distributions (4.07) --
==========================================================================================
Net asset value, end of period $ 24.14 $22.67
__________________________________________________________________________________________
==========================================================================================
Total return(b) 29.40% 15.78%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $20,944 $ 605
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.50%(c) 2.49%(d)
------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.50%(c) 2.62%(d)
==========================================================================================
Ratio of net investment income (loss) to average net assets (0.83)%(c) (0.58)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 41% 107%
__________________________________________________________________________________________
==========================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $7,627,355.
(d) Annualized.
FS-11
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Health Care Fund
and Board of Trustees of AIM Investment Funds:
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 Health Care Fund at October 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts December 18, 2000 |
FS-12
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-94.23%
BIOTECHNOLOGY-4.69%
Amgen Inc.(a) 500,000 $ 28,968,750
==============================================================
DISTRIBUTORS (FOOD & HEALTH)-11.49%
AmeriSource Health Corp.-Class A(a) 1,550,000 67,328,125
--------------------------------------------------------------
Owens & Minor, Inc. Holding Co. 240,000 3,630,000
==============================================================
70,958,125
==============================================================
ELECTRONICS (INSTRUMENTATION)-1.31%
Varian Inc.(a) 263,000 8,103,687
==============================================================
EQUIPMENT (SEMICONDUCTOR)-5.57%
Varian Semiconductor Equipment
Associates, Inc.(a) 1,495,000 34,385,000
==============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-7.29%
ICN Pharmaceuticals, Inc. 1,183,000 45,027,937
==============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-5.77%
Pfizer Inc. 825,000 35,629,687
==============================================================
HEALTH CARE (HOSPITAL MANAGEMENT)-35.98%
Community Health Systems(a) 625,000 17,617,188
--------------------------------------------------------------
HCA-Healthcare Corp. (The) 860,000 34,346,250
--------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 1,900,000 37,643,750
--------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 90,000 3,487,500
--------------------------------------------------------------
Province Healthcare Co.(a) 280,000 11,795,000
--------------------------------------------------------------
Quorum Health Group, Inc.(a) 2,232,000 29,853,000
--------------------------------------------------------------
Tenet Healthcare Corp.(a) 1,030,000 40,491,875
--------------------------------------------------------------
Triad Hospitals, Inc.(a) 575,000 15,956,250
--------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 370,000 31,033,750
==============================================================
222,224,563
==============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-9.49%
INAMED Corp.(a) 750,000 21,000,000
--------------------------------------------------------------
Sunrise Medical, Inc.(a) 25,000 232,813
--------------------------------------------------------------
Syncor International Corp.(a) 1,150,000 29,540,625
--------------------------------------------------------------
Varian Medical Systems, Inc.(a) 160,000 7,820,000
==============================================================
58,593,438
==============================================================
HEALTH CARE (SPECIALIZED
SERVICES)-12.25%
HEALTHSOUTH Corp.(a) 3,500,000 42,000,000
--------------------------------------------------------------
Lincare Holdings, Inc.(a) 800,000 33,650,000
==============================================================
75,650,000
==============================================================
|
MARKET
SHARES VALUE
INSURANCE (MULTI-LINE)-0.39%
CIGNA Corp. 20,000 $ 2,439,000
==============================================================
Total Domestic Common Stocks
(Cost $406,492,847) 581,980,187
==============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-2.37%
HEALTH CARE (DRUGS-GENERIC & OTHER)
FRANCE-0.03%
Sanofi-Synthelabo S.A. 3,000 157,849
==============================================================
GERMANY-0.49%
Altana A.G. 25,000 3,033,924
==============================================================
ISRAEL-1.72%
Teva Pharmaceutical Industries
Ltd.-ADR 180,000 10,642,500
==============================================================
JAPAN-0.13%
Banyu Pharmaceutical Co., Ltd. 3,000 64,336
--------------------------------------------------------------
Chugai Pharmaceutical Co., Ltd. 4,000 67,892
--------------------------------------------------------------
Daiichi Pharmaceutical Co., Ltd. 3,000 85,231
--------------------------------------------------------------
Eisai Co., Ltd. 5,000 153,966
--------------------------------------------------------------
Kissei Pharmaceutical Co., Ltd. 2,000 36,640
--------------------------------------------------------------
Kyowa Hakko Kogyo Co., Ltd. 5,000 40,003
--------------------------------------------------------------
Rohto Pharmaceutical Co., Ltd. 8,000 107,043
--------------------------------------------------------------
Shionogi & Co., Ltd. 3,000 58,562
--------------------------------------------------------------
Taisho Pharmaceutical Co., Ltd. 2,000 57,554
--------------------------------------------------------------
Takeda Chemical Industries Ltd. 1,000 65,894
--------------------------------------------------------------
Yamanouchi Pharmaceutical Co., Ltd. 2,000 90,547
==============================================================
827,668
==============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$6,716,874) 14,661,941
==============================================================
MONEY MARKET FUNDS-3.23%
STIC Liquid Assets Portfolio(b) 9,969,269 9,969,269
--------------------------------------------------------------
STIC Prime Portfolio(b) 9,969,269 9,969,269
==============================================================
Total Money Market Funds
(Cost $19,938,538) 19,938,538
==============================================================
TOTAL INVESTMENTS-99.83%
(Cost $433,148,259) 616,580,666
==============================================================
OTHER ASSETS LESS LIABILITIES-0.17% 1,064,439
==============================================================
NET ASSETS-100.00% $617,645,105
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-13
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$433,148,259) $616,580,666
------------------------------------------------------------
Receivables for:
Investments sold 3,871,774
------------------------------------------------------------
Fund shares sold 5,674,309
------------------------------------------------------------
Dividends 237,527
------------------------------------------------------------
Other assets 19,660
============================================================
Total assets 626,383,936
============================================================
LIABILITIES:
Payables for:
Investments purchased 6,813,688
------------------------------------------------------------
Fund shares reacquired 806,710
------------------------------------------------------------
Accrued advisory fees 506,704
------------------------------------------------------------
Accrued administrative services fees 10,723
------------------------------------------------------------
Accrued distribution fees 383,300
------------------------------------------------------------
Accrued trustees' fees 1,050
------------------------------------------------------------
Accrued transfer agent fees 108,916
------------------------------------------------------------
Accrued operating expenses 107,740
============================================================
Total liabilities 8,738,831
============================================================
Net assets applicable to shares outstanding $617,645,105
____________________________________________________________
============================================================
NET ASSETS:
Class A $460,444,944
____________________________________________________________
============================================================
Class B $144,861,414
____________________________________________________________
============================================================
Class C $ 12,338,747
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 15,286,551
____________________________________________________________
============================================================
Class B 5,078,111
____________________________________________________________
============================================================
Class C 432,454
____________________________________________________________
============================================================
Class A :
Net asset value and redemption price per
share $ 30.12
------------------------------------------------------------
Offering price per share:
(Net asset value of $30.12 divided
by 95.25%) $ 31.62
____________________________________________________________
============================================================
Class B :
Net asset value and offering price per share $ 28.53
____________________________________________________________
============================================================
Class C :
Net asset value and offering price per share $ 28.53
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$17,713) $ 2,451,685
------------------------------------------------------------
Dividends from affiliated money market funds 1,989,453
------------------------------------------------------------
Interest 2,131
------------------------------------------------------------
Security lending income 31,096
============================================================
Total investment income 4,474,365
============================================================
EXPENSES:
Advisory fees 4,963,633
------------------------------------------------------------
Administrative services fees 117,295
------------------------------------------------------------
Custodian fees 69,740
------------------------------------------------------------
Distribution fees -- Class A 1,943,859
------------------------------------------------------------
Distribution fees -- Class B 1,142,815
------------------------------------------------------------
Distribution fees -- Class C 60,160
------------------------------------------------------------
Transfer agent fees 954,967
------------------------------------------------------------
Trustees' fees 18,474
------------------------------------------------------------
Other 157,242
============================================================
Total expenses 9,428,185
============================================================
Less: Expenses paid indirectly (6,784)
------------------------------------------------------------
Net expenses 9,421,401
============================================================
Net investment income (loss) (4,947,036)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 78,710,304
------------------------------------------------------------
Foreign currencies (757,392)
------------------------------------------------------------
Option contracts written 293,495
============================================================
78,246,407
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 93,768,872
------------------------------------------------------------
Foreign currencies (3,563)
------------------------------------------------------------
Option contracts written (870,781)
============================================================
92,894,528
============================================================
Net gain from investment securities, foreign
currencies and option contracts 171,140,935
============================================================
Net increase in net assets resulting from
operations $166,193,899
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-14
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
------------ ------------
OPERATIONS:
Net investment income (loss) $ (4,947,036) $ (4,551,421)
------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 78,246,407 44,733,785
------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 92,894,528 45,885,756
==========================================================================================
Net increase in net assets resulting from operations 166,193,899 86,068,120
==========================================================================================
Distributions to shareholders from net realized gains:
Class A (33,324,503) --
------------------------------------------------------------------------------------------
Class B (9,919,856) --
------------------------------------------------------------------------------------------
Class C (162,378) --
------------------------------------------------------------------------------------------
Advisor Class* (84,346) --
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 9,141,881 (66,396,665)
------------------------------------------------------------------------------------------
Class B 14,704,535 (15,601,954)
------------------------------------------------------------------------------------------
Class C 9,136,876 1,345,583
------------------------------------------------------------------------------------------
Advisor Class* (710,294) (6,483,138)
==========================================================================================
Net increase (decrease) in net assets 154,975,814 (1,068,054)
==========================================================================================
NET ASSETS:
Beginning of year 462,669,291 463,737,345
==========================================================================================
End of year $617,645,105 $462,669,291
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $364,662,375 $329,089,377
------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 69,554,552 43,046,264
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 183,428,178 90,533,650
==========================================================================================
$617,645,105 $462,669,291
__________________________________________________________________________________________
==========================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
See Notes to Financial Statements.
FS-15
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Health Care Fund (the "Fund") is a separate series of AIM Investment
Funds (the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of nine
separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available or are questionable are valued at fair
value as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$4,947,036, undistributed net realized gains decreased by $8,247,036 and paid
in capital increased by $3,300,000 as a result of book/tax differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, foreign currency transactions, net operating
loss and other reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items
FS-16
denominated in foreign currencies are translated into U.S. dollar amounts on
the respective dates of such transactions. The Fund does not separately
account for the portion of the results of operations resulting from changes
in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded 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 written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
H. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividend expense on short sales, extraordinary items and
increases in expenses due to offset arrangements, if any) for Class A, Class B
and Class C shares to 2.00%, 2.50% and 2.50%, respectively.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended October 31, 2000, AIM was
paid $117,295 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended October 31, 2000, AFS was
paid $592,507 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund ,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $1,943,859,
$1,142,815 and $60,160, respectively, as compensation under the Plans.
AIM Distributors received commissions of $97,946 from sales of the Class A
shares of the Fund during the year ended October 31,
FS-17
2000. Such commissions are not an expense of the Fund. They are deducted from,
and are not included in, the proceeds from sales of Class A shares. During the
year ended October 31, 2000, AIM Distributors received $3,020 in contingent
deferred sales charges imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $6,784 under expense an offset arrangement which resulted in a reduction of the Fund's total expenses of $6,784.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A.. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the year ended October 31, 2000, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, there were no securities on loan to brokers. For the year
ended October 31, 2000, the Fund received fees of $31,096 for securities
lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$1,164,844,307 and $1,170,212,123, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $192,344,728 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (8,920,735) ========================================================= Net unrealized appreciation of investment securities $183,423,993 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $433,156,673. |
FS-18
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
----------- -------------
Beginning of year 19,050 $ 7,216,093
--------------------------------------------------------------------------------------------
Written 63,070 28,566,772
--------------------------------------------------------------------------------------------
Closed (61,964) (26,521,246)
--------------------------------------------------------------------------------------------
Exercised (7,270) (6,107,642)
--------------------------------------------------------------------------------------------
Expired (12,886) (3,153,977)
============================================================================================
End of year -- $ --
____________________________________________________________________________________________
============================================================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -------------
Sold:
Class A 2,265,037 $ 61,242,852 6,319,231 $ 143,915,406
------------------------------------------------------------------------------------------------------------------------
Class B 1,557,713 38,869,448 691,366 16,088,681
------------------------------------------------------------------------------------------------------------------------
Class C* 775,066 19,232,447 58,588 1,413,024
------------------------------------------------------------------------------------------------------------------------
Advisor Class** 12,143 310,037 18,009 438,450
------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 1,402,570 30,940,689 -- --
------------------------------------------------------------------------------------------------------------------------
Class B 437,951 9,188,203 -- --
------------------------------------------------------------------------------------------------------------------------
Class C* 6,991 146,741 -- --
------------------------------------------------------------------------------------------------------------------------
Advisor Class** 3,706 84,344 -- --
------------------------------------------------------------------------------------------------------------------------
Conversion of Advisor Class shares to Class A shares***:
Class A 44,266 1,041,571 --
------------------------------------------------------------------------------------------------------------------------
Advisor Class** (42,881) (1,041,571) -- --
------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (3,330,391) (84,083,231) (9,158,822) (210,312,070)
------------------------------------------------------------------------------------------------------------------------
Class B (1,400,658) (33,353,116) (1,386,892) (31,690,636)
------------------------------------------------------------------------------------------------------------------------
Class C* (405,278) (10,242,312) (2,913) (67,441)
------------------------------------------------------------------------------------------------------------------------
Advisor Class** (2,513) (63,104) (274,593) (6,921,588)
========================================================================================================================
1,323,722 $ 32,272,998 (3,736,026) $ (87,136,174)
________________________________________________________________________________________________________________________
========================================================================================================================
|
* Class C shares commenced sales on March 1, 1999. ** Advisor Class share activity for the period November 1, 1999 through February 11, 2000. *** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
FS-19
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 24.00 $ 20.15 $ 27.98 $ 23.60 $ 21.84
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.22) (0.19) (0.21) (0.25) (0.17)
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 8.62 4.04 (0.91) 6.48 4.79
======================================================================================================================
Total from investment operations 8.40 3.85 (1.12) 6.23 4.62
======================================================================================================================
Less distributions:
Distributions from net realized gains (2.28) -- (6.70) (1.85) (2.86)
----------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- (0.01) -- --
======================================================================================================================
Total distributions (2.28) -- (6.71) (1.85) (2.86)
======================================================================================================================
Net asset value, end of period $ 30.12 $ 24.00 $ 20.15 $ 27.98 $ 23.60
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(b) 38.49% 19.11% (4.71)% 28.36% 23.14%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $460,445 $357,747 $357,534 $472,083 $467,861
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets 1.73%(c) 1.82% 1.84% 1.80% 1.84%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of net investment income (loss) to average net assets (0.85)%(c) (0.81)% (0.98)% (1.03)% (0.75)%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 242% 123% 187% 149% 157%
______________________________________________________________________________________________________________________
======================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charge.
(c) Ratios are based on average daily net assets of $388,771,812.
CLASS B
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 22.96 $ 19.37 $ 27.27 $ 23.15 $ 21.56
-----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.34) (0.30) (0.30) (0.37) (0.27)
-----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 8.19 3.89 (0.89) 6.34 4.72
=======================================================================================================================
Total from investment operations 7.85 3.59 (1.19) 5.97 4.45
=======================================================================================================================
Less distributions:
Distributions from net realized gains (2.28) -- (6.70) (1.85) (2.86)
-----------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- (0.01) -- --
=======================================================================================================================
Total distributions (2.28) -- (6.71) (1.85) (2.86)
=======================================================================================================================
Net asset value, end of period $ 28.53 $ 22.96 $ 19.37 $ 27.27 $ 23.15
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(b) 37.78% 18.53% (5.20)% 27.75% 22.59%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $144,861 $102,916 $100,311 $147,440 $107,622
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of expenses to average net assets 2.23%(c) 2.33% 2.34% 2.30% 2.34%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of net investment income (loss) to average net assets (1.35)%(c) (1.32)% (1.48)% (1.53)% (1.25)%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 242% 123% 187% 149% 157%
_______________________________________________________________________________________________________________________
=======================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $114,281,453.
FS-20
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999(a)
----------- --------------
Net asset value, beginning of period $ 22.96 $22.50
---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.34) (0.21)
---------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 8.19 0.67
=============================================================================================
Total from investment operations 7.85 0.46
=============================================================================================
Less distributions from net realized gains (2.28) --
=============================================================================================
Net asset value, end of period $ 28.53 $22.96
_____________________________________________________________________________________________
=============================================================================================
Total return(b) 37.77% 2.04%
_____________________________________________________________________________________________
=============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $12,339 $1,278
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets 2.23%(c) 2.33%(d)
_____________________________________________________________________________________________
=============================================================================================
Ratio of net investment income (loss) to average net assets (1.35)%(c) (1.32)%(d)
_____________________________________________________________________________________________
=============================================================================================
Portfolio turnover rate 242% 123%
_____________________________________________________________________________________________
=============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $6,015,947.
(d) Annualized.
FS-21
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Infrastructure Fund
and Board of Trustees of AIM Investment Funds
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 at October 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts December 18, 2000 |
FS-22
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC STOCKS & OTHER EQUITY
INTERESTS-64.37%
AEROSPACE/DEFENSE-2.04%
General Dynamics Corp. 9,000 $ 644,062
--------------------------------------------------------------
Northrop Grumman Corp. 5,300 445,200
==============================================================
1,089,262
==============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.09%
Entravision Communications
Corp.-Class A(a) 13,500 238,781
--------------------------------------------------------------
General Motors Corp.-Class H(a) 18,500 599,400
--------------------------------------------------------------
Univision Communications Inc.-Class
A(a) 7,400 283,050
==============================================================
1,121,231
==============================================================
COMMUNICATIONS EQUIPMENT-3.82%
Aether Systems, Inc.(a) 5,200 419,250
--------------------------------------------------------------
Corning Inc. 5,100 390,150
--------------------------------------------------------------
Efficient Networks, Inc.(a) 7,700 323,039
--------------------------------------------------------------
JDS Uniphase Corp.(a) 3,700 301,087
--------------------------------------------------------------
Redback Networks Inc.(a) 3,700 393,819
--------------------------------------------------------------
WJ Communications, Inc.(a) 14,500 217,500
==============================================================
2,044,845
==============================================================
COMPUTERS (HARDWARE)-1.73%
Sun Microsystems, Inc.(a) 3,600 399,150
--------------------------------------------------------------
Sycamore Networks, Inc.(a) 8,300 524,975
==============================================================
924,125
==============================================================
COMPUTERS (NETWORKING)-7.66%
Cisco Systems, Inc.(a) 35,968 1,937,776
--------------------------------------------------------------
Juniper Networks, Inc.(a) 9,000 1,755,000
--------------------------------------------------------------
VeriSign, Inc.(a) 3,100 409,200
==============================================================
4,101,976
==============================================================
COMPUTERS (PERIPHERALS)-1.96%
Brocade Communications Systems,
Inc.(a) 2,700 613,912
--------------------------------------------------------------
EMC Corp.(a) 4,900 436,406
==============================================================
1,050,318
==============================================================
COMPUTERS (SOFTWARE & SERVICES)-7.46%
Ariba, Inc.(a) 4,900 619,237
--------------------------------------------------------------
BEA Systems, Inc.(a) 9,300 667,275
--------------------------------------------------------------
i2 Technologies, Inc.(a) 5,300 901,000
--------------------------------------------------------------
Oracle Corp.(a) 13,400 442,200
--------------------------------------------------------------
StorageNetworks, Inc.(a) 6,400 406,000
--------------------------------------------------------------
VERITAS Software Corp.(a) 6,800 958,906
==============================================================
3,994,618
==============================================================
ELECTRIC COMPANIES-5.76%
FPL Group, Inc. 16,000 1,056,000
--------------------------------------------------------------
Montana Power Co. (The) 21,200 598,900
--------------------------------------------------------------
Pinnacle West Capital Corp. 21,000 912,188
--------------------------------------------------------------
SEI Trust I-Series A, $3.13 Conv.
Pfd. 3,700 225,006
--------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRIC COMPANIES-(CONTINUED)
Southern Energy, Inc.(a) 10,600 $ 288,850
==============================================================
3,080,944
==============================================================
ELECTRICAL EQUIPMENT-2.90%
Active Power, Inc.(a) 14,000 533,750
--------------------------------------------------------------
Capstone Turbine Corp.(a) 14,100 782,550
--------------------------------------------------------------
General Electric Co. 4,300 235,694
==============================================================
1,551,994
==============================================================
ELECTRONICS (DEFENSE)-0.93%
Raytheon Co.-Class B 14,600 499,138
==============================================================
ELECTRONICS (INSTRUMENTATION)-0.68%
Proton Energy Systems, Inc.(a) 13,700 366,475
==============================================================
ELECTRONICS (SEMICONDUCTORS)-1.43%
Analog Devices, Inc.(a) 5,000 325,000
--------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 6,300 440,606
==============================================================
765,606
==============================================================
ENGINEERING & CONSTRUCTION-0.64%
Quanta Services, Inc.(a) 11,000 341,688
==============================================================
NATURAL GAS-9.80%
Dynegy Inc.-Class A 10,700 495,544
--------------------------------------------------------------
El Paso Energy Corp. 13,000 814,938
--------------------------------------------------------------
Enron Corp. 45,800 3,758,463
--------------------------------------------------------------
TNPC, Inc.(a) 10,700 177,888
==============================================================
5,246,833
==============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-0.62%
Apache Corp. 6,000 331,875
==============================================================
POWER PRODUCERS (INDEPENDENT)-4.30%
AES Corp. (The)(a) 29,976 1,693,644
--------------------------------------------------------------
Calpine Capital Trust III-$2.50 Conv.
Pfd. (Acquired 08/03/00; Cost
$550,000)(b) 11,000 610,500
==============================================================
2,304,144
==============================================================
SERVICES (COMMERCIAL &
CONSUMER)-0.77%
Convergys Corp.(a) 9,500 413,844
==============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-2.90%
Level 3 Communications, Inc.(a) 6,000 286,125
--------------------------------------------------------------
Phone.com, Inc.(a) 10,900 1,008,931
--------------------------------------------------------------
Western Wireless Corp.-Class A(a) 5,400 256,500
==============================================================
1,551,556
==============================================================
TELEPHONE-6.88%
Broadwing Inc.(a) 11,700 330,525
--------------------------------------------------------------
Qwest Communications International
Inc.(a) 6,600 320,925
--------------------------------------------------------------
SBC Communications Inc. 32,000 1,846,000
--------------------------------------------------------------
|
FS-23
MARKET
SHARES VALUE
TELEPHONE-6.88%-(CONTINUED)
Verizon Communications 20,500 $ 1,185,156
==============================================================
3,682,606
==============================================================
Total Domestic Stocks & Other
Equity Interests (Cost
$22,242,544) 34,463,078
==============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-30.03%
BERMUDA-0.12%
Global Crossing Ltd., $17.50 Conv.
Pfd.
(Telecommunications-Cellular/Wireless)
(Acquired 12/09/99, Cost
$100,000)(b) 400 63,600
==============================================================
BRAZIL-0.76%
Companhia Paranaense de
Energia-Copel-ADR (Electric
Companies) 45,000 407,812
==============================================================
CANADA-0.94%
Nortel Networks Corp. (Communications
Equipment) 6,600 300,300
--------------------------------------------------------------
Stuart Energy Systems (Engineering &
Construction)(a) 13,300 201,159
==============================================================
501,459
==============================================================
FINLAND-1.92%
Nokia Oyj-ADR (Communications
Equipment) 24,000 1,026,000
==============================================================
FRANCE-2.72%
Suez Lyonnaise des Eaux S.A.
(Manufacturing-Diversified) 3,650 556,944
--------------------------------------------------------------
Total Fina Elf S.A.
(Oil-International Integrated) 1,700 243,240
--------------------------------------------------------------
Vivendi S.A.
(Manufacturing-Diversified) 9,100 654,114
==============================================================
1,454,298
==============================================================
GERMANY-0.79%
E.On A.G.
(Manufacturing-Diversified)(a) 8,320 422,940
==============================================================
ISRAEL-0.74%
Check Point Software Technologies
Ltd. (Computers-Software &
Services)(a) 2,500 395,937
==============================================================
ITALY-3.09%
ACEA S.p.A. (Water Utilities) 72,800 966,266
--------------------------------------------------------------
Telecom Italia S.p.A. (Telephone) 126,300 687,053
==============================================================
1,653,319
==============================================================
|
MARKET
SHARES VALUE
JAPAN-2.58%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long Distance) 30 $ 273,015
--------------------------------------------------------------
NTT DoCoMo, Inc.
(Telecommunications-Cellular/
Wireless) 45 1,109,380
==============================================================
1,382,395
==============================================================
NETHERLANDS-1.10%
Versatel Telecom International N.V.
(Telecommunications-Long
Distance)(a) 30,000 591,933
==============================================================
SOUTH KOREA-0.92%
Pohang Iron & Steel Co. Ltd.-ADR
(Iron & Steel) 31,200 493,350
==============================================================
SPAIN-3.43%
Endesa S.A. (Electric Companies) 11,600 189,011
--------------------------------------------------------------
Endesa S.A.-ADR (Electric Companies) 39,600 660,825
--------------------------------------------------------------
Telefonica S.A. (Telephone)(a) 22,700 432,870
--------------------------------------------------------------
Union Electrica Fenosa, S.A.
(Electric Companies) 30,000 554,763
==============================================================
1,837,469
==============================================================
UNITED KINGDOM-10.92%
Bookham Technology PLC
(Communications Equipment)(a) 15,400 507,157
--------------------------------------------------------------
COLT Telecom Group PLC (Telephone)(a) 15,800 504,507
--------------------------------------------------------------
Jazztel PLC-ADR (Telephone)(a) 11,800 208,713
--------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 95,060 824,371
--------------------------------------------------------------
Vodafone Group PLC
(Telecommunications-Cellular/Wireless) 913,891 3,803,513
==============================================================
5,848,261
==============================================================
Total Foreign Stocks & Other
Equity
Interests (Cost $10,143,907) 16,078,773
==============================================================
MONEY MARKET FUNDS-5.41%
STIC Liquid Assets Portfolio(c) 1,447,370 1,447,370
--------------------------------------------------------------
STIC Prime Portfolio(c) 1,447,370 1,447,370
==============================================================
Total Money Market Funds
(Cost $2,894,740) 2,894,740
==============================================================
TOTAL INVESTMENTS-99.81% (Cost
$35,281,191) 53,436,591
==============================================================
OTHER ASSETS LESS LIABILITIES-0.19% 99,061
==============================================================
NET ASSETS-100.00% $53,535,652
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Ltd. - Limited
Pfd. - Preferred
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The aggregate market value of these securities at 10/31/00
was $674,100 which represents 1.26% of the Fund's net assets.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-24
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost $35,281,191) $53,436,591
------------------------------------------------------------
Foreign currencies, at value (cost $195,633) 197,544
------------------------------------------------------------
Receivables for:
Investments sold 156,625
------------------------------------------------------------
Fund shares sold 19,187
------------------------------------------------------------
Dividends 87,502
------------------------------------------------------------
Collateral for securities loaned 2,374,729
------------------------------------------------------------
Other assets 7,362
============================================================
Total assets $56,279,540
============================================================
LIABILITIES:
Payables for:
Fund shares reacquired 181,744
------------------------------------------------------------
Collateral upon return of securities loaned 2,374,729
------------------------------------------------------------
Accrued advisory fees 21,144
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 37,768
------------------------------------------------------------
Accrued trustees' fees 888
------------------------------------------------------------
Accrued transfer agent fees 15,920
------------------------------------------------------------
Accrued operating expenses 107,460
============================================================
Total liabilities 2,743,888
============================================================
Net assets applicable to shares outstanding $53,535,652
____________________________________________________________
============================================================
NET ASSETS:
Class A $24,745,356
____________________________________________________________
============================================================
Class B $28,378,220
____________________________________________________________
============================================================
Class C $ 412,076
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 1,343,110
____________________________________________________________
============================================================
Class B 1,590,458
____________________________________________________________
============================================================
Class C 23,128
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 18.42
------------------------------------------------------------
Offering price per share:
(Net asset value of $18.42 divided by
95.25%) $ 19.34
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 17.84
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 17.82
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$34,576) $ 451,954
------------------------------------------------------------
Dividends from affiliated money market funds 200,113
------------------------------------------------------------
Interest 21,916
------------------------------------------------------------
Security lending income 33,273
============================================================
Total investment income 707,256
============================================================
EXPENSES:
Advisory fees 551,358
------------------------------------------------------------
Administrative services fees 50,000
------------------------------------------------------------
Custodian fees 28,631
------------------------------------------------------------
Distribution fees -- Class A 127,803
------------------------------------------------------------
Distribution fees -- Class B 307,927
------------------------------------------------------------
Distribution fees -- Class C 1,909
------------------------------------------------------------
Transfer agent fees 155,887
------------------------------------------------------------
Trustees' fees 8,845
------------------------------------------------------------
Other 172,656
============================================================
Total expenses 1,405,016
============================================================
Less: Fees waived (116,307)
------------------------------------------------------------
Expenses paid indirectly (1,396)
============================================================
Net expenses 1,287,313
============================================================
Net investment income (loss) (580,057)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 10,147,564
------------------------------------------------------------
Foreign currencies (66,282)
------------------------------------------------------------
Futures contracts (38,703)
------------------------------------------------------------
Option contracts written 38,001
============================================================
10,080,580
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 1,683,622
------------------------------------------------------------
Foreign currencies (3,494)
============================================================
1,680,128
============================================================
Net gain on investment securities, foreign
currencies, futures contracts and option
contracts 11,760,708
============================================================
Net increase in net assets resulting from
operations $11,180,651
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-25
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
----------- ------------
OPERATIONS:
Net investment income (loss) $ (580,057) $ (65,857)
-----------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 10,080,580 5,560,967
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and futures contracts 1,680,128 5,993,037
=========================================================================================
Net increase in net assets resulting from operations 11,180,651 11,488,147
=========================================================================================
Distributions to shareholders from net investment income:
Class A -- (90,183)
-----------------------------------------------------------------------------------------
Advisor Class* -- (56,937)
-----------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (2,273,919) (1,403,586)
-----------------------------------------------------------------------------------------
Class B (2,931,748) (1,925,203)
-----------------------------------------------------------------------------------------
Class C (1,316) --
-----------------------------------------------------------------------------------------
Advisor Class* (2,002) (392,100)
-----------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,980,892 (6,581,799)
-----------------------------------------------------------------------------------------
Class B 30,946 (11,163,548)
-----------------------------------------------------------------------------------------
Class C 450,664 14,334
-----------------------------------------------------------------------------------------
Advisor Class* (22,973) (7,642,305)
=========================================================================================
Net increase (decrease) in net assets 8,411,195 (17,753,180)
=========================================================================================
NET ASSETS:
Beginning of year 45,124,457 62,877,637
=========================================================================================
End of year $53,535,652 $ 45,124,457
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $27,414,002 $ 22,848,512
-----------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures contracts and
option contracts 7,972,318 5,806,741
-----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 18,149,332 16,469,204
=========================================================================================
$53,535,652 $ 45,124,457
_________________________________________________________________________________________
=========================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
See Notes to Financial Statements.
FS-26
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Infrastructure Fund (the "Fund") is a separate series of AIM
Investment Funds (the "Trust"). The Trust is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end series management investment company consisting
of nine separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital. At a meeting
held on May 23 and 24, 2000, the Board of Trustees approved a restructuring of
the Fund to eliminate the master-feeder structure. The Fund, which had invested
substantially all of its investable assets in the Global Infrastructure
Portfolio (the "Portfolio"), a Delaware business trust, would now invest
directly in the securities in which the Portfolio had invested. The
restructuring of the Fund was approved by Shareholders of the Fund at a meeting
held on September 1, 2000 and was completed on September 8, 2000.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- Securities, including restricted securities, are
valued according to the following policy. A security listed or traded on an
exchange (except convertible bonds) is valued at its last sales price as of
the close of the customary trading session on the exchange where the security
is principally traded, or lacking any sales on a particular day, the security
is valued at the closing bid price on that day. Each security reported on the
NASDAQ National Market System is valued at the last sales price as of the
close of the customary trading session on the valuation date or absent a last
sales price, at the closing bid price. Debt obligations (including
convertible bonds) are valued on the basis of prices provided by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate and maturity
date. Securities for which market prices are not provided by any of the above
methods are valued based upon quotes furnished by independent sources and are
valued at the last bid price in the case of equity securities and in the case
of debt obligations, the mean between the last bid and asked prices.
Securities for which market quotations are not readily available or are
questionable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers in a manner specifically authorized
by the Board of Trustees. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value. For
purposes of determining net asset value per share, futures and option
contracts generally will be valued 15 minutes after the close of the
customary trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$580,057, undistributed net realized gains decreased by $2,706,018 and paid
in capital increased by $2,125,961 as a result of book/tax differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, foreign currency transactions and net
operating loss reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
FS-27
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded 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 written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
H. Futures Contracts -- The Fund may purchase or sell futures contracts as a
hedge against changes in market conditions. Initial margin deposits required
upon entering into futures contracts are satisfied by the segregation of
specific securities as collateral for the account of the broker (the Fund's
agent in acquiring the futures position). During the period the futures
contracts are open, changes in the value of the contracts are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contracts at the end of each day's trading. Variation
margin payments are made or received depending upon whether unrealized gains
or losses are incurred. When the contracts are closed, the Fund recognizes a
realized gain or loss equal to the difference between the proceeds from, or
cost of, the closing transaction and the Fund's basis in the contract. Risks
include the possibility of an illiquid market and that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
I. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividend expense on short sales, extraordinary items and
increases in expenses due to offset arrangements, if any) for Class A, Class B
and Class C shares to 2.00%, 2.50% and 2.50%, respectively. During the year
ended October 31, 2000, AIM waived fees of $116,307.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to
FS-28
the Fund. For the year ended October 31, 2000, AIM was paid $50,000 for such
services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended October 31, 2000, AFS was
paid $103,999 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $127,803, $307,927
and $1,909, respectively, as compensation under the Plans.
AIM Distributors received commissions of $9,122 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $6,965 in contingent deferred sales charges imposed on
redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $654 and reductions in custodian fees of $742 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $1,396.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended October 31,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $2,328,166 were on
loan to brokers. The loans were secured by cash collateral of $2,374,729
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $33,273 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$34,698,925 and $39,280,658, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 19,709,582 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (1,554,182) ========================================================= Net unrealized appreciation of investment securities $ 18,155,400 _________________________________________________________ ========================================================= Investments have the same cost for tax and financial statement purposes. |
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF CONTRACTS
PREMIUMS RECEIVED
--------- ---------
Beginning of year -- $ --
---------------------------------------------------------
Written 135 53,593
---------------------------------------------------------
Closed (135) (53,593)
=========================================================
End of year -- $ --
_________________________________________________________
=========================================================
|
FS-29
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ ---------- ------------
Sold:
Class A 661,981 $ 12,809,797 162,299 $ 2,474,900
--------------------------------------------------------------------------------------------------------------------
Class B 222,164 4,334,670 80,398 1,180,744
--------------------------------------------------------------------------------------------------------------------
Class C* 32,764 654,226 976 14,334
--------------------------------------------------------------------------------------------------------------------
Advisor Class** 1 15 29,602 453,399
====================================================================================================================
Issued as reinvestment of dividends:
Class A 128,271 2,153,369 102,312 1,428,280
--------------------------------------------------------------------------------------------------------------------
Class B 164,254 2,682,268 126,907 1,737,353
--------------------------------------------------------------------------------------------------------------------
Class C* 81 1,316 -- --
--------------------------------------------------------------------------------------------------------------------
Advisor Class** 51 875 32,402 459,131
====================================================================================================================
Issued in connection with acquisitions:***
Class A 1,119 23,863 -- --
--------------------------------------------------------------------------------------------------------------------
Advisor Class (1,094) (23,863) -- --
====================================================================================================================
Reacquired:
Class A (670,570) (13,006,137) (701,304) (10,484,979)
--------------------------------------------------------------------------------------------------------------------
Class B (372,887) (6,985,992) (963,484) (14,081,645)
--------------------------------------------------------------------------------------------------------------------
Class C* (10,693) (204,878) -- --
--------------------------------------------------------------------------------------------------------------------
Advisor Class** -- -- (544,836) (8,554,835)
====================================================================================================================
155,442 $ 2,439,529 (1,674,728) $(25,373,318)
____________________________________________________________________________________________________________________
====================================================================================================================
|
* Class C shares commenced sales on March 1, 1999. ** Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). *** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
Net asset value, beginning of period $16.33 $ 14.18 $15.01 $14.42 $ 12.11
-------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15) -- 0.07 (0.01) (0.03)
-------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 4.16 3.07 (0.79) 1.32 2.34
===================================================================================================================
Total from investment operations 4.01 3.07 (0.72) 1.31 2.31
===================================================================================================================
Less distributions:
Dividends from net investment income -- (0.07) -- -- --
-------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.92) (0.85) (0.11) (0.72) --
===================================================================================================================
Total distributions (1.92) (0.92) (0.11) (0.72) --
===================================================================================================================
Net asset value, end of period $18.42 $ 16.33 $14.18 $15.01 $ 14.42
___________________________________________________________________________________________________________________
===================================================================================================================
Total return(b) 25.71% 22.72% (4.82)% 9.38% 19.08%
___________________________________________________________________________________________________________________
===================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $24,745 $19,958 $23,531 $38,281 $38,397
===================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.00%(c) 2.00% 1.99% 2.00% 2.14%
-------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.21%(c) 2.22% 2.23% 2.08% 2.25%
-------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (0.75)%(c) 0.09% 0.52% (0.09)% (0.19)%
___________________________________________________________________________________________________________________
===================================================================================================================
Portfolio turnover rate 66% 49% 96% 41% 41%
___________________________________________________________________________________________________________________
===================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $25,566,123.
FS-30
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
Net asset value, beginning of period $ 15.94 $ 13.87 $ 14.75 $ 14.24 $ 12.03
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.24) (0.06) -- (0.09) (0.09)
-----------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 4.06 2.98 (0.77) 1.32 2.30
=================================================================================================================
Total from investment operations 3.82 2.92 (0.77) 1.23 2.21
=================================================================================================================
Less distributions from net realized gains (1.92) (0.85) (0.11) (0.72) --
=================================================================================================================
Net asset value, end of period $ 17.84 $ 15.94 $ 13.87 $ 14.75 $ 14.24
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 25.09% 22.03% (5.31)% 8.83% 18.37%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $28,378 $25,134 $32,349 $57,199 $53,678
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50% 2.49% 2.50% 2.64%
-----------------------------------------------------------------------------------------------------------------
Without fee waivers 2.71%(c) 2.72% 2.73% 2.58% 2.75%
=================================================================================================================
Ratio of net investment income (loss) to average net assets (1.25)%(c) (0.41)% 0.02% (0.59)% (0.69)%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 66% 49% 96% 41% 41%
_________________________________________________________________________________________________________________
=================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $30,792,736.
CLASS C
----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999(a)
----------- -------------
Net asset value, beginning of period $15.94 $13.99
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.24) (0.03)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.04 1.98
==========================================================================================
Total from investment operations 3.80 1.95
==========================================================================================
Less distributions from net realized gains (1.92) --
==========================================================================================
Net asset value, end of period $17.82 $15.94
__________________________________________________________________________________________
==========================================================================================
Total return(b) 24.94% 13.94%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 412 $ 16
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50%(d)
------------------------------------------------------------------------------------------
Without fee waivers 2.71%(c) 2.72%(d)
==========================================================================================
Ratio of net investment income (loss) to average net assets (1.25)%(c) (0.41)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 66% 49%
__________________________________________________________________________________________
==========================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $190,872.
(d) Annualized.
FS-31
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Resources Fund
and Board of Trustees of AIM Investment Funds:
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 at October 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America 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, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts December 18, 2000 |
FS-32
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-65.67%
AUTO PARTS & EQUIPMENT-1.16%
IMPCO Technologies, Inc.(a) 15,800 $ 311,062
=============================================================
CHEMICALS-1.59%
Du Pont (E. I.) de Nemours & Co. 4,669 211,856
-------------------------------------------------------------
Solutia Inc. 16,800 214,200
=============================================================
426,056
=============================================================
ELECTRIC COMPANIES-2.62%
Avista Corp. 25,000 560,937
-------------------------------------------------------------
Southern Energy, Inc.(a) 5,200 141,700
=============================================================
702,637
=============================================================
ELECTRICAL EQUIPMENT-3.52%
Active Power, Inc.(a) 6,300 240,187
-------------------------------------------------------------
Capstone Turbine Corp.(a) 3,600 199,800
-------------------------------------------------------------
Electric Fuel Corp.(a) 55,000 501,875
=============================================================
941,862
=============================================================
ELECTRONICS (INSTRUMENTATION)-2.33%
Hydrogencis Corp.(a) 8,800 106,150
-------------------------------------------------------------
Proton Energy Systems, Inc.(a) 19,400 518,950
=============================================================
625,100
=============================================================
NATURAL GAS-15.46%
Dynegy Inc.-Class A 25,000 1,157,812
-------------------------------------------------------------
El Paso Energy Corp. 10,000 626,875
-------------------------------------------------------------
Enron Corp. 19,700 1,616,631
-------------------------------------------------------------
Equitable Resources, Inc. 8,500 493,000
-------------------------------------------------------------
TNPC, Inc.(a) 15,000 249,375
=============================================================
4,143,693
=============================================================
OIL & GAS (DRILLING & EQUIPMENT)-7.60%
BJ Services Co.(a) 12,400 650,225
-------------------------------------------------------------
Chiles Offshore, Inc.(a) 13,000 208,000
-------------------------------------------------------------
Cooper Cameron Corp.(a) 7,800 425,100
-------------------------------------------------------------
Oceaneering International, Inc.(a) 15,500 217,969
-------------------------------------------------------------
RPC, Inc. 5,200 64,675
-------------------------------------------------------------
Schlumberger Ltd. 5,500 418,688
-------------------------------------------------------------
Transocean Sedco Forex Inc. 952 50,456
=============================================================
2,035,113
=============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-20.07%
Anadarko Petroleum Corp. 15,000 960,750
-------------------------------------------------------------
Apache Corp. 15,000 829,688
-------------------------------------------------------------
Barrett Resources Corp.(a) 15,600 567,450
-------------------------------------------------------------
BP Prudhoe Bay Royalty Trust 100,000 1,206,250
-------------------------------------------------------------
|
MARKET
SHARES VALUE
OIL & GAS (EXPLORATION &
PRODUCTION)-(CONTINUED)
Cross Timbers Oil Co. 30,000 $ 564,375
-------------------------------------------------------------
EOG Resources, Inc. 21,300 838,688
-------------------------------------------------------------
Triton Energy Ltd.(a) 13,400 412,050
=============================================================
5,379,251
=============================================================
OIL & GAS (REFINING & MARKETING)-1.85%
Valero Energy Corp. 15,000 495,938
=============================================================
OIL (DOMESTIC INTEGRATED)-2.87%
Conoco Inc.-Class B 28,326 770,113
=============================================================
OIL (INTERNATIONAL INTEGRATED)-5.89%
Chevron Corp. 10,000 821,250
-------------------------------------------------------------
Exxon Mobil Corp. 8,492 757,380
=============================================================
1,578,630
=============================================================
PAPER & FOREST PRODUCTS-0.71%
International Paper Co. 5,200 190,450
=============================================================
Total Domestic Common Stocks (Cost
$16,236,311) 17,599,905
=============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-30.01%
BELGIUM-1.16%
Solvay S.A. (Chemicals-Diversified) 6,100 310,606
=============================================================
CANADA-19.92%
Alberta Energy Co. Ltd. (Oil &
Gas-Exploration & Production) 20,000 736,594
-------------------------------------------------------------
Anderson Exploration Ltd.
(Oil-Domestic Integrated)(a) 30,000 549,990
-------------------------------------------------------------
Baytex Energy Ltd. (Oil &
Gas-Exploration & Production)(a) 30,000 225,889
-------------------------------------------------------------
Cypress Energy Inc.-Class A (Oil &
Gas-Exploration & Production)(a) 75,000 356,020
-------------------------------------------------------------
European Goldfields Ltd. (Metals
Mining)(a) 44,000 50,416
-------------------------------------------------------------
Nexen Inc. (Oil & Gas-Exploration &
Production) 17,700 424,740
-------------------------------------------------------------
Petro-Canada (Oil-Domestic Integrated) 10,000 209,520
-------------------------------------------------------------
Placer Dome Inc. (Gold & Precious
Metals Mining) 64,700 531,203
-------------------------------------------------------------
Stuart Energy Systems (Engineering &
Construction)(a) 55,000 831,860
-------------------------------------------------------------
Talisman Energy Inc. (Oil &
Gas-Exploration & Production)(a) 35,000 1,098,835
-------------------------------------------------------------
Westcoast Energy Inc. (Natural Gas) 14,500 322,792
=============================================================
5,337,859
=============================================================
DENMARK-2.30%
Vestas Wind Systems A.S.
(Manufacturing-Specialized) 11,400 617,488
=============================================================
|
FS-33
MARKET
SHARES VALUE
FRANCE-3.74%
Air Liquide S.A.
(Chemicals-Specialty)(a) 3,960 $ 468,139
-------------------------------------------------------------
Bouygues Offshore S.A.-ADR (Oil &
Gas-Drilling & Equipment) 21,700 534,362
=============================================================
1,002,501
=============================================================
IRELAND-1.12%
Jefferson Smurfit Group PLC-ADR
(Containers & Packaging-Paper) 16,500 299,063
=============================================================
UNITED KINGDOM-1.77%
Enterprise Oil PLC (Oil &
Gas-Exploration & Production) 60,000 474,608
=============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$7,854,729) 8,042,125
=============================================================
|
MARKET
SHARES VALUE
MONEY MARKET FUNDS-4.39%
STIC Liquid Assets Portfolio(b) 588,613 $ 588,613
-------------------------------------------------------------
STIC Prime Portfolio(b) 588,613 588,613
=============================================================
Total Money Market Funds (Cost
$1,177,226) 1,177,226
=============================================================
TOTAL INVESTMENTS-100.07% (Cost
$25,268,266) 26,819,256
=============================================================
LIABILITIES LESS OTHER ASSETS-(0.07%) (19,161)
=============================================================
NET ASSETS-100.00% $26,800,095
_____________________________________________________________
=============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-34
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost $25,268,266) $26,819,256
------------------------------------------------------------
Foreign currencies, at value (cost $227,873) 228,354
------------------------------------------------------------
Receivables for:
Fund shares sold 2,094
------------------------------------------------------------
Dividends 15,263
------------------------------------------------------------
Collateral for securities loaned 326,069
------------------------------------------------------------
Other assets 8,648
============================================================
Total assets $27,399,684
============================================================
LIABILITIES:
Payables for:
Investments purchased 105,600
------------------------------------------------------------
Fund shares reacquired 76,704
------------------------------------------------------------
Collateral upon return of securities loaned 326,069
------------------------------------------------------------
Accrued advisory fees 1,600
------------------------------------------------------------
Accrued administrative services fees 4,098
------------------------------------------------------------
Accrued distribution fees 19,441
------------------------------------------------------------
Accrued trustees' fees 742
------------------------------------------------------------
Accrued transfer agent fees 13,920
------------------------------------------------------------
Accrued operating expenses 51,415
============================================================
Total liabilities 599,589
============================================================
Net assets applicable to shares outstanding $26,800,095
____________________________________________________________
============================================================
NET ASSETS:
Class A $12,637,530
____________________________________________________________
============================================================
Class B $13,709,666
____________________________________________________________
============================================================
Class C $ 452,899
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 1,033,899
____________________________________________________________
============================================================
Class B 1,154,463
____________________________________________________________
============================================================
Class C 38,132
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 12.22
------------------------------------------------------------
Offering price per share:
(Net asset value of $12.22 divided by
95.25%) $ 12.83
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 11.88
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 11.88
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$20,402) $ 538,824
-----------------------------------------------------------
Dividends from affiliated money market funds 112,419
-----------------------------------------------------------
Interest 1,520
-----------------------------------------------------------
Security lending income 13,297
===========================================================
Total investment income 666,060
===========================================================
EXPENSES:
Advisory fees 296,957
-----------------------------------------------------------
Administrative services fees 50,000
-----------------------------------------------------------
Custodian fees 13,478
-----------------------------------------------------------
Distribution fees -- Class A 69,673
-----------------------------------------------------------
Distribution fees -- Class B 163,259
-----------------------------------------------------------
Distribution fees -- Class C 2,711
-----------------------------------------------------------
Transfer agent fees 154,921
-----------------------------------------------------------
Professional fees 100,080
-----------------------------------------------------------
Trustees' fees 5,512
-----------------------------------------------------------
Other 81,185
===========================================================
Total expenses 937,776
===========================================================
Less: Fees waived (242,924)
-----------------------------------------------------------
Expenses paid indirectly (510)
===========================================================
Net expenses 694,342
===========================================================
Net investment income (loss) (28,282)
===========================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) from:
Investment securities (359,827)
-----------------------------------------------------------
Foreign currencies (80,004)
===========================================================
(439,831)
===========================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 603,678
-----------------------------------------------------------
Foreign currencies (630)
===========================================================
603,048
===========================================================
Net gain from investment securities and foreign
currencies 163,217
===========================================================
Net increase in net assets resulting from
operations $ 134,935
___________________________________________________________
===========================================================
|
See Notes to Financial Statements.
FS-35
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
------------ ------------
OPERATIONS:
Net investment income (loss) $ (28,282) $ (15,497)
------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies (439,831) (1,210,414)
------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 603,048 5,873,517
==========================================================================================
Net increase in net assets resulting from operations 134,935 4,647,606
==========================================================================================
Share transactions-net:
Class A (3,338,400) (5,463,882)
------------------------------------------------------------------------------------------
Class B (6,401,000) (11,256,193)
------------------------------------------------------------------------------------------
Class C 428,516 43,424
------------------------------------------------------------------------------------------
Advisor Class* (22,444) (5,519,490)
==========================================================================================
Net increase (decrease) in net assets (9,198,393) (17,548,535)
==========================================================================================
NET ASSETS:
Beginning of year 35,998,488 53,547,023
==========================================================================================
End of year $ 26,800,095 $ 35,998,488
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 48,851,091 $ 58,323,182
------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (23,601,065) (23,271,715)
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 1,550,069 947,021
==========================================================================================
$ 26,800,095 $ 35,998,488
__________________________________________________________________________________________
==========================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of close of business on February 11, 2000.
See Notes to Financial Statements.
FS-36
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Resources Fund (the "Fund") is a separate series of AIM Investment
Funds (the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of nine
separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital. The Fund
invests substantially all of its investable assets in Global Resources Portfolio
(the "Portfolio"). The Portfolio is organized as a Delaware business trust which
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 the 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, 2000, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or an affiliated INVESCO entity.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund and the Portfolio in the preparation of
its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available or are questionable are valued at fair
value as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$28,282, undistributed net realized gains (losses) increased by $110,481 and
paid-in capital decreased by $138,763 as a result of differing book/tax
treatment of foreign currency transactions and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify
FS-37
as a regulated investment company and, as such, will not be subject to
federal income taxes on otherwise taxable income (including net realized
capital gains) which is distributed to shareholders. Therefore, no provision
for federal income taxes is recorded in the financial statements.
The Fund has a capital loss carryforward of $23,578,846 as of October 31,
2000, which may be carried forward to offset future taxable gains, if any,
which expires, if not previously utilized, in the year 2008.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Portfolio may enter into a foreign currency contract to attempt to
minimize the risk to the Portfolio from adverse changes in the relationship
between currencies. The Portfolio may also enter into a foreign currency
contract for the purchase or sale of a security denominated in a foreign
currency in order to "lock in" the U.S. dollar price of that security. The
Portfolio could be exposed to risk if counterparties to the contracts are
unable to meet the terms of their contracts or if the value of the foreign
currency changes unfavorably.
G. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividend expense on short sales, extraordinary items and
increases in expenses due to offset arrangements, if any) for Class A, Class B
and Class C shares to 2.00%, 2.50% and 2.50%, respectively. During the year
ended October 31, 2000, AIM waived fees of $242,924.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund and the Portfolio. For the year ended October
31, 2000, AIM was paid $50,000 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended October 31, 2000, AFS was
paid $101,769 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $69,673, $163,259
and $2,711, respectively, as compensation under the Plans.
AIM Distributors received commissions of $4,984 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $516 in contingent deferred sales charges imposed on
redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $400 and reductions in custodian fees of $110 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $510.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended October 31,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed
FS-38
line. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $319,675 were on
loan to brokers. The loans were secured by cash collateral of $326,069 received
by the Portfolio. For the year ended October 31, 2000, the Portfolio received
fees of $13,297 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the year ended October 31, 2000 was
$29,894,843 and $38,725,160, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 3,174,505 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (1,645,733) ========================================================= Net unrealized appreciation of investment securities $ 1,528,772 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $25,290,484 |
FS-39
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
----------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- ------------
Sold:
Class A 434,021 $ 5,508,796 1,483,872 $ 16,786,501
---------------------------------------------------------------------------------------------------------------------
Class B 255,733 3,154,314 623,453 7,240,416
---------------------------------------------------------------------------------------------------------------------
Class C* 77,757 964,884 10,161 124,881
---------------------------------------------------------------------------------------------------------------------
Advisor Class** 1,495 269,584 40,141 464,770
=====================================================================================================================
Conversion of Advisor Class shares to Class A shares***:
Class A 16,352 194,590 -- --
---------------------------------------------------------------------------------------------------------------------
Advisor Class** (16,069) (194,590) -- --
=====================================================================================================================
Reacquired:
Class A (708,505) (9,041,786) (1,968,466) (22,250,382)
---------------------------------------------------------------------------------------------------------------------
Class B (792,579) (9,555,314) (1,629,584) (18,496,610)
---------------------------------------------------------------------------------------------------------------------
Class C* (43,052) (536,368) (6,734) (81,457)
---------------------------------------------------------------------------------------------------------------------
Advisor Class** (7,719) (97,438) (477,178) (5,984,260)
=====================================================================================================================
(782,566) $(9,333,328) (1,924,335) $(22,196,141)
_____________________________________________________________________________________________________________________
=====================================================================================================================
|
* Class C shares commenced sales on March 1, 1999. ** Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). *** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
Net asset value, beginning of period $ 12.12 $ 10.95 $ 20.65 $ 17.43 $ 11.44
-------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.02 0.02 (0.11) (0.25) (0.24)
-------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 0.08 1.15 (8.91) 4.08 6.28
===================================================================================================================
Total from investment operations 0.10 1.17 (9.02) 3.83 6.04
===================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.19) -- (0.04)
-------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (0.49) (0.61) (0.01)
===================================================================================================================
Total distributions -- -- (0.68) (0.61) (0.05)
===================================================================================================================
Net asset value, end of period $ 12.22 $ 12.12 $ 10.95 $ 20.65 $ 17.43
___________________________________________________________________________________________________________________
===================================================================================================================
Total return(b) 0.74% 10.68% (45.02)% 22.64% 53.04%
___________________________________________________________________________________________________________________
===================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $12,638 $15,664 $19,463 $69,975 $48,729
___________________________________________________________________________________________________________________
===================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.00%(c) 2.00% 1.98% 2.03% 2.20%
-------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.80%(c) 2.30% 2.29% 2.13% 2.30%
===================================================================================================================
Ratio of net investment income (loss) to average net assets 0.18%(c) 0.19% (0.75)% (1.41)% (1.55)%
___________________________________________________________________________________________________________________
===================================================================================================================
Portfolio turnover rate 105% 123% 201% 321% 94%
___________________________________________________________________________________________________________________
===================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $13,934,536.
FS-40
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
------- ------- ------- ------- -------
Net asset value, beginning of period $11.84 $10.75 $20.37 $17.29 $ 11.36
-------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.04) (0.18) (0.33) (0.31)
-------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 0.08 1.13 (8.76) 4.02 6.25
===================================================================================================================
Total from investment operations 0.04 1.09 (8.94) 3.69 5.94
===================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.19) -- --
-------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (0.49) (0.61) (0.01)
===================================================================================================================
Total distributions -- -- (0.68) (0.61) (0.01)
===================================================================================================================
Net asset value, end of period $11.88 $11.84 $10.75 $20.37 $ 17.29
___________________________________________________________________________________________________________________
===================================================================================================================
Total return(b) 0.34% 10.14% (45.25)% 21.99% 52.39%
___________________________________________________________________________________________________________________
===================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $13,710 $20,019 $28,996 $86,812 $57,749
___________________________________________________________________________________________________________________
===================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50% 2.48% 2.53% 2.70%
-------------------------------------------------------------------------------------------------------------------
Without fee waivers 3.30%(c) 2.80% 2.79% 2.63% 2.80%
===================================================================================================================
Ratio of net investment income (loss) to average net assets (0.32)%(c) (0.31)% (1.25)% (1.91)% (2.05)%
___________________________________________________________________________________________________________________
===================================================================================================================
Portfolio turnover rate 105% 123% 201% 321% 94%
___________________________________________________________________________________________________________________
===================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $16,325,863.
CLASS C
----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999(a)
----------- -------------
Net asset value, beginning of period $11.84 $10.00
--------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.03)
--------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.08 1.87
============================================================================================
Total from investment operations 0.04 1.84
============================================================================================
Net asset value, end of period $11.88 $11.84
____________________________________________________________________________________________
============================================================================================
Total return(b) 0.34% 18.40%
____________________________________________________________________________________________
============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 453 $ 41
____________________________________________________________________________________________
============================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50%(d)
--------------------------------------------------------------------------------------------
Without fee waivers 3.30%(c) 2.80%(d)
============================================================================================
Ratio of net investment income (loss) to average net assets (0.32)%(c) (0.31)%(d)
____________________________________________________________________________________________
============================================================================================
Portfolio turnover rate 105% 123%
____________________________________________________________________________________________
============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $271,111.
(d) Annualized.
FS-41
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Telecommunications and Technology Fund and Board of Trustees of AIM Investment Funds:
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 Telecommunications and Technology Fund at October 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America 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, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts December 18, 2000 |
FS-42
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-86.95%
BIOTECHNOLOGY-5.95%
Amgen Inc.(a) 342,000 $ 19,814,625
---------------------------------------------------------------
PE Corp-Celera Genomics Group(a) 150,000 10,125,000
---------------------------------------------------------------
Cephalon, Inc.(a) 394,000 21,128,250
---------------------------------------------------------------
Ciphergen Biosystems, Inc.(a) 147,300 4,566,300
---------------------------------------------------------------
Human Genome Sciences, Inc.(a) 250,000 22,097,656
---------------------------------------------------------------
IDEC Pharmaceuticals Corp.(a) 248,000 48,639,000
---------------------------------------------------------------
Incyte Genomics, Inc.(a) 1,098,500 40,232,562
---------------------------------------------------------------
Millennium Pharmaceuticals,
Inc.(a) 200,000 14,512,500
===============================================================
181,115,893
===============================================================
COMMUNICATIONS EQUIPMENT-14.91%
CIENA Corp.(a) 1,000,000 105,125,000
---------------------------------------------------------------
Corning Inc. 1,611,000 123,241,500
---------------------------------------------------------------
Finisar Corp.(a) 900,000 25,931,250
---------------------------------------------------------------
JDS Uniphase Corp.(a) 1,221,000 99,358,875
---------------------------------------------------------------
Redback Networks Inc.(a) 350,000 37,253,125
---------------------------------------------------------------
Scientific-Atlanta, Inc. 464,000 31,755,000
---------------------------------------------------------------
Sunrise Telecom Inc.(a) 388,400 9,661,450
---------------------------------------------------------------
Turnstone Systems, Inc.(a) 1,000,000 21,250,000
===============================================================
453,576,200
===============================================================
COMPUTERS (HARDWARE)-6.26%
Handspring, Inc.(a) 500,000 36,156,250
---------------------------------------------------------------
McDATA Corp.-Class B(a) 245,000 20,423,047
---------------------------------------------------------------
Palm, Inc.(a) 1,300,000 69,631,250
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 580,000 64,307,500
===============================================================
190,518,047
===============================================================
COMPUTERS (NETWORKING)-11.77%
Cisco Systems, Inc.(a) 1,900,000 102,362,500
---------------------------------------------------------------
Emulex Corp.(a) 130,000 19,093,750
---------------------------------------------------------------
Exodus Communications, Inc.(a) 857,500 28,779,844
---------------------------------------------------------------
Juniper Networks, Inc.(a) 850,000 165,750,000
---------------------------------------------------------------
VeriSign, Inc.(a) 320,000 42,240,000
===============================================================
358,226,094
===============================================================
COMPUTERS (PERIPHERALS)-12.24%
Brocade Communications Systems,
Inc.(a) 770,000 175,078,750
---------------------------------------------------------------
EMC Corp.(a) 900,000 80,156,250
---------------------------------------------------------------
Network Appliance, Inc.(a) 925,000 110,075,000
---------------------------------------------------------------
SanDisk Corp.(a) 133,000 7,146,672
===============================================================
372,456,672
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-15.85%
Ariba, Inc.(a) 403,000 50,929,125
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Art Technology Group, Inc.(a) 200,000 $ 12,550,000
---------------------------------------------------------------
BEA Systems, Inc.(a) 500,000 35,875,000
---------------------------------------------------------------
Blue Martini Software, Inc.(a) 262,700 9,884,087
---------------------------------------------------------------
i2 Technologies, Inc.(a) 136,000 23,120,000
---------------------------------------------------------------
Inktomi Corp.(a) 400,000 25,375,000
---------------------------------------------------------------
Oracle Corp.(a) 2,600,000 85,800,000
---------------------------------------------------------------
Siebel Systems, Inc.(a) 1,000,000 104,937,500
---------------------------------------------------------------
StorageNetworks, Inc.(a) 100,000 6,343,750
---------------------------------------------------------------
VERITAS Software Corp.(a) 727,800 102,631,172
---------------------------------------------------------------
WatchGuard Technologies, Inc.(a) 500,000 25,000,000
===============================================================
482,445,634
===============================================================
ELECTRICAL EQUIPMENT-0.22%
Stratos Lightwave, Inc.(a) 255,500 6,754,781
===============================================================
ELECTRONICS (INSTRUMENTATION)-1.13%
Alpha Industries, Inc.(a) 300,000 11,962,500
---------------------------------------------------------------
Newport Corp. 195,000 22,269,609
===============================================================
34,232,109
===============================================================
ELECTRONICS (SEMICONDUCTORS)-12.81%
Analog Devices, Inc.(a) 540,000 35,100,000
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 2,000,000 152,875,000
---------------------------------------------------------------
GlobeSpan, Inc.(a) 322,000 24,773,875
---------------------------------------------------------------
SDL, Inc.(a) 500,000 129,625,000
---------------------------------------------------------------
TranSwitch Corp.(a) 181,800 10,498,950
---------------------------------------------------------------
Triquint Semiconductor, Inc.(a) 965,800 37,002,213
===============================================================
389,875,038
===============================================================
EQUIPMENT (SEMICONDUCTOR)-2.82%
Broadcom Corp.-Class A(a) 386,100 85,858,988
===============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.61%
Genentech, Inc.(a) 224,000 18,480,000
===============================================================
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-0.96%
PE Corp-PE Biosystems Group 250,000 29,250,000
===============================================================
SERVICES (DATA PROCESSING)-0.39%
Paychex, Inc. 210,200 11,915,713
===============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-1.03%
Phone.com, Inc.(a) 340,000 31,471,250
===============================================================
Total Domestic Common Stocks
(Cost $2,011,888,892) 2,646,176,419
===============================================================
|
FS-43
MARKET
SHARES VALUE
FOREIGN STOCKS-9.50%
BERMUDA-0.70%
TyCom, Ltd. (Communications
Equipment)(a) 631,200 $ 21,145,200
===============================================================
CANADA-2.80%
Nortel Networks Corp.
(Communications Equipment) 384,008 17,373,766
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 400,000 67,800,000
===============================================================
85,173,766
===============================================================
HONG KONG-1.20%
China Mobile Ltd.
(Telecommunications-
Cellular/Wireless)(a) 5,700,000 36,543,146
===============================================================
ISRAEL-0.74%
Check Point Software Technologies
Ltd. (Computers-Software &
Services)(a) 142,300 22,536,763
===============================================================
JAPAN-2.20%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long
Distance) 2,001 18,210,081
---------------------------------------------------------------
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 1,760 43,389,085
---------------------------------------------------------------
Softbank Corp. (Computers-Software
& Services) 90,000 5,402,557
===============================================================
67,001,723
===============================================================
|
MARKET
SHARES VALUE
SPAIN-0.66%
Telefonica S.A. (Telephone)(a) 1,058,409 $ 20,182,976
===============================================================
UNITED KINGDOM-1.20%
Vodafone Group PLC
(Telecommunications-
Cellular/Wireless) 8,754,003 36,433,193
===============================================================
Total Foreign Stocks
(Cost $141,309,176) 289,016,767
===============================================================
MONEY MARKET FUNDS-2.84%
STIC Liquid Assets Portfolio(b) 43,161,491 43,161,491
---------------------------------------------------------------
STIC Prime Portfolio(b) 43,161,491 43,161,491
===============================================================
Total Money Market Funds (Cost
$86,322,982) 86,322,982
===============================================================
TOTAL INVESTMENTS-99.29% (Cost
$2,239,521,050) 3,021,516,168
===============================================================
OTHER ASSETS LESS LIABILITIES-0.71% 21,660,320
===============================================================
NET ASSETS-100.00% $3,043,176,488
_______________________________________________________________
===============================================================
|
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-44
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (Cost
$2,239,521,050) $3,021,516,168
-------------------------------------------------------------
Foreign currencies, at value (Cost
$17,659,876) 17,683,076
-------------------------------------------------------------
Receivables for:
Investments sold 18,787,376
-------------------------------------------------------------
Fund shares sold 6,152,844
-------------------------------------------------------------
Dividends 736,891
-------------------------------------------------------------
Collateral for securities loaned 266,427,893
-------------------------------------------------------------
Other assets 59,290
=============================================================
Total assets $3,331,363,538
=============================================================
LIABILITIES:
Payables for:
Investments purchased 10,705,737
-------------------------------------------------------------
Fund shares reacquired 5,041,200
-------------------------------------------------------------
Collateral upon return of securities loaned 266,427,893
-------------------------------------------------------------
Accrued advisory fees 2,503,768
-------------------------------------------------------------
Accrued administrative services fees 17,277
-------------------------------------------------------------
Accrued distribution fees 2,315,581
-------------------------------------------------------------
Accrued trustees' fees 5,562
-------------------------------------------------------------
Accrued transfer agent fees 789,774
-------------------------------------------------------------
Accrued operating expenses 380,258
=============================================================
Total liabilities 288,187,050
=============================================================
Net assets applicable to shares outstanding $3,043,176,488
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $1,513,595,156
_____________________________________________________________
=============================================================
Class B $1,414,914,649
_____________________________________________________________
=============================================================
Class C $ 114,666,683
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 49,453,461
_____________________________________________________________
=============================================================
Class B 48,513,942
_____________________________________________________________
=============================================================
Class C 3,932,626
_____________________________________________________________
=============================================================
Class A:
-------------------------------------------------------------
Net asset value and redemption price per
share $ 30.61
-------------------------------------------------------------
Offering price per share:
(Net asset value of $30.61 divided by
95.25%) $ 32.14
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 29.17
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 29.16
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$222,447) $ 48,231,809
------------------------------------------------------------
Dividends from affiliated money market funds 7,821,554
------------------------------------------------------------
Interest 68,831
------------------------------------------------------------
Security lending income 1,737,797
============================================================
Total investment income 57,859,991
============================================================
EXPENSES:
Advisory fees 29,880,111
------------------------------------------------------------
Administrative services fees 202,100
------------------------------------------------------------
Custodian fees 688,091
------------------------------------------------------------
Distribution fees -- Class A 8,206,803
------------------------------------------------------------
Distribution fees -- Class B 15,064,977
------------------------------------------------------------
Distribution fees -- Class C 878,420
------------------------------------------------------------
Transfer agent fees 5,525,139
------------------------------------------------------------
Trustees' fees 59,400
------------------------------------------------------------
Other 366,990
============================================================
Total expenses 60,872,031
============================================================
Less: Expenses paid indirectly (133,680)
------------------------------------------------------------
Net expenses 60,738,351
============================================================
Net investment income (loss) (2,878,360)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
------------------------------------------------------------
Net realized gain (loss) from:
Investment securities 420,256,806
------------------------------------------------------------
Foreign currencies (3,463,153)
------------------------------------------------------------
Option contracts written 2,354,362
============================================================
419,148,015
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (13,360,812)
------------------------------------------------------------
Foreign currencies (201,016)
============================================================
(13,561,828)
============================================================
Net gain on investment securities, foreign
currencies and option contracts 405,586,187
============================================================
Net increase in net assets resulting from
operations $402,707,827
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-45
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (2,878,360) $ (21,958,347)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 419,148,015 299,698,355
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (13,561,828) 537,434,434
==============================================================================================
Net increase in net assets resulting from operations 402,707,827 815,174,442
==============================================================================================
Distributions to shareholders from net realized gains:
Class A (122,942,635) (23,149,236)
----------------------------------------------------------------------------------------------
Class B (112,289,611) (21,143,550)
----------------------------------------------------------------------------------------------
Class C (2,428,890) --
----------------------------------------------------------------------------------------------
Advisor Class* (257,983) (150,968)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 376,834,670 (101,952,900)
----------------------------------------------------------------------------------------------
Class B 447,353,903 (72,208,921)
----------------------------------------------------------------------------------------------
Class C 121,591,284 11,141,603
----------------------------------------------------------------------------------------------
Advisor Class* (2,868,709) (5,609,698)
==============================================================================================
Net increase in net assets 1,107,699,856 602,100,772
==============================================================================================
NET ASSETS:
Beginning of year 1,935,476,632 1,333,375,860
==============================================================================================
End of year $3,043,176,488 $1,935,476,632
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $1,873,542,848 $ 863,973,212
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) -- 5,534
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 387,652,541 275,954,959
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 781,981,099 795,542,927
==============================================================================================
$3,043,176,488 $1,935,476,632
______________________________________________________________________________________________
==============================================================================================
* Advisor Class shares were converted to Class A shares effective as of the close of business
on February 11, 2000.
|
See Notes to Financial Statements.
FS-46
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Telecommunications and Technology Fund (the "Fund") is a separate
series of AIM Investment Funds (the "Trust"). The Trust is organized as a
Delaware business trust and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end series management investment
company consisting of nine separate series portfolios, each having an unlimited
number of shares of beneficial interest. The Fund currently offers three
different classes of shares: Class A shares, Class B shares and Class C shares.
The Fund formerly offered Advisor Class shares; however, as of the close of
business on February 11, 2000 the Advisor Class shares were converted to Class A
shares. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Advisor
Class shares were sold without a sales charge. Matters affecting each portfolio
or class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is long-term growth of
capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available or are questionable are valued at fair
value as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$2,872,826, undistributed net realized gains decreased by $69,531,314 and
paid in capital increased by $66,658,488 as a result of book/tax differences
due to utilization of a portion of the proceeds from redemptions as
distributions for federal income tax purposes, foreign currency transactions
and net operating loss reclassifications. Net assets of the Fund were
unaffected by the reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into
FS-47
U.S. dollar amounts on the respective dates of such transactions. The Fund
does not separately account for the portion of the results of operations
resulting from changes in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded 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 written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
H. Expenses -- Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividend expense on short sales, extraordinary items and
increases in expenses due to offset arrangements, if any) for Class A, Class B
and Class C shares to 2.00%, 2.50% and 2.50%, respectively.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended October 31, 2000, AIM was
paid $202,100 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended October 31, 2000, AFS was
paid $3,251,404 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $8,206,803,
$15,064,977 and $878,420, respectively, as compensation under the Plans.
AIM Distributors received commissions of $1,575,107 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended
FS-48
October 31, 2000, AIM Distributors received $99,517 in contingent deferred sales
charges imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $43,852 and reductions in custodian fees of $89,828 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $133,680.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended October 31,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to not less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $261,203,817 were
on loan to brokers. The loans were secured by cash collateral of $266,427,893
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $1,737,797 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$4,037,708,251 and $3,385,749,431, respectively.
The amount of unrealized appreciation (depreciation)of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 881,084,993 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (101,792,957) ========================================================= Net unrealized appreciation of investment securities $ 779,292,036 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $2,242,224,132. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
Sold:
Class A 15,814,510 $ 575,875,480 42,637,825 $ 826,757,794
-------------------------------------------------------------------------------------------------------------------------
Class B 17,939,437 618,630,557 6,195,698 131,627,637
-------------------------------------------------------------------------------------------------------------------------
Class C* 4,043,413 141,415,869 544,069 12,490,317
-------------------------------------------------------------------------------------------------------------------------
Advisor Class** 92,071 3,241,706 664,975 14,200,299
=========================================================================================================================
Issued as reinvestment of dividends:
Class A 3,700,530 113,714,341 1,233,567 21,142,757
-------------------------------------------------------------------------------------------------------------------------
Class B 3,497,829 102,890,796 1,176,293 19,479,129
-------------------------------------------------------------------------------------------------------------------------
Class C* 70,053 2,060,345 -- --
-------------------------------------------------------------------------------------------------------------------------
Advisor Class** 7,925 250,992 8,588 150,375
=========================================================================================================================
Conversion of Advisor Class shares to Class A shares***
Class A 157,592 6,147,658 -- --
-------------------------------------------------------------------------------------------------------------------------
Advisor Class (152,813) (6,147,658) -- --
=========================================================================================================================
Reacquired:
Class A (8,920,012) (318,902,809) (49,011,051) (949,853,451)
-------------------------------------------------------------------------------------------------------------------------
Class B (8,251,217) (274,167,450) (11,052,108) (223,315,687)
-------------------------------------------------------------------------------------------------------------------------
Class C* (666,660) (21,884,930) (58,249) (1,348,714)
-------------------------------------------------------------------------------------------------------------------------
Advisor Class** (6,114) (213,749) (900,945) (19,960,372)
=========================================================================================================================
27,326,544 $ 942,911,148 (8,561,338) $(168,629,916)
_________________________________________________________________________________________________________________________
=========================================================================================================================
|
* Class C shares commenced sales on March 1, 1999. ** Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). *** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
FS-49
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
Beginning of year -- $ --
--------------------------------------------------------------------------------------
Written 6,250 5,281,438
--------------------------------------------------------------------------------------
Closed (5,250) (4,026,952)
--------------------------------------------------------------------------------------
Expired (1,000) (1,254,486)
======================================================================================
End of year -- $ --
______________________________________________________________________________________
======================================================================================
|
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2000(a) 1999 1998(a) 1997(a) 1996(a)
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 26.44 $ 16.28 $ 18.04 $ 16.69 $ 16.42
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.06(b) (0.25) (0.17) (0.17) (0.13)
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 7.23 10.97 (0.39) 2.93 1.22
======================================================================================================================
Total from investment operations 7.29 10.72 (0.56) 2.76 1.09
======================================================================================================================
Less distributions from net realized gains (3.12) (0.56) (1.20) (1.41) (0.82)
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.61 $ 26.44 $ 16.28 $ 18.04 $ 16.69
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(c) 27.52% 67.63% (3.16)% 17.70% 7.00%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,513,595 $1,023,124 $713,904 $910,801 $1,204,428
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets 1.63%(d) 1.77% 1.88% 1.84% 1.79%
======================================================================================================================
Ratio of net investment income (loss) to average net assets 0.16%(d) (1.11)% (0.93)% (1.06)% (0.89)%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 111% 122% 75% 35% 37%
______________________________________________________________________________________________________________________
======================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Net investment income per share reflects dividend income recognized from the
spin-off of Nortel Networks Corp. from BCE, Inc. of $0.49 per share.
(c)Does not include sales charges.
(d)Ratios are based on average daily net assets of $1,641,360,557.
FS-50
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2000(a) 1999 1998(a) 1997(a) 1996(a)
---------- -------- -------- -------- ----------
Net asset value, beginning of period $ 25.43 $ 15.76 $ 17.58 $ 16.37 $ 16.20
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11)(b) (0.35) (0.25) (0.25) (0.23)
--------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.97 10.58 (0.37) 2.87 1.22
==========================================================================================================================
Total from investment operations 6.86 10.23 (0.62) 2.62 0.99
==========================================================================================================================
Less distributions from net realized gains (3.12) (0.56) (1.20) (1.41) (0.82)
==========================================================================================================================
Net asset value, end of period $ 29.17 $ 25.43 $ 15.76 $ 17.58 $ 16.37
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(c) 26.87% 66.84% (3.67)% 17.15% 6.46%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,414,915 $898,400 $614,715 $805,535 $1,007,654
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets 2.13%(d) 2.28% 2.38% 2.34% 2.29%
==========================================================================================================================
Ratio of net investment income (loss) to average net assets (0.34)%(d) (1.62)% (1.43)% (1.56)% (1.39)%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 111% 122% 75% 35% 37%
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Net investment income per share reflects dividend income recognized from the
spin-off of Nortel Networks Corp. from BCE, Inc. of $0.49 per share.
(c)Does not include contingent deferred sales charges.
(d)Ratios are based on average daily net assets of $1,506,497,660.
CLASS C
-----------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED)
OCTOBER 31, TO OCTOBER 31,
2000(a) 1999
----------- --------------
Net asset value, beginning of period $ 25.43 $ 19.23
-------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(b) (0.11)(b) (0.11)
-------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.96 6.31
===========================================================================================
Total from investment operations 6.85 6.20
===========================================================================================
Less distributions from net realized gains (3.12) --
===========================================================================================
Net asset value, end of period $ 29.16 $ 25.43
___________________________________________________________________________________________
===========================================================================================
Total return(c) 26.83% 32.24%
___________________________________________________________________________________________
===========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $114,667 $12,352
___________________________________________________________________________________________
===========================================================================================
Ratio of expenses to average net assets 2.13%(d) 2.28%(e)
===========================================================================================
Ratio of net investment income (loss) to average net assets (0.34)%(d) (1.62)%(e)
___________________________________________________________________________________________
===========================================================================================
Portfolio turnover rate 111% 122%
___________________________________________________________________________________________
===========================================================================================
|
(a)Calculated using average shares outstanding.
(b)Net investment income per share reflects dividend income recognized from the
spin-off of Nortel Networks Corp. from BCE, Inc. of $0.49 per share.
(c)Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(d)Ratios are based on average daily net assets of $87,842,049.
(e)Annualized.
FS-51
SCHEDULE OF INVESTMENTS
April 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC STOCKS & OTHER EQUITY
INTERESTS-72.16%
BANKS (MAJOR REGIONAL)-11.50%
Bank of New York Co., Inc. (The) 190,000 $ 9,538,000
--------------------------------------------------------------
Fifth Third Bancorp 27,000 1,451,520
--------------------------------------------------------------
FleetBoston Financial Corp. 145,800 5,594,346
--------------------------------------------------------------
Mellon Financial Corp. 92,600 3,790,118
--------------------------------------------------------------
PNC Financial Services Group 94,000 6,116,580
--------------------------------------------------------------
Wells Fargo Co. 160,500 7,538,685
==============================================================
34,029,249
==============================================================
BANKS (MONEY CENTER)-0.44%
Bank of America Corp. 23,000 1,288,000
==============================================================
BANKS (REGIONAL)-1.62%
Silicon Valley Bancshares(a) 76,000 1,904,560
--------------------------------------------------------------
Zions Bancorp 54,500 2,904,305
==============================================================
4,808,865
==============================================================
COMPUTERS (SOFTWARE &
SERVICES)-1.77%
Henry (Jack) & Associates, Inc. 186,200 5,248,978
==============================================================
CONSUMER FINANCE-4.79%
Capital One Financial Corp. 92,000 5,783,120
--------------------------------------------------------------
MBNA Corp. 96,000 3,422,400
--------------------------------------------------------------
Providian Financial Corp. 93,200 4,967,560
==============================================================
14,173,080
==============================================================
ELECTRICAL EQUIPMENT-1.94%
General Electric Co. 118,000 5,726,540
==============================================================
FINANCIAL (DIVERSIFIED)-16.73%
American Express Co. 109,500 4,647,180
--------------------------------------------------------------
Citigroup Inc. 227,501 11,181,674
--------------------------------------------------------------
Fannie Mae 53,500 4,293,910
--------------------------------------------------------------
Freddie Mac 70,000 4,606,000
--------------------------------------------------------------
J.P. Morgan Chase & Co. 195,600 9,384,888
--------------------------------------------------------------
PMI Group, Inc. (The) 84,500 5,433,350
--------------------------------------------------------------
SEI Investments Co. 11,6000 4,652,760
--------------------------------------------------------------
State Street Corp. 51,000 5,292,780
==============================================================
49,492,542
==============================================================
INSURANCE (LIFE/HEALTH)-3.53%
AFLAC, Inc. 209,000 6,646,200
--------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 93,000 3,809,280
==============================================================
10,455,480
==============================================================
|
MARKET
SHARES VALUE
INSURANCE (MULTI-LINE)-4.16%
American International Group, Inc. 98,450 $ 8,053,210
--------------------------------------------------------------
Hartford Financial Services Group,
Inc. (The) 68,600 4,260,060
==============================================================
12,313,270
==============================================================
INSURANCE (PROPERTY-CASUALTY)-2.36%
Radian Group Inc. 90,000 6,975,000
==============================================================
INSURANCE BROKERS-2.33%
Marsh & McLennan Cos., Inc. 71,600 6,905,104
==============================================================
INVESTMENT BANKING/BROKERAGE-11.92%
Goldman Sachs Group, Inc. (The) 73,100 6,659,410
--------------------------------------------------------------
Legg Mason, Inc. 100,000 4,787,000
--------------------------------------------------------------
Lehman Brothers Holdings Inc. 99,200 7,216,800
--------------------------------------------------------------
Merrill Lynch & Co., Inc. 114,300 7,052,310
--------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 68,700 4,313,673
--------------------------------------------------------------
Waddell & Reed Financial,
Inc.-Class A 172,000 5,232,240
==============================================================
35,261,433
==============================================================
INVESTMENT MANAGEMENT-4.38%
Affiliated Managers Group, Inc.(a) 88,700 4,986,714
--------------------------------------------------------------
Alliance Capital Management Holding
L.P. 49,000 2,258,900
--------------------------------------------------------------
Investors Financial Services Corp. 38,000 2,718,520
--------------------------------------------------------------
Stilwell Financial, Inc. 101,700 2,997,099
==============================================================
12,961,233
==============================================================
SAVINGS & LOAN COMPANIES-1.13%
Golden West Financial Corp. 57,000 3,345,900
==============================================================
SERVICES (COMPUTER SYSTEMS)-1.40%
SunGard Data Systems Inc.(a) 75,000 4,145,250
==============================================================
SERVICES (DATA PROCESSING)-2.16%
Concord EFS, Inc.(a) 123,000 5,725,650
--------------------------------------------------------------
First Data Corp. 9,800 660,912
==============================================================
6,386,562
==============================================================
Total Domestic Stocks & Other
Equity Interests (Cost
$182,777,798) 213,516,486
==============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-19.50%
AUSTRALIA-0.96%
AMP Ltd. (Insurance-Life/Health) 277,300 2,828,737
==============================================================
BERMUDA-2.99%
ACE Ltd.
(Insurance-Property-Casualty) 71,000 2,534,700
--------------------------------------------------------------
Everest Re Group, Ltd.
(Insurance-Property-Casualty) 98,700 6,301,995
==============================================================
8,836,695
==============================================================
|
FS-52
MARKET
SHARES VALUE
CANADA-1.58%
AGF Management Ltd.-Class B
(Investment Management) 101,000 $ 1,611,160
--------------------------------------------------------------
Royal Bank of Canada (Banks-Major
Regional) 109,300 3,056,571
==============================================================
4,667,731
==============================================================
FRANCE-3.38%
Assurances Generales de France
(Insurance-Multi-Line) 38,200 2,272,779
--------------------------------------------------------------
BNP Paribas S.A. (Banks-Major
Regional) 53,700 4,774,600
--------------------------------------------------------------
Societe Generale-Class A
(Banks-Major Regional) 45,900 2,961,025
==============================================================
10,008,404
==============================================================
GERMANY-0.94%
MLP A.G.-Pfd. (Services-Commercial
& Consumer) 21,400 2,373,661
--------------------------------------------------------------
Tecis Holding A.G. (Investment
Management) 14,100 416,638
==============================================================
2,790,299
==============================================================
HONG KONG-1.26%
Dah Sing Financial Group
(Banks-Regional) 686,000 3,738,300
==============================================================
IRELAND-1.46%
Bank of Ireland (Banks-Major
Regional) 447,100 4,320,435
==============================================================
ITALY-1.54%
Alleanza Assicurazioni (Insurance
Brokers) 125,200 1,585,343
--------------------------------------------------------------
Riunione Adriatica di Sicurta S.p.A
(Insurance Brokers) 225,800 2,975,400
==============================================================
4,560,743
==============================================================
JAPAN-0.26%
Nomura Securities Co., Ltd.
(Investment Banking/Brokerage) 37,000 781,595
==============================================================
MEXICO-0.61%
Grupo Financiero Banamex Accival,
S.A. de C.V.-Class O
(Financial-Diversified) 966,000 1,799,514
==============================================================
NETHERLANDS-0.21%
Aegon N.V.-ADR
(Insurance-Life/Health) 18,526 628,587
==============================================================
|
MARKET
SHARES VALUE
SINGAPORE-0.56%
DBS Group Holdings Ltd.
(Banks-Money Center) 188,040 $ 1,641,865
==============================================================
SPAIN-0.76%
Banco Popular Espanol S.A.
(Banks-Major Regional) 63,200 2,256,680
==============================================================
SWITZERLAND-0.27%
Julius Baer Holding Ltd. A.G.-Class
B (Banks-Major Regional) 185 801,821
==============================================================
UNITED KINGDOM-2.72%
Amdocs Ltd.
(Telecommunications-Cellular/
Wireless)(a) 59,000 3,475,100
--------------------------------------------------------------
Royal Bank of Scotland Group PLC
(Banks-Major Regional) 197,400 4,572,383
==============================================================
8,047,483
==============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$56,279,093) 57,708,889
==============================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.17%
U.S. TREASURY BILLS-0.17%
4.37%, 06/21/01 (Cost $497,124)(b) $ 500,000 497,555
==============================================================
SHARES
MONEY MARKET FUNDS-7.70%
STIC Liquid Assets Portfolio(c) 11,390,256 11,390,256
--------------------------------------------------------------
STIC Prime Portfolio(c) 11,390,256 11,390,256
==============================================================
Total Money Market Funds (Cost
$22,780,512) 22,780,512
==============================================================
TOTAL INVESTMENTS-99.53% (Cost
$262,334,527) 294,503,442
==============================================================
OTHER ASSETS LESS LIABILITIES-0.47% 1,391,000
==============================================================
NET ASSETS-100.00% $295,894,442
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt Pfd. - Preferred |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-53
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$262,334,527)* $294,503,442
------------------------------------------------------------
Foreign currencies, at value (cost $107,899) 108,302
------------------------------------------------------------
Receivables for:
Fund shares sold 2,324,466
------------------------------------------------------------
Dividends 322,059
------------------------------------------------------------
Collateral for securities loaned 17,134,600
------------------------------------------------------------
Other assets 33,724
============================================================
Total assets 314,426,593
============================================================
LIABILITIES:
Payables for:
Investments purchased 407,700
------------------------------------------------------------
Fund shares reacquired 646,795
------------------------------------------------------------
Collateral upon return of securities loaned 17,134,600
------------------------------------------------------------
Accrued administrative services fees 4,041
------------------------------------------------------------
Accrued distribution fees 205,218
------------------------------------------------------------
Accrued trustees' fees 1,150
------------------------------------------------------------
Accrued transfer agent fees 82,150
------------------------------------------------------------
Accrued operating expenses 50,497
============================================================
Total liabilities 18,532,151
============================================================
Net assets applicable to shares outstanding $295,894,442
____________________________________________________________
============================================================
NET ASSETS:
Class A $136,466,732
____________________________________________________________
============================================================
Class B $124,842,211
____________________________________________________________
============================================================
Class C $ 34,585,499
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 5,764,485
____________________________________________________________
============================================================
Class B 5,444,313
____________________________________________________________
============================================================
Class C 1,508,545
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 23.67
------------------------------------------------------------
Offering price per share:
(Net asset value of $23.67 divided by
95.25%) $ 24.85
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 22.93
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 22.93
____________________________________________________________
============================================================
|
* At April 30, 2001, securities with an aggregate market value of $16,574,917 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended April 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$29,752) $ 1,361,476
--------------------------------------------------------------
Dividends from affiliated money market funds 583,760
--------------------------------------------------------------
Interest 9,649
--------------------------------------------------------------
Security lending income 2,752
==============================================================
Total investment income 1,957,637
==============================================================
EXPENSES:
Advisory fees 1,224,411
--------------------------------------------------------------
Administrative services fees 24,726
--------------------------------------------------------------
Custodian fees 33,823
--------------------------------------------------------------
Distribution fees -- Class A 293,136
--------------------------------------------------------------
Distribution fees -- Class B 532,413
--------------------------------------------------------------
Distribution fees -- Class C 140,236
--------------------------------------------------------------
Transfer agent fees 297,753
--------------------------------------------------------------
Trustees' fees 8,093
--------------------------------------------------------------
Other 25,842
==============================================================
Total expenses 2,580,433
==============================================================
Less: Expenses paid indirectly (2,817)
--------------------------------------------------------------
Net expenses 2,577,616
==============================================================
Net investment income (loss) (619,979)
==============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 6,826,506
--------------------------------------------------------------
Foreign currencies (196,455)
--------------------------------------------------------------
Futures contracts 70,775
--------------------------------------------------------------
Option contracts written 175,465
==============================================================
6,876,291
==============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (17,469,600)
--------------------------------------------------------------
Foreign currencies 7,085
==============================================================
(17,462,515)
==============================================================
Net gain (loss) from investment securities,
foreign currencies, futures contracts and
option contracts (10,586,224)
==============================================================
Net increase (decrease) in net assets
resulting from operations $(11,206,203)
______________________________________________________________
==============================================================
|
See Notes to Financial Statements.
FS-54
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2001 and the year ended October 31, 2000
(Unaudited)
APRIL 30, OCTOBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income (loss) $ (619,979) $ (737,694)
-----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 6,876,291 3,527,810
-----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (17,462,515) 31,438,082
===============================================================================================
Net increase (decrease) in net assets resulting from
operations (11,206,203) 34,228,198
===============================================================================================
Distributions to shareholders from net investment income:
Class A -- (343,444)
-----------------------------------------------------------------------------------------------
Class B -- (299,755)
-----------------------------------------------------------------------------------------------
Class C -- (16,237)
-----------------------------------------------------------------------------------------------
Advisor Class* -- (29,048)
-----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (1,093,601) (5,350,283)
-----------------------------------------------------------------------------------------------
Class B (1,042,910) (8,341,879)
-----------------------------------------------------------------------------------------------
Class C (251,528) (287,630)
-----------------------------------------------------------------------------------------------
Advisor Class* -- (226,554)
-----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 47,589,368 54,920,598
-----------------------------------------------------------------------------------------------
Class B 38,032,693 34,809,580
-----------------------------------------------------------------------------------------------
Class C 15,186,422 18,134,821
-----------------------------------------------------------------------------------------------
Advisor Class* -- (431,451)
===============================================================================================
Net increase in net assets 87,214,241 126,766,916
===============================================================================================
NET ASSETS:
Beginning of period 208,680,201 81,913,285
===============================================================================================
End of period $295,894,442 $208,680,201
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $257,702,382 $156,893,899
-----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (602,277) 17,702
-----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures contracts and
option contracts 6,629,581 2,141,329
-----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 32,164,756 49,627,271
===============================================================================================
$295,894,442 $208,680,201
_______________________________________________________________________________________________
===============================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
See Notes to Financial Statements.
FS-55
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Financial Services Fund (the "Fund") is a separate series of AIM
Investment Funds (the "Trust"). The Trust is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end series management investment company consisting
of nine separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price as of the close of the customary trading session on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign
FS-56
exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably.
G. Covered Call Options -- The Fund may write call options, on a covered basis; that is, the Fund will own the underlying security. When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded 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 written. The current market value of a written option is the mean between the last bid and asked prices on that day. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received.
H. Futures Contracts -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. Risks include the possibility of an illiquid market and that a change in value of the contracts may not correlate with changes in the value of the securities being hedged.
I. Expenses -- Distribution expenses directly attributable to a class of shares are charged to that class' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividends on short sales, extraordinary items and increases in
expenses due to expense offset arrangements, if any) for Class A, Class B and
Class C shares to 2.00%, 2.50% and 2.50%, respectively.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended April 30, 2001, AIM
was paid $24,726 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay AIM Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended April 30, 2001,
AFS was paid $151,548 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended April 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $293,136,
$532,413 and $140,236, respectively, as compensation under the Plans.
AIM Distributors received commissions of $123,082 from sales of the Class A
shares of the Fund during the six months ended April 30, 2001. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
2001, AIM Distributors received $11,102 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
FS-57
NOTE 3-INDIRECT EXPENSES
For the six months ended April 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $2,817 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $2,817.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the six months ended April 30, 2001, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities. It is
the Fund's policy to obtain additional collateral from or return excess
collateral to the borrower by the end of the next business day. Therefore, the
value of the collateral may be temporarily less than the value of the securities
on loan.
At April 30, 2001, securities with an aggregate value of $16,574,917 were on
loan to brokers. The loans were secured by cash collateral of $17,134,600
received by the Fund and invested in affiliated money market funds as follows:
$8,567,300 in STIC Liquid Assets Portfolio and $8,567,300 in STIC Prime
Portfolio. For the six months ended April 30, 2001, the Fund received fees of
$2,752 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 2001 was
$152,589,149 and $66,581,549, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of April 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $36,911,919 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (4,804,570) ========================================================== Net unrealized appreciation of investment securities $32,107,349 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $262,396,093. |
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended April 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
---------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of period -- $ --
----------------------------------------------------------
Written 823 246,130
----------------------------------------------------------
Closed (185) (61,880)
----------------------------------------------------------
Exercised (238) (50,454)
----------------------------------------------------------
Expired (400) (133,796)
----------------------------------------------------------
End of period -- $ --
__________________________________________________________
==========================================================
|
FS-58
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 2001 and the year ended October 31, 2000 were as follows:
APRIL 30, 2001 OCTOBER 31, 2000
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
Sold:
Class A 3,364,454 $ 80,763,571 3,708,161 $ 84,155,054
-----------------------------------------------------------------------------------------------------------------------
Class B 2,173,311 50,390,428 2,343,916 50,065,435
-----------------------------------------------------------------------------------------------------------------------
Class C 832,728 19,428,149 910,841 19,615,087
-----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 70,059 1,508,705
=======================================================================================================================
Issued as reinvestment of dividends:
Class A 43,536 1,037,038 273,338 5,297,291
-----------------------------------------------------------------------------------------------------------------------
Class B 42,176 974,681 424,196 8,021,011
-----------------------------------------------------------------------------------------------------------------------
Class C 10,376 239,794 11,109 210,474
-----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 12,981 253,124
=======================================================================================================================
Conversion of Advisor Class shares to Class A shares**:
Class A -- -- 105,329 2,017,059
-----------------------------------------------------------------------------------------------------------------------
Class B -- -- (104,619) (2,017,059)
=======================================================================================================================
Reacquired:
Class A (1,482,364) (34,211,241) (1,582,015) (36,548,806)
-----------------------------------------------------------------------------------------------------------------------
Class B (597,034) (13,332,416) (1,131,468) (23,276,866)
-----------------------------------------------------------------------------------------------------------------------
Class C (202,288) (4,481,521) (80,911) (1,690,740)
-----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (8,213) (176,221)
=======================================================================================================================
4,184,895 $100,808,483 4,952,704 $107,433,548
_______________________________________________________________________________________________________________________
=======================================================================================================================
|
* Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). ** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
FS-59
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
--------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ------- ------- ------- ------- -------
Net asset value, beginning of period $ 24.85 $ 23.23 $ 17.05 $ 17.22 $ 14.20 $11.92
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.02) (0.07) (0.02) 0.07 0.04 0.05
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both
realized and unrealized) (0.90) 5.87 6.25 0.37 3.97 2.36
=================================================================================================================================
Total from investment operations (0.92) 5.80 6.23 0.44 4.01 2.41
=================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.25) (0.02) (0.01) -- (0.12)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.26) (3.93) (0.03) (0.60) (0.99) (0.01)
=================================================================================================================================
Total distributions (0.26) (4.18) (0.05) (0.61) (0.99) (0.13)
=================================================================================================================================
Net asset value, end of period $ 23.67 $ 24.85 $ 23.23 $ 17.05 $ 17.22 $14.20
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) (3.73)% 30.06% 36.62% 2.53% 29.91% 20.21%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $136,467 $95,393 $30,987 $28,433 $29,639 $7,302
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 2.00% 1.99% 1.97% 2.29% 2.32%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.78%(c) 2.00% 2.12% 1.99% 2.36% 3.39%
=================================================================================================================================
Ratio of net investment income (loss) to
average net assets (0.23)%(c) (0.33)% (0.08)% 0.37% 0.23% 0.41%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 28% 41% 107% 111% 91% 103%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of
$118,226,096.
CLASS B
--------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ------- ------- ------- ------- -------
Net asset value, beginning of period $ 24.14 $ 22.67 $ 16.71 $ 16.97 $ 14.06 $11.83
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.18) (0.12) (0.02) (0.04) (0.01)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both
realized and unrealized) (0.88) 5.72 6.11 0.37 3.94 2.34
=================================================================================================================================
Total from investment operations (0.95) 5.54 5.99 0.35 3.90 2.33
=================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.14) -- (0.01) -- (0.09)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.26) (3.93) (0.03) (0.60) (0.99) (0.01)
=================================================================================================================================
Total distributions (0.26) (4.07) (0.03) (0.61) (0.99) (0.10)
=================================================================================================================================
Net asset value, end of period $ 22.93 $ 24.14 $ 22.67 $ 16.71 $ 16.97 $14.06
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) (3.96)% 29.40% 35.91% 2.08% 29.13% 19.81%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $124,842 $92,343 $49,619 $48,785 $47,585 $9,886
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.28%(c) 2.50% 2.49% 2.47% 2.79% 2.82%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.28%(c) 2.50% 2.62% 2.49% 2.86% 3.89%
=================================================================================================================================
Ratio of net investment income (loss) to
average net assets (0.73)%(c) (0.83)% (0.58)% (0.13)% (0.27)% (0.09)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 28% 41% 107% 111% 91% 103%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of
$107,365,009.
FS-60
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-------------------------------------------------
MARCH 1, 1999
SIX MONTHS (DATE SALES
ENDED YEAR ENDED COMMENCED)
APRIL 30, OCTOBER 31, TO OCTOBER 31,
2001 2000(a) 1999(a)
---------- ----------- --------------
Net asset value, beginning of period $ 24.14 $ 22.67 $ 19.58
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.18) (0.08)
-----------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.88) 5.72 3.17
=================================================================================================================
Total from investment operations (0.95) 5.54 3.09
=================================================================================================================
Less distributions:
Dividends from net investment income -- (0.14) --
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.26) (3.93) --
=================================================================================================================
Total distributions (0.26) (4.07) --
=================================================================================================================
Net asset value, end of period $ 22.93 $ 24.14 $ 22.67
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) (3.96)% 29.40% 15.78%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 34,585 $20,944 $ 605
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.28%(c) 2.50% 2.49%(d)
-----------------------------------------------------------------------------------------------------------------
Without fee waivers 2.28%(c) 2.50% 2.62%(d)
=================================================================================================================
Ratio of net investment income (loss) to average net assets (0.73)%(c) (0.83)% (0.58)%(d)
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 28% 41% 107%
_________________________________________________________________________________________________________________
=================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $28,279,623.
(d) Annualized.
FS-61
SCHEDULE OF INVESTMENTS
April 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-90.98%
BIOTECHNOLOGY-7.60%
Aclara Biosciences Inc.(a) 20,000 $ 104,000
--------------------------------------------------------------
Amgen Inc.(a) 515,000 31,487,100
--------------------------------------------------------------
Cell Therapeutics, Inc.(a) 10,000 249,500
--------------------------------------------------------------
Diacrin, Inc.(a) 280,000 386,400
--------------------------------------------------------------
Exelixis, Inc.(a) 5,000 68,500
--------------------------------------------------------------
Guilford Pharmaceuticals, Inc.(a) 835,000 16,708,350
--------------------------------------------------------------
IDEC Pharmaceuticals Corp.(a) 40,000 1,968,000
--------------------------------------------------------------
Incyte Genomics, Inc.(a) 90,000 1,451,250
--------------------------------------------------------------
Invitrogen Corp.(a) 5,000 352,550
--------------------------------------------------------------
Medarex, Inc.(a) 15,000 358,650
--------------------------------------------------------------
Protein Design Labs, Inc.(a) 10,000 642,500
--------------------------------------------------------------
Titan Pharmaceuticals, Inc.(a) 5,000 176,250
--------------------------------------------------------------
XOMA Ltd.(a) 10,000 111,900
==============================================================
54,064,950
==============================================================
DISTRIBUTORS (FOOD & HEALTH)-4.19%
AmeriSource Health Corp.-Class A(a) 550,000 29,700,000
--------------------------------------------------------------
Owens & Minor, Inc. 5,000 97,300
==============================================================
29,797,300
==============================================================
ELECTRONICS (INSTRUMENTATION)-5.32%
Varian Inc.(a) 1,170,000 37,814,400
==============================================================
EQUIPMENT (SEMICONDUCTOR)-0.01%
Varian Semiconductor Equipment
Associates, Inc.(a) 1,000 45,550
==============================================================
HEALTH CARE (DIVERSIFIED)-0.16%
Bristol-Myers Squibb Co. 20,000 1,120,000
==============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-10.00%
Aradigm Corp.(a) 1,560,000 11,778,000
--------------------------------------------------------------
ARIAD Pharmaceuticals, Inc.(a) 10,000 47,800
--------------------------------------------------------------
Forest Laboratories, Inc.(a) 270,000 16,510,500
--------------------------------------------------------------
ICN Pharmaceuticals, Inc. 1,510,000 38,686,200
--------------------------------------------------------------
King Pharmaceuticals, Inc.(a) 5,000 210,650
--------------------------------------------------------------
MedImmune, Inc.(a) 20,000 783,000
--------------------------------------------------------------
OraPharma, Inc.(a) 380,000 2,394,000
--------------------------------------------------------------
Sepracor Inc.(a) 25,000 659,000
==============================================================
71,069,150
==============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-9.37%
Merck & Co., Inc. 310,000 23,550,700
--------------------------------------------------------------
Pfizer Inc. 850,000 36,805,000
--------------------------------------------------------------
|
MARKET
SHARES VALUE
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-(CONTINUED)
Pharmacia Corp. 120,000 $ 6,271,200
==============================================================
66,626,900
==============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-39.06%
Community Health Systems, Inc.(a) 1,200,000 34,248,000
--------------------------------------------------------------
HCA-Healthcare Co. (The) 910,000 35,217,000
--------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 2,025,000 36,288,000
--------------------------------------------------------------
Province Healthcare Co.(a) 1,118,200 28,648,284
--------------------------------------------------------------
Tenet Healthcare Corp.(a) 930,000 41,515,200
--------------------------------------------------------------
Triad Hospitals, Inc.(a) 2,215,680 68,132,160
--------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 375,000 33,660,000
==============================================================
277,708,644
==============================================================
HEALTH CARE (LONG TERM CARE)-2.33%
Select Medical Corp.(a) 1,250,000 16,537,500
==============================================================
HEALTH CARE (MANAGED CARE)-0.03%
CIGNA Corp. 500 53,350
--------------------------------------------------------------
PacifiCare Health Systems, Inc.(a) 3,000 106,170
--------------------------------------------------------------
UnitedHealth Group Inc. 1,000 65,480
==============================================================
225,000
==============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-10.07%
Caliper Technologies Corp.(a) 15,000 345,000
--------------------------------------------------------------
CONMED Corp.(a) 4,000 86,360
--------------------------------------------------------------
INAMED Corp.(a) 863,600 18,109,692
--------------------------------------------------------------
ORATEC Interventions, Inc.(a) 5,000 30,950
--------------------------------------------------------------
PhotoMedex, Inc.(a) 10,000 64,100
--------------------------------------------------------------
PolyMedica Corp.(a) 900,000 24,444,000
--------------------------------------------------------------
PSS World Medical, Inc.(a) 1,680,000 7,644,000
--------------------------------------------------------------
STAAR Surgical Co.(a) 670,000 2,780,500
--------------------------------------------------------------
Syncor International Corp.(a) 512,300 18,063,698
--------------------------------------------------------------
Varian Medical Systems, Inc.(a) 1,000 68,900
==============================================================
71,637,200
==============================================================
HEALTH CARE (SPECIALIZED SERVICES)-2.81%
ALZA Corp.(a) 70,000 3,200,400
--------------------------------------------------------------
Charles River Laboratories
International, Inc.(a) 105,000 2,604,000
--------------------------------------------------------------
DaVita, Inc.(a) 5,000 88,000
--------------------------------------------------------------
HEALTHSOUTH Corp.(a) 1,000,000 14,050,000
--------------------------------------------------------------
Lincare Holdings Inc.(a) 1,000 49,870
==============================================================
19,992,270
==============================================================
|
FS-62
MARKET
SHARES VALUE
WASTE MANAGEMENT-0.03%
Stericycle, Inc.(a) 5,000 $ 209,500
==============================================================
Total Domestic Common Stocks
(Cost $555,410,172) 646,848,364
==============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-2.00%
FRANCE-0.03%
Sanofi-Synthelabo S.A. (Health
Care-Drugs- Generic & Other) 3,000 179,955
==============================================================
GERMANY-1.70%
Altana A.G. (Health
Care-Drugs-Generic & Other) 100,000 12,067,960
==============================================================
ISRAEL-0.15%
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other) 20,000 1,089,000
==============================================================
JAPAN-0.09%
Banyu Pharmaceutical Co., Ltd.
(Health Care- Drugs-Generic &
Other) 3,000 55,238
--------------------------------------------------------------
Chugai Pharmaceutical Co., Ltd.
(Health Care- Drugs-Generic &
Other) 4,000 59,407
--------------------------------------------------------------
Daiichi Pharmaceutical Co., Ltd.
(Health Care- Drugs-Generic &
Other) 3,000 65,315
--------------------------------------------------------------
Eisai Co., Ltd. (Health
Care-Drugs-Generic & Other) 5,000 128,283
--------------------------------------------------------------
Kissei Pharmaceutical Co., Ltd.
(Health Care- Drugs-Generic &
Other) 2,000 40,225
--------------------------------------------------------------
Kyowa Hakko Kogyo Co., Ltd. (Health
Care- Drugs-Generic & Other) 5,000 36,016
--------------------------------------------------------------
|
MARKET
SHARES VALUE
JAPAN-(CONTINUED)
Rohto Pharmaceutical Co., Ltd.
(Health Care- Drugs-Generic &
Other) 8,000 $ 75,497
--------------------------------------------------------------
Shionogi & Co., Ltd. (Health
Care-Drugs- Generic & Other) 3,000 52,810
--------------------------------------------------------------
Taisho Pharmaceutical Co., Ltd.
(Health Care- Drugs-Generic &
Other) 2,000 39,335
--------------------------------------------------------------
Takeda Chemical Industries, Ltd.
(Health Care- Drugs-Generic &
Other) 1,000 48,238
--------------------------------------------------------------
Yamanouchi Pharmaceutical Co., Ltd.
(Health Care-Drugs-Generic &
Other) 2,000 55,360
==============================================================
655,724
==============================================================
SWITZERLAND-0.03%
Serono S.A.-ADR (Biotechnology)(a) 10,000 206,000
==============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$14,150,669) 14,198,639
==============================================================
MONEY MARKET FUNDS-5.40%
STIC Liquid Assets Portfolio(b) 19,211,616 19,211,616
--------------------------------------------------------------
STIC Prime Portfolio(b) 19,211,616 19,211,616
==============================================================
Total Money Market Funds (Cost
$38,423,232) 38,423,232
==============================================================
TOTAL INVESTMENTS-98.38% (Cost
$607,984,073) 699,470,235
==============================================================
OTHER ASSETS LESS LIABILITIES-1.62% 11,539,250
==============================================================
NET ASSETS-100.00% $711,009,485
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-63
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$607,984,073)* $699,470,235
------------------------------------------------------------
Receivables for:
Investments sold 14,108,312
------------------------------------------------------------
Fund shares sold 2,813,535
------------------------------------------------------------
Dividends 168,931
------------------------------------------------------------
Collateral for securities loaned 60,879,359
------------------------------------------------------------
Other assets 32,994
============================================================
Total assets 777,473,366
============================================================
LIABILITIES:
Payables for:
Investments purchased 2,492,050
------------------------------------------------------------
Fund shares reacquired 1,982,327
------------------------------------------------------------
Collateral upon return of securities loaned 60,879,359
------------------------------------------------------------
Accrued advisory fees 535,365
------------------------------------------------------------
Accrued administrative services fees 10,177
------------------------------------------------------------
Accrued distribution fees 416,919
------------------------------------------------------------
Accrued trustees' fees 919
------------------------------------------------------------
Accrued transfer agent fees 81,018
------------------------------------------------------------
Accrued operating expenses 65,747
============================================================
Total liabilities 66,463,881
============================================================
Net assets applicable to shares outstanding $711,009,485
____________________________________________________________
============================================================
NET ASSETS:
Class A $509,644,689
____________________________________________________________
============================================================
Class B $178,884,285
____________________________________________________________
============================================================
Class C $ 22,480,511
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 17,418,397
____________________________________________________________
============================================================
Class B 6,512,984
____________________________________________________________
============================================================
Class C 818,280
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 29.26
------------------------------------------------------------
Offering price per share:
(Net asset value of $29.26 divided by
95.25%) $ 30.72
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 27.47
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 27.47
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the six months ended April 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$2,989) $ 425,799
------------------------------------------------------------
Dividends from affiliated money market funds 729,583
------------------------------------------------------------
Security lending income 7,816
============================================================
Total investment income 1,163,198
============================================================
EXPENSES:
Advisory fees 3,260,619
------------------------------------------------------------
Administrative services fees 62,059
------------------------------------------------------------
Custodian fees 43,446
------------------------------------------------------------
Distribution fees -- Class A 1,229,308
------------------------------------------------------------
Distribution fees -- Class B 822,107
------------------------------------------------------------
Distribution fees -- Class C 89,007
------------------------------------------------------------
Transfer agent fees 576,535
------------------------------------------------------------
Trustees' fees 12,677
------------------------------------------------------------
Other 94,470
============================================================
Total expenses 6,190,228
============================================================
Less: Expenses paid indirectly (8,610)
============================================================
Net expenses 6,181,618
============================================================
Net investment income (loss) (5,018,420)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES
Net realized gain from:
Investment securities 146,611,974
------------------------------------------------------------
Foreign currencies 8,820
============================================================
146,620,794
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (91,946,246)
------------------------------------------------------------
Foreign currencies 959
============================================================
(91,945,287)
============================================================
Net gain from investment securities and foreign
currencies 54,675,507
============================================================
Net increase in net assets resulting from
operations $49,657,087
____________________________________________________________
============================================================
|
* At April 30, 2001, securities with an aggregate market value of $59,685,646 were on loan to brokers.
See Notes to Financial Statements.
FS-64
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2001 and the year ended October 31, 2000
(Unaudited)
APRIL 30, OCTOBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income (loss) $ (5,018,420) $ (4,947,036)
-----------------------------------------------------------------------------------------
Net realized gain from investment securities and foreign
currencies 146,620,794 78,246,407
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (91,945,287) 92,894,528
=========================================================================================
Net increase in net assets resulting from operations 49,657,087 166,193,899
=========================================================================================
Distributions to shareholders from net realized gains:
Class A (50,672,022) (33,324,503)
-----------------------------------------------------------------------------------------
Class B (17,239,564) (9,919,856)
-----------------------------------------------------------------------------------------
Class C (1,699,076) (162,378)
-----------------------------------------------------------------------------------------
Advisor Class* -- (84,346)
-----------------------------------------------------------------------------------------
Share transactions-net:
Class A 62,615,841 9,141,881
-----------------------------------------------------------------------------------------
Class B 39,922,533 14,704,535
-----------------------------------------------------------------------------------------
Class C 10,779,581 9,136,876
-----------------------------------------------------------------------------------------
Advisor Class* -- (710,294)
=========================================================================================
Net increase in net assets 93,364,380 154,975,814
=========================================================================================
NET ASSETS:
Beginning of period 617,645,105 462,669,291
=========================================================================================
End of period $711,009,485 $617,645,105
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $477,980,330 $364,662,375
-----------------------------------------------------------------------------------------
Undistributed net investment income (loss) (5,018,420) 0
-----------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities
and foreign currencies 146,564,684 69,554,552
-----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 91,482,891 183,428,178
=========================================================================================
$711,009,485 $617,645,105
_________________________________________________________________________________________
=========================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Health Care Fund (the "Fund") is a separate series of AIM Investment Funds (the "Trust"). The Trust is organized as a Delaware business trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of nine separate series portfolios, each having an unlimited number of shares of beneficial interest. The Fund currently offers three different classes of shares: Class A shares, Class B shares and Class C shares. The Fund formerly offered Advisor Class shares; however, as of the close of business on February 11, 2000 the Advisor Class shares were converted to Class A shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with a contingent deferred sales charge. Advisor Class shares were sold without a sales charge. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. The Fund's investment objective is long-term growth of capital. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues
FS-65
and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. Security Valuations -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price as of the close of the customary trading session on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably.
G. Expenses -- Distribution expenses directly attributable to a class of shares are charged to that class' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator. The Fund pays AIM investment management and administration fees at an annual rate of 0.975% on the first $500 million of the Fund's average daily net assets, plus 0.95% on the next $500 million of the Fund's average daily net assets, plus 0.925% on the next $500 million of the Fund's average daily net assets, plus 0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has contractually agreed to limit total annual operating expenses (excluding interest, taxes, dividends on short sales, extraordinary items and increases in expenses due to expense offset arrangements, if any) for Class A, Class B and Class C shares to 2.00%, 2.50% and 2.50%, respectively.
FS-66
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended April 30, 2001, AIM
was paid $62,059 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay AIM Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended April 30, 2001,
AFS was paid $373,100 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund ,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended April 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $1,229,308,
$822,107 and $89,007, respectively, as compensation under the Plans.
AIM Distributors received commissions of $136,838 from sales of the Class A
shares of the Fund during the six months ended April 30, 2001. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
2001, AIM Distributors received $11,444 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the six months ended April 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $7,716 and reductions in custodian fees of $894 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $8,610.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A.. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the six months ended April 30, 2001, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities. It is
the Fund's policy to obtain additional collateral from or return excess
collateral to the borrower by the end of the next business day. Therefore, the
value of the collateral may be temporarily less than the value of the securities
on loan.
At April 30, 2001, securities with an aggregate value of $59,685,646 were on
loan to brokers. The loans were secured by cash collateral of $60,879,359
received by the Fund and invested in affiliated money market funds as follows:
$30,439,680 in STIC Liquid Assets Portfolio and $30,439,679 in STIC Prime
Portfolio. For the six months ended April 30, 2001, the Fund received fees of
$7,816 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 2001 was
$664,562,725 and $654,823,579, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of April 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $116,838,427 --------------------------------------------------------- Aggregate unrealized appreciation (depreciation) of investment securities (25,355,130) ========================================================= Net unrealized appreciation of investment securities $ 91,483,297 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $607,986,938. |
FS-67
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 2001 and the year ended October 31, 2000 were as follows:
APRIL 30, 2001 OCTOBER 31, 2000
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 2,539,997 $ 75,232,214 2,265,037 $ 61,242,852
----------------------------------------------------------------------------------------------------------------------
Class B 2,074,115 57,399,038 1,557,713 38,869,448
----------------------------------------------------------------------------------------------------------------------
Class C 466,818 12,993,824 775,066 19,232,447
----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 12,143 310,037
======================================================================================================================
Issued as reinvestment of dividends:
Class A 1,674,740 47,026,687 1,402,570 30,940,689
----------------------------------------------------------------------------------------------------------------------
Class B 607,433 16,041,792 437,951 9,188,203
----------------------------------------------------------------------------------------------------------------------
Class C 62,106 1,640,220 6,991 146,741
----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 3,706 84,344
======================================================================================================================
Conversion of Advisor Class shares to Class A shares:**
Class A -- -- 44,266 1,041,571
----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (42,881) (1,041,571)
======================================================================================================================
Reacquired:
Class A (2,082,891) (59,643,060) (3,330,391) (84,083,231)
----------------------------------------------------------------------------------------------------------------------
Class B (1,246,675) (33,518,297) (1,400,658) (33,353,116)
----------------------------------------------------------------------------------------------------------------------
Class C (143,098) (3,854,463) (405,278) (10,242,312)
----------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (2,513) (63,104)
======================================================================================================================
3,952,545 $113,317,955 1,323,722 $ 32,272,998
______________________________________________________________________________________________________________________
======================================================================================================================
|
* Advisor Class share activity for the period November 1, 1999 through February 11, 2000. ** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------------------------------------------------------------
SIX MONTHS YEAR ENDED OCTOBER 31,
ENDED --------------------------------------------------------
APRIL 30, 2001(a) 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
----------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 30.12 $ 24.00 $ 20.15 $ 27.98 $ 23.60 $ 21.84
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.20) (0.22) (0.19) (0.21) (0.25) (0.17)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) 2.58 8.62 4.04 (0.91) 6.48 4.79
=================================================================================================================================
Total from investment operations 2.38 8.40 3.85 (1.12) 6.23 4.62
=================================================================================================================================
Less distributions:
Distributions from net realized gains (3.24) (2.28) -- (6.70) (1.85) (2.86)
---------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- (0.01) -- --
=================================================================================================================================
Total distributions (3.24) (2.28) -- (6.71) (1.85) (2.86)
=================================================================================================================================
Net asset value, end of period $ 29.26 $ 30.12 $ 24.00 $ 20.15 $ 27.98 $ 23.60
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 8.37% 38.49% 19.11% (4.71)% 28.36% 23.14%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $509,645 $460,445 $357,747 $357,534 $472,083 $467,861
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.70%(c) 1.73% 1.82% 1.84% 1.80% 1.84%
=================================================================================================================================
Ratio of net investment income (loss) to average
net assets (1.35)%(c) (0.85)% (0.81)% (0.98)% (1.03)% (0.75)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 99% 242% 123% 187% 149% 157%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of
$495,798,274.
FS-68
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
-----------------------------------------------------------------------------
SIX MONTHS YEAR ENDED OCTOBER 31,
ENDED --------------------------------------------------------
APRIL 30, 2001(a) 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
----------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 28.53 $ 22.96 $ 19.37 $ 27.27 $ 23.15 $ 21.56
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.25) (0.34) (0.30) (0.30) (0.37) (0.27)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) 2.43 8.19 3.89 (0.89) 6.34 4.72
=================================================================================================================================
Total from investment operations 2.18 7.85 3.59 (1.19) 5.97 4.45
=================================================================================================================================
Less distributions:
Distributions from net realized gains (3.24) (2.28) -- (6.70) (1.85) (2.86)
---------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- (0.01) -- --
=================================================================================================================================
Total distributions (3.24) (2.28) -- (6.71) (1.85) (2.86)
=================================================================================================================================
Net asset value, end of period $ 27.47 $ 28.53 $ 22.96 $ 19.37 $ 27.27 $ 23.15
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 8.11% 37.78% 18.53% (5.20)% 27.75% 22.59%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $178,884 $144,861 $102,916 $100,311 $147,440 $107,622
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 2.20%(c) 2.23% 2.33% 2.34% 2.30% 2.34%
=================================================================================================================================
Ratio of net investment income (loss) to average
net assets (1.85)%(c) (1.35)% (1.32)% (1.48)% (1.53)% (1.25)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 99% 242% 123% 187% 149% 157%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of
$165,784,102.
CLASS C
----------------------------------------------------------
SIX MONTHS YEAR ENDED MARCH 1, 1999
ENDED OCTOBER 31, (DATE SALES COMMENCED)
APRIL 30, 2001(a) 2000(a) TO OCTOBER 31, 1999(a)
----------------- ----------- ----------------------
Net asset value, beginning of period $ 28.53 $ 22.96 22.50
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.25) (0.34) (0.21)
------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.43 8.19 0.67
========================================================================================================================
Total from investment operations 2.18 7.85 0.46
========================================================================================================================
Less distributions from net realized gains (3.24) (2.28) --
========================================================================================================================
Total distributions (3.24) (2.28) --
========================================================================================================================
Net asset value, end of period $ 27.47 $ 28.53 $22.96
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 8.11% 37.77% 2.04%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $22,481 $12,339 $1,278
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets 2.20%(c) 2.23% 2.33%(d)
========================================================================================================================
Ratio of net investment income (loss) to average net assets (1.85)%(c) (1.35)% (1.32)%(d)
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 99% 242% 123%
________________________________________________________________________________________________________________________
========================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $17,948,840.
(d) Annualized.
FS-69
SCHEDULE OF INVESTMENTS
April 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC STOCKS & OTHER EQUITY
INTERESTS-60.90%
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.02%
General Motors Corp.-Class H(a) 18,500 $ 393,125
--------------------------------------------------------------
Univision Communications Inc.-Class A(a) 8,300 362,793
==============================================================
755,918
==============================================================
COMMUNICATIONS EQUIPMENT-0.61%
Comverse Technology, Inc.(a) 2,200 150,700
--------------------------------------------------------------
JDS Uniphase Corp.(a) 3,700 79,106
==============================================================
229,806
==============================================================
COMPUTERS (HARDWARE)-0.53%
Dell Computer Corp.(a) 7,500 197,175
==============================================================
COMPUTERS (NETWORKING)-3.47%
Cisco Systems, Inc.(a) 35,968 610,737
--------------------------------------------------------------
Juniper Networks, Inc.(a) 9,000 531,270
--------------------------------------------------------------
VeriSign, Inc.(a) 3,100 158,968
==============================================================
1,300,975
==============================================================
COMPUTERS (PERIPHERALS)-1.51%
Brocade Communications Systems,
Inc.(a) 6,700 254,533
--------------------------------------------------------------
EMC Corp.(a) 7,900 312,840
==============================================================
567,373
==============================================================
COMPUTERS (SOFTWARE & SERVICES)-2.41%
Henry (Jack) & Associates, Inc. 10,000 281,900
--------------------------------------------------------------
Oracle Corp.(a) 13,400 216,544
--------------------------------------------------------------
VERITAS Software Corp.(a) 6,800 405,348
==============================================================
903,792
==============================================================
ELECTRIC COMPANIES-12.16%
Aquila, Inc.(a) 6,200 187,922
--------------------------------------------------------------
Edison International(a) 14,000 137,900
--------------------------------------------------------------
FPL Group, Inc. 16,000 958,400
--------------------------------------------------------------
Mirant Corp.(a) 17,264 704,371
--------------------------------------------------------------
Mirant Trust I-Series A, $3.125
Conv. Pfd. 3,700 303,400
--------------------------------------------------------------
Montana Power Co. (The)(a) 21,200 264,152
--------------------------------------------------------------
NRG Energy, Inc.(a) 15,000 536,250
--------------------------------------------------------------
PG&E Corp.(a) 12,000 107,640
--------------------------------------------------------------
Pinnacle West Capital Corp. 24,000 1,204,560
--------------------------------------------------------------
Southern Co. (The) 6,700 156,713
==============================================================
4,561,308
==============================================================
ELECTRICAL EQUIPMENT-3.01%
Active Power, Inc.(a) 14,000 312,900
--------------------------------------------------------------
General Electric Co. 13,300 645,449
--------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRICAL EQUIPMENT-(CONTINUED)
Sanmina Corp.(a) 5,800 $ 169,070
==============================================================
1,127,419
==============================================================
ELECTRONICS (INSTRUMENTATION)-0.26%
Proton Energy Systems, Inc.(a) 13,700 98,229
==============================================================
ELECTRONICS (SEMICONDUCTORS)-0.63%
Analog Devices, Inc.(a) 5,000 236,550
==============================================================
ENGINEERING & CONSTRUCTION-0.87%
Quanta Services, Inc.(a) 12,700 326,263
==============================================================
NATURAL GAS-13.88%
Dynegy Inc.-Class A 13,100 757,835
--------------------------------------------------------------
El Paso Corp. 13,000 894,400
--------------------------------------------------------------
Enron Corp. 45,800 2,872,576
--------------------------------------------------------------
KeySpan Corp. 8,500 337,450
--------------------------------------------------------------
NewPower Holdings, Inc.(a) 10,700 92,020
--------------------------------------------------------------
Williams Cos., Inc. (The) 6,000 253,020
==============================================================
5,207,301
==============================================================
OIL & GAS (DRILLING & EQUIPMENT)-0.55%
BJ Services Co.(a) 2,500 205,625
==============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-3.49%
Anadarko Petroleum Corp. 4,800 310,176
--------------------------------------------------------------
Apache Corp. 7,000 447,720
--------------------------------------------------------------
Devon Energy Corp. 3,300 194,733
--------------------------------------------------------------
Kerr-McGee Corp. 5,000 358,250
==============================================================
1,310,879
==============================================================
OIL (INTERNATIONAL INTEGRATED)-1.16%
Chevron Corp. 2,400 231,744
--------------------------------------------------------------
Exxon Mobil Corp. 2,300 203,780
==============================================================
435,524
==============================================================
POWER PRODUCERS (INDEPENDENT)-5.78%
AES Corp. (The)(a) 29,976 1,428,956
--------------------------------------------------------------
Calpine Corp.(a) 13,000 740,870
==============================================================
2,169,826
==============================================================
SERVICES (COMMERCIAL & CONSUMER)-0.92%
Convergys Corp.(a) 9,500 346,750
==============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-1.13%
Openwave Systems Inc.(a) 5,300 183,433
--------------------------------------------------------------
Western Wireless Corp.-Class A(a) 5,400 240,464
==============================================================
423,897
==============================================================
|
FS-70
MARKET
SHARES VALUE
TELEPHONE-6.51%
Broadwing Inc.(a) 11,700 $ 290,160
--------------------------------------------------------------
Qwest Communications International
Inc.(a) 6,600 269,940
--------------------------------------------------------------
SBC Communications Inc. 32,000 1,320,000
--------------------------------------------------------------
Verizon Communications Inc. 10,200 561,714
==============================================================
2,441,814
==============================================================
Total Domestic Stocks & Other
Equity Interests (Cost
$19,622,696) 22,846,424
==============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-27.03%
BERMUDA-0.57%
Tyco International Ltd.
(Manufacturing-Diversified) 4,000 213,480
==============================================================
BRAZIL-0.93%
Companhia Paranaense de
Energia-Copel-ADR (Electric
Companies) 45,000 348,750
==============================================================
CANADA-0.42%
Nortel Networks Corp.
(Communications Equipment) 6,600 100,980
--------------------------------------------------------------
Stuart Energy Systems Corp. (Power
Producers-Independent)()(a) 13,300 57,587
==============================================================
158,567
==============================================================
FINLAND-0.89%
Nokia Oyj-ADR (Communications
Equipment) 9,800 335,062
==============================================================
FRANCE-4.07%
Suez Lyonnaise des Eaux S.A.
(Manufacturing-Diversified) 3,650 539,589
--------------------------------------------------------------
TotalFinaElf S.A. (Oil-International
Integrated) 2,400 357,780
--------------------------------------------------------------
Vivendi Universal S.A. (Water
Utilities) 9,100 630,245
==============================================================
1,527,614
==============================================================
GERMANY-1.12%
E.On A.G.
(Manufacturing-Diversified)()(a) 8,320 418,233
==============================================================
ISRAEL-1.31%
Check Point Software Technologies
Ltd. (Computers-Software &
Services)()(a) 7,800 489,294
==============================================================
ITALY-3.93%
ACEA S.p.A. (Water Utilities) 72,800 687,980
--------------------------------------------------------------
Telecom Italia S.p.A. (Telephone) 126,300 787,868
==============================================================
1,475,848
==============================================================
|
MARKET
SHARES VALUE
JAPAN-2.97%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long Distance) 30 $ 190,603
--------------------------------------------------------------
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 45 925,094
==============================================================
1,115,697
==============================================================
SPAIN-5.09%
Endesa S.A. (Electric Companies) 11,600 195,469
--------------------------------------------------------------
Endesa S.A.-ADR (Electric Companies) 39,600 671,220
--------------------------------------------------------------
Telefonica, S.A. (Telephone)(a) 28,006 474,159
--------------------------------------------------------------
Union Electrica Fenosa, S.A.
(Electric Companies) 30,000 567,283
==============================================================
1,908,131
==============================================================
UNITED KINGDOM-5.73%
Amdocs Ltd.
(Telecommunications-Cellular/
Wireless)(a) 8,300 488,870
--------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 95,060 727,613
--------------------------------------------------------------
Vodafone Group PLC
(Telecommunications-
Cellular/Wireless) 307,314 933,208
==============================================================
2,149,691
==============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$8,453,440) 10,140,367
==============================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-1.33%
U.S. Treasury Bills-1.33%
--------------------------------------------------------------
4.37%, 06/21/01 (Cost $497,025)(b) $ 500,000 497,025
==============================================================
SHARES
MONEY MARKET FUNDS-8.20%
STIC Liquid Assets Portfolio(c) 1,538,923 1,538,923
--------------------------------------------------------------
STIC Prime Portfolio(c) 1,538,923 1,538,923
==============================================================
Total Money Market Funds (Cost
$3,077,846) 3,077,846
==============================================================
TOTAL INVESTMENTS-97.46% (Cost
$31,651,007) 36,561,662
==============================================================
OTHER ASSETS LESS LIABILITIES-2.54% 954,304
==============================================================
NET ASSETS-100.00% $37,515,966
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt Conv. - Convertible Pfd. - Preferred |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-71
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$31,651,007)* $36,561,662
------------------------------------------------------------
Receivables for:
Investments sold 1,220,967
------------------------------------------------------------
Fund shares sold 9,117
------------------------------------------------------------
Dividends 56,215
------------------------------------------------------------
Collateral for securities loaned 914,479
------------------------------------------------------------
Other assets 17,695
============================================================
Total assets 38,780,135
============================================================
LIABILITIES:
Payables for:
Investments purchased 194,625
------------------------------------------------------------
Fund shares reacquired 53,832
------------------------------------------------------------
Collateral upon return of securities loaned 914,479
------------------------------------------------------------
Accrued administrative services fees 4,041
------------------------------------------------------------
Accrued distribution fees 24,304
------------------------------------------------------------
Accrued trustees' fees 927
------------------------------------------------------------
Accrued transfer agent fees 20,789
------------------------------------------------------------
Accrued operating expenses 51,172
============================================================
Total liabilities 1,264,169
============================================================
Net assets applicable to shares outstanding $37,515,966
____________________________________________________________
============================================================
NET ASSETS:
Class A $17,880,037
____________________________________________________________
============================================================
Class B $19,250,445
____________________________________________________________
============================================================
Class C $ 385,484
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 1,550,628
____________________________________________________________
============================================================
Class B 1,740,231
____________________________________________________________
============================================================
Class C 34,927
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 11.53
------------------------------------------------------------
Offering price per share:
(Net asset value of $11.53 divided by
95.25%) $ 12.10
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 11.06
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 11.04
____________________________________________________________
============================================================
|
* At April 30, 2001, securities with an aggregate market value of $885,265 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended April 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$2,544) $ 154,591
------------------------------------------------------------
Dividends from affiliated money market funds 92,528
------------------------------------------------------------
Interest 4,001
------------------------------------------------------------
Security lending income 24,384
============================================================
Total investment income 275,504
============================================================
EXPENSES:
Advisory fees 203,691
------------------------------------------------------------
Administrative services fees 24,726
------------------------------------------------------------
Custodian fees 7,691
------------------------------------------------------------
Distribution fees -- Class A 48,156
------------------------------------------------------------
Distribution fees -- Class B 109,924
------------------------------------------------------------
Distribution fees -- Class C 1,984
------------------------------------------------------------
Transfer agent fees 84,095
------------------------------------------------------------
Trustees' fees 5,820
------------------------------------------------------------
Other 40,979
============================================================
Total expenses 527,066
============================================================
Less: Fees waived (53,621)
------------------------------------------------------------
Expenses paid indirectly (512)
============================================================
Net expenses 472,933
============================================================
Net investment income (loss) (197,429)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 521,264
------------------------------------------------------------
Foreign currencies (4,598)
------------------------------------------------------------
Futures contracts 43,257
------------------------------------------------------------
Option contracts written 53,736
============================================================
613,659
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (13,244,745)
------------------------------------------------------------
Foreign currencies (1,162)
============================================================
(13,245,907)
============================================================
Net gain (loss) from investment securities,
foreign currencies, futures contracts and
option contracts (12,632,248)
============================================================
Net increase (decrease) in net assets
resulting from operations $(12,829,677)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-72
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended April 30, 2001 and the year ended October 31, 2000
(Unaudited)
APRIL 30, OCTOBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income (loss) $ (197,429) $ (580,057)
--------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 613,659 10,080,580
--------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (13,245,907) 1,680,128
============================================================================================
Net increase (decrease) in net assets resulting from
operations (12,829,677) 11,180,651
============================================================================================
Distributions to shareholders from net realized gains:
Class A (3,585,321) (2,273,919)
--------------------------------------------------------------------------------------------
Class B (4,318,690) (2,931,748)
--------------------------------------------------------------------------------------------
Class C (69,527) (1,316)
--------------------------------------------------------------------------------------------
Advisor Class* -- (2,002)
--------------------------------------------------------------------------------------------
Share transactions-net:
Class A 2,522,813 1,980,892
--------------------------------------------------------------------------------------------
Class B 2,094,520 30,946
--------------------------------------------------------------------------------------------
Class C 166,196 450,664
--------------------------------------------------------------------------------------------
Advisor Class* -- (22,973)
============================================================================================
Net increase (decrease) in net assets (16,019,686) 8,411,195
============================================================================================
NET ASSETS:
Beginning of period 53,535,652 45,124,457
============================================================================================
End of period $ 37,515,966 $ 53,535,652
____________________________________________________________________________________________
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 32,197,531 $ 27,414,002
--------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (197,429) --
--------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures contracts and
option contracts 612,439 7,972,318
--------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 4,903,425 18,149,332
============================================================================================
$ 37,515,966 $ 53,535,652
____________________________________________________________________________________________
============================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
See Notes to Financial Statements.
FS-73
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Infrastructure Fund (the "Fund") is a separate series of AIM
Investment Funds (the "Trust"). The Trust is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end series management investment company consisting
of nine separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price as of the close of the customary trading session on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign
FS-74
exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably.
G. Put Options -- The Fund may purchase put options. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option's underlying instrument may be a security or a futures contract. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund's resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the securities hedged.
H. Covered Call Options -- The Fund may write call options, on a covered basis; that is, the Fund will own the underlying security. When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded 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 written. The current market value of a written option is the mean between the last bid and asked prices on that day. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received.
I. Futures Contracts -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. Risks include the possibility of an illiquid market and that a change in value of the contracts may not correlate with changes in the value of the securities being hedged.
J. Expenses -- Distribution expenses directly attributable to a class of shares are charged to that class' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividends on short sales, extraordinary items and increases in
expenses due to expense offset arrangements, if any) for Class A, Class B and
Class C shares to 2.00%, 2.50% and 2.50%, respectively. For the six months ended
April 30, 2001, AIM waived fees of $53,621.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended April 30, 2001, AIM
was paid $24,726 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended April 30, 2001,
AFS was paid $50,614 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended April 30,
2001,
FS-75
the Class A, Class B and Class C shares paid AIM Distributors $48,156, $109,924
and $1,984, respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,701 from sales of the Class A
shares of the Fund during the six months ended April 30, 2001. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
2001, AIM Distributors received $1,016 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the six months ended April 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $487 and reductions in custodian fees of $25 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $512.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended April
30, 2001, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities. It is
the Fund's policy to obtain additional collateral from or return excess
collateral to the borrower by the end of the next business day. Therefore, the
value of the collateral may be temporarily less than the value of the securities
on loan.
At April 30, 2001, securities with an aggregate value of $885,265 were on loan
to brokers. The loans were secured by cash collateral of $914,479 received by
the Fund and invested in affiliated money market funds as follows: $457,239 in
STIC Liquid Assets Portfolio and $457,240 in STIC Prime Portfolio. For the six
months ended April 30, 2001, the Fund received fees of $24,384 for securities
lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 2001 was
$10,836,490 and $15,638,716, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of April 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 8,896,498 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (3,985,843) ========================================================= Net unrealized appreciation of investment securities $ 4,910,655 _________________________________________________________ ========================================================= Investments have the same cost for tax and financial statement purposes. |
FS-76
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended April 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
---------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- --------
Beginning of period -- $ --
-----------------------------------------------------------------------------------
Written 133 55,476
-----------------------------------------------------------------------------------
Closed (80) (19,759)
-----------------------------------------------------------------------------------
Expired (53) (35,717)
===================================================================================
End of period -- $ --
___________________________________________________________________________________
===================================================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 2001 and the year ended October 31, 2000 were as follows:
APRIL 30, 2001 OCTOBER 31, 2000
----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- ------------
Sold:
Class A 584,773 $ 8,029,223 661,981 $ 12,809,797
-----------------------------------------------------------------------------------------------------------------
Class B 60,978 805,498 222,164 4,334,670
-----------------------------------------------------------------------------------------------------------------
Class C 12,758 174,928 32,764 654,226
-----------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 1 15
=================================================================================================================
Issued as reinvestment of dividends:
Class A 253,715 3,427,689 128,271 2,153,369
-----------------------------------------------------------------------------------------------------------------
Class B 308,008 3,997,955 164,254 2,682,268
-----------------------------------------------------------------------------------------------------------------
Class C 5,299 68,675 81 1,316
-----------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 51 875
=================================================================================================================
Conversion of Advisor Class to Class A shares:**
Class A -- -- 1,119 23,863
-----------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (1,094) (23,863)
=================================================================================================================
Reacquired:
Class A (630,970) (8,934,099) (670,570) (13,006,137)
-----------------------------------------------------------------------------------------------------------------
Class B (219,213) (2,708,933) (372,887) (6,985,992)
-----------------------------------------------------------------------------------------------------------------
Class C (6,258) (77,407) (10,693) (204,878)
=================================================================================================================
369,090 $ 4,783,529 155,442 $ 2,439,529
_________________________________________________________________________________________________________________
=================================================================================================================
|
* Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). ** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
FS-77
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
2001 2000(a) 1999 1998(a) 1997(a) 1996(a)
---------- ------- ------- ------- ------- -------
Net asset value, beginning of period $ 18.42 $ 16.33 $ 14.18 $ 15.01 $ 14.42 $ 12.11
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.15) -- 0.07 (0.01) (0.03)
-------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (4.09) 4.16 3.07 (0.79) 1.32 2.34
===============================================================================================================================
Total from investment operations (4.13) 4.01 3.07 (0.72) 1.31 2.31
===============================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.07) -- -- --
-------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.76) (1.92) (0.85) (0.11) (0.72) --
===============================================================================================================================
Total distributions (2.76) (1.92) (0.92) (0.11) (0.72) --
===============================================================================================================================
Net asset value, end of period $ 11.53 $ 18.42 $ 16.33 $ 14.18 $ 15.01 $ 14.42
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Total return(b) (24.62)% 25.71% 22.72% (4.82)% 9.38% 19.08%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $17,880 $24,745 $19,958 $23,531 $38,281 $38,397
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.00%(c) 2.00% 2.00% 1.99% 2.00% 2.14%
-------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.26%(c) 2.21% 2.22% 2.23% 2.08% 2.25%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets (0.68)%(c) (0.75)% 0.09% 0.52% (0.09)% (0.19)%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Portfolio turnover rate 27% 66% 49% 96% 41% 41%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
|
(a) Calculated using average shares.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of $19,422,266.
CLASS B
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ------- ------- ------- ------- -------
Net asset value, beginning of period $ 17.84 $ 15.94 $ 13.87 $ 14.75 $ 14.24 $ 12.03
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.24) (0.06) -- (0.09) (0.09)
-------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (3.95) 4.06 2.98 (0.77) 1.32 2.30
===============================================================================================================================
Total from investment operations (4.02) 3.82 2.92 (0.77) 1.23 2.21
===============================================================================================================================
Less distributions from net realized gains (2.76) (1.92) (0.85) (0.11) (0.72) --
===============================================================================================================================
Net asset value, end of period $ 11.06 $ 17.84 $ 15.94 $ 13.87 $ 14.75 $ 14.24
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Total return(b) (24.83)% 25.09% 22.03% (5.31)% 8.83% 18.37%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $19,250 $28,378 $25,134 $32,349 $57,199 $53,678
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50% 2.50% 2.49% 2.50% 2.64%
-------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.76%(c) 2.71% 2.72% 2.73% 2.58% 2.75%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets (1.18)%(c) (1.25)% (0.41)% 0.02% (0.59)% (0.69)%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Portfolio turnover rate 27% 66% 49% 96% 41% 41%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
|
(a) Calculated using average shares.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $22,166,948.
FS-78
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
------------------------------------------
MARCH 1, 1999
SIX MONTHS (DATE SALES
ENDED YEAR ENDED COMMENCED) TO
APRIL 30, OCTOBER 31, OCTOBER 31,
2001 2000(a) 1999(a)
---------- ----------- -------------
Net asset value, beginning of period $ 17.82 $15.94 $13.99
--------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.24) (0.03)
--------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (3.95) 4.04 1.98
========================================================================================================
Total from investment operations (4.02) 3.80 1.95
========================================================================================================
Less distributions from net realized gains (2.76) (1.92) --
========================================================================================================
Net asset value, end of period $ 11.04 $17.82 $15.94
________________________________________________________________________________________________________
========================================================================================================
Total return(b) (24.86)% 24.94% 13.94%
________________________________________________________________________________________________________
========================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 385 $ 412 $ 16
________________________________________________________________________________________________________
========================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50% 2.50%(d)
--------------------------------------------------------------------------------------------------------
Without fee waivers 2.76%(c) 2.71% 2.72%(d)
========================================================================================================
Ratio of net investment income (loss) to average net assets (1.18)%(c) (1.25)% (0.41)%(d)
________________________________________________________________________________________________________
========================================================================================================
Portfolio turnover rate 27% 66% 49%
________________________________________________________________________________________________________
========================================================================================================
|
(a) Calculated using average shares.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $400,082.
(d) Annualized.
FS-79
SCHEDULE OF INVESTMENTS
April 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-55.92%
ELECTRIC COMPANIES-8.49%
Allegheny Energy, Inc. 13,700 $ 700,892
-------------------------------------------------------------
Mirant Corp.(a) 6,200 252,960
-------------------------------------------------------------
Orion Power Holdings, Inc.(a) 5,100 164,220
-------------------------------------------------------------
PPL Corp. 5,300 291,500
-------------------------------------------------------------
Reliant Energy, Inc. 13,000 644,150
-------------------------------------------------------------
UtiliCorp United Inc. 17,200 607,160
=============================================================
2,660,882
=============================================================
ELECTRICAL EQUIPMENT-6.34%
Capstone Turbine Corp.(a) 34,500 1,010,850
-------------------------------------------------------------
FuelCell Energy, Inc.(a) 14,200 978,380
=============================================================
1,989,230
=============================================================
ENGINEERING & CONSTRUCTION-0.81%
Quanta Services, Inc.(a) 9,900 254,331
=============================================================
METALS MINING-3.16%
Alliance Resource Partners, L.P. 25,200 580,608
-------------------------------------------------------------
Arch Coal, Inc. 13,200 408,540
=============================================================
989,148
=============================================================
NATURAL GAS-8.02%
Dynegy Inc.-Class A 15,100 873,535
-------------------------------------------------------------
El Paso Corp. 8,000 550,400
-------------------------------------------------------------
Enron Corp. 8,400 526,848
-------------------------------------------------------------
Equitable Resources, Inc. 2,100 168,000
-------------------------------------------------------------
NewPower Holdings, Inc.(a) 46,200 397,320
=============================================================
2,516,103
=============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-11.37%
BJ Services Co.(a) 12,100 995,225
-------------------------------------------------------------
Nabors Industries, Inc.(a) 10,000 596,200
-------------------------------------------------------------
Oceaneering International, Inc.(a) 6,200 147,560
-------------------------------------------------------------
Pride International, Inc.(a) 24,600 655,098
-------------------------------------------------------------
Transocean Sedco Forex Inc. 10,100 548,228
-------------------------------------------------------------
Weatherford International, Inc.(a) 10,700 623,061
=============================================================
3,565,372
=============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-11.31%
Anadarko Petroleum Corp. 8,300 536,346
-------------------------------------------------------------
Apache Corp. 10,900 697,164
-------------------------------------------------------------
BP Prudhoe Bay Royalty Trust 100,000 1,503,000
-------------------------------------------------------------
|
MARKET
SHARES VALUE
OIL & GAS (EXPLORATION &
PRODUCTION)-(CONTINUED)
Cross Timbers Oil Co. 9,500 $ 257,925
-------------------------------------------------------------
EOG Resources, Inc. 11,900 552,041
=============================================================
3,546,476
=============================================================
OIL (INTERNATIONAL INTEGRATED)-4.36%
Chevron Corp. 6,000 579,360
-------------------------------------------------------------
Exxon Mobil Corp. 8,900 788,540
=============================================================
1,367,900
=============================================================
POWER PRODUCERS (INDEPENDENT)-2.06%
Calpine Corp.(a) 11,352 646,950
=============================================================
Total Domestic Common Stocks
(Cost $14,206,648) 17,536,392
=============================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-33.64%
CANADA-26.09%
Alberta Energy Co. Ltd. (Oil &
Gas-Exploration & Production) 9,200 452,557
-------------------------------------------------------------
Alcan Aluminum Ltd. (Aluminum) 13,300 591,890
-------------------------------------------------------------
Anderson Exploration Ltd.
(Oil-Domestic Integrated)(a) 30,000 683,660
-------------------------------------------------------------
ARC Energy Trust (Oil &
Gas-Exploration & Production) 72,768 612,619
-------------------------------------------------------------
Compton Petroleum Corp. (Oil &
Gas-Exploration & Production)(a) 245,200 941,941
-------------------------------------------------------------
Fuel Cell Technologies Corp.
(Electrical Equipment)(a) 66,400 48,421
-------------------------------------------------------------
Gulf Canada Resources Ltd.
(Oil-International Integrated)(a) 96,000 550,054
-------------------------------------------------------------
Petro-Canada (Oil-Domestic
Integrated) 11,000 304,392
-------------------------------------------------------------
Precision Drilling Corp. (Oil &
Gas-Drilling & Equipment)(a) 16,100 678,446
-------------------------------------------------------------
Richland Petroleum Corp. (Oil &
Gas-Exploration & Production)(a) 91,900 305,167
-------------------------------------------------------------
Stuart Energy Systems Corp. (Power
Producers- Independent)(a) 100,000 432,985
-------------------------------------------------------------
Talisman Energy Inc. (Oil &
Gas-Exploration & Production)(a) 35,000 1,426,572
-------------------------------------------------------------
Ventus Energy Ltd. (Oil &
Gas-Exploration & Production)(a) 31,200 222,444
-------------------------------------------------------------
Zargon Oil & Gas Ltd. (Oil &
Gas-Exploration & Production)(a) 213,600 931,810
=============================================================
8,182,958
=============================================================
|
FS-80
MARKET
SHARES VALUE
DENMARK-1.70%
Vestas Wind Systems A.S.
(Manufacturing- Specialized) 11,400 $ 532,391
=============================================================
FRANCE-2.83%
Bouygues Offshore S.A.-ADR (Oil &
Gas-Drilling & Equipment) 11,700 290,160
-------------------------------------------------------------
L'Air Liquide S.A.
(Chemicals-Specialty)(a) 3,960 596,661
=============================================================
886,821
=============================================================
IRELAND-0.99%
Jefferson Smurfit Group PLC-ADR
(Containers & Packaging-Paper) 16,500 309,375
=============================================================
UNITED KINGDOM-2.03%
Innogy Holdings PLC (Power Producers-
Independent)(a) 216,400 638,557
=============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$9,725,577) 10,550,102
=============================================================
|
PRINCIPAL MARKET
AMOUNT VALUE
MONEY MARKET FUNDS-5.11%
STIC Liquid Assets Portfolio(b) $801,632 $ 801,632
--------------------------------------------------------------
STIC Prime Portfolio(b) 801,632 801,632
==============================================================
Total Money Market Funds (Cost
$1,603,264) 1,603,264
==============================================================
TOTAL INVESTMENTS-94.67% (Cost
$25,535,489) 29,689,758
==============================================================
OTHER ASSETS LESS LIABILITIES-5.33% 1,671,936
==============================================================
NET ASSETS-100.00% $31,361,694
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-81
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$25,535,489)* $29,689,758
---------------------------------------------------------
Foreign currencies, at value (cost $24,438) 24,527
---------------------------------------------------------
Receivables for:
Investments sold 2,562,867
---------------------------------------------------------
Fund shares sold 961,346
---------------------------------------------------------
Dividends 35,831
---------------------------------------------------------
Collateral for securities loaned 685,761
---------------------------------------------------------
Other assets 17,918
=========================================================
Total assets 33,978,008
=========================================================
LIABILITIES:
Payables for:
Investments purchased 1,631,849
---------------------------------------------------------
Fund shares reacquired 234,053
---------------------------------------------------------
Collateral upon return of securities
loaned 685,761
---------------------------------------------------------
Accrued advisory fees 1,383
---------------------------------------------------------
Accrued administrative services fees 4,041
---------------------------------------------------------
Accrued distribution fees 19,086
---------------------------------------------------------
Accrued trustees' fees 895
---------------------------------------------------------
Accrued transfer agent fees 10,826
---------------------------------------------------------
Accrued operating expenses 28,420
=========================================================
Total liabilities 2,616,314
=========================================================
Net assets applicable to shares outstanding $31,361,694
_________________________________________________________
=========================================================
NET ASSETS:
Class A $14,654,369
_________________________________________________________
=========================================================
Class B $15,735,699
_________________________________________________________
=========================================================
Class C $ 971,626
_________________________________________________________
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 1,055,937
_________________________________________________________
=========================================================
Class B 1,169,773
_________________________________________________________
=========================================================
Class C 72,180
_________________________________________________________
=========================================================
Class A:
Net asset value per share $ 13.88
---------------------------------------------------------
Offering price per share:
(Net asset value of $13.88 divided by
95.25%) $ 14.57
_________________________________________________________
=========================================================
Class B:
Net asset value and offering price per
share $ 13.45
_________________________________________________________
=========================================================
Class C:
Net asset value and offering price per
share $ 13.46
_________________________________________________________
=========================================================
|
* At April 30, 2001, securities with an aggregate market value of $672,315 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended April 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$9,675) $ 267,513
------------------------------------------------------------
Dividends from affiliated money market funds 31,764
------------------------------------------------------------
Interest 310
------------------------------------------------------------
Security lending income 3,300
============================================================
Total investment income 302,887
============================================================
EXPENSES:
Advisory fees 127,044
------------------------------------------------------------
Administrative services fees 24,863
------------------------------------------------------------
Custodian fees 8,857
------------------------------------------------------------
Distribution fees -- Class A 31,022
------------------------------------------------------------
Distribution fees -- Class B 67,034
------------------------------------------------------------
Distribution fees -- Class C 2,878
------------------------------------------------------------
Transfer agent fees 66,066
------------------------------------------------------------
Professional fees 29,060
------------------------------------------------------------
Trustees' fees 5,696
------------------------------------------------------------
Other 30,081
============================================================
Total expenses 392,601
============================================================
Less: Fees waived (94,638)
------------------------------------------------------------
Expenses paid indirectly (348)
============================================================
Net expenses 297,615
============================================================
Net investment income 5,272
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) from:
Investment securities 793,440
------------------------------------------------------------
Foreign currencies (14,607)
============================================================
778,833
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 2,603,279
------------------------------------------------------------
Foreign currencies (6,860)
============================================================
2,596,419
============================================================
Net gain from investment securities and foreign
currencies 3,375,252
============================================================
Net increase in net assets resulting from
operations $3,380,524
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-82
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 2001 and the year ended October 31, 2000
(Unaudited)
APRIL 30, OCTOBER 31,
2001 2000
----------- -----------
OPERATIONS:
Net investment income (loss) $ 5,272 $ (28,282)
----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies 778,833 (439,831)
----------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 2,596,419 603,048
========================================================================================
Net increase in net assets resulting from operations 3,380,524 134,935
========================================================================================
Share transactions-net:
Class A 470,757 (3,338,400)
----------------------------------------------------------------------------------------
Class B 274,741 (6,401,000)
----------------------------------------------------------------------------------------
Class C 435,577 428,516
----------------------------------------------------------------------------------------
Advisor Class* -- (22,444)
========================================================================================
Net increase (decrease) in net assets 4,561,599 (9,198,393)
========================================================================================
NET ASSETS:
Beginning of period 26,800,095 35,998,488
========================================================================================
End of period $31,361,694 $26,800,095
________________________________________________________________________________________
========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $50,032,166 $48,851,091
----------------------------------------------------------------------------------------
Undistributed net investment income 5,272 0
----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (22,822,232) (23,601,065)
----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 4,146,488 1,550,069
========================================================================================
$31,361,694 $26,800,095
________________________________________________________________________________________
========================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of close of business on February 11, 2000.
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Resources Fund (the "Fund") is a separate series of AIM Investment
Funds (the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of nine
separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The Fund formerly
offered Advisor Class shares; however, as of the close of business on February
11, 2000 the Advisor Class shares were converted to Class A shares. Class A
shares are sold with a front-end sales charge. Class B shares and Class C shares
are sold with a contingent deferred sales charge. Advisor Class shares were sold
without a sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital. The Fund
invests substantially all of its investable assets in Global Resources Portfolio
(the "Portfolio"). The Portfolio is organized as a Delaware business trust which
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 the 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
April 30, 2001, all of the shares of beneficial interest of the Portfolio were
owned by either the Fund or INVESCO (NY) Asset Management, Inc., which has a
nominal ($100) investment in the Portfolio.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions
FS-83
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund and the Portfolio in the preparation of its financial statements.
A. Security Valuations -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price as of the close of the customary trading session on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
The Fund has a capital loss carryforward of $23,578,846 as of October 31, 2000 which may be carried forward to offset future taxable gains, if any, which expires, if not previously utilized, in the year 2007.
E. Foreign Currency Translations -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and 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.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Portfolio may enter into a foreign currency contract to attempt to minimize the risk to the Portfolio from adverse changes in the relationship between currencies. The Portfolio may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Portfolio could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably.
G. Expenses -- Distribution expenses directly attributable to a class of shares are charged to that class' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator. The Fund pays AIM investment management and administration fees at an annual rate of 0.975% on the first $500 million of the Fund's average daily net assets, plus 0.95% on the next $500 million of the Fund's average daily net assets, plus 0.925% on the next $500 million of the Fund's average daily net assets, plus 0.90% on the Fund's average daily net assets exceeding
FS-84
$1.5 billion. AIM has contractually agreed to limit total annual operating
expenses (excluding interest, taxes, dividends on short sales, extraordinary
items and increases in expenses due to expense offset arrangements, if any) for
Class A, Class B and Class C shares to 2.00%, 2.50% and 2.50%, respectively.
During the six months ended April 30, 2001, AIM waived fees of $94,638.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund and the Portfolio. For the six months ended
April 30, 2001, AIM was paid $24,863 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay AIM Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended April 30, 2001,
AFS was paid $43,674 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended April 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $31,022,
$67,034 and $2,878, respectively, as compensation under the Plans.
AIM Distributors received commissions of $4,222 from sales of the Class A
shares of the Fund during the six months ended April 30, 2001. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
2001, AIM Distributors received $1,504 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the six months ended April 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $298 and reductions in custodian fees of $50 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $348.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended April
30, 2001, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly, and the borrower fails to return the securities. It is
the Fund's policy to obtain additional collateral from or return excess
collateral to the borrower by the end of the next business day. Therefore, the
value of the collateral may be temporarily less than the value of the securities
on loan.
At April 30, 2001, securities with an aggregate value of $672,315 were on loan
to brokers. The loans were secured by cash collateral of $685,761 received by
the Portfolio and invested in affiliated money market funds as follows: $342,881
in STIC Liquid Assets Portfolio and $342,880 in STIC Prime Portfolio. For the
six months ended April 30, 2001, the Portfolio received fees of $3,300 for
securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the six months ended April 30, 2001
was $23,360,365 and $24,312,620, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of April 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 5,202,049 ------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (1,047,780) =============================================================================== Net unrealized appreciation of investment securities $ 4,154,269 _______________________________________________________________________________ =============================================================================== Investments have the same cost for tax and financial statement purposes. |
FS-85
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 2001 and the year ended October 31, 2000 were as follows:
APRIL 30, 2001 OCTOBER 31, 2000
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- -----------
Sold:
Class A 360,232 $ 4,681,235 434,021 $ 5,508,796
----------------------------------------------------------------------------------------------------------------
Class B 193,514 2,420,928 255,733 3,154,314
----------------------------------------------------------------------------------------------------------------
Class C 61,186 763,212 77,757 964,884
----------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 1,495 269,584
================================================================================================================
Conversion of Advisor Class shares to Class A shares**:
Class A -- -- 16,352 194,590
----------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (16,069) (194,590)
================================================================================================================
Reacquired:
Class A (338,194) (4,210,478) (708,505) (9,041,786)
----------------------------------------------------------------------------------------------------------------
Class B (178,204) (2,146,187) (792,579) (9,555,314)
----------------------------------------------------------------------------------------------------------------
Class C (27,138) (327,635) (43,052) (536,368)
----------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (7,719) (97,438)
================================================================================================================
71,396 $ 1,181,075 (782,566) $(9,333,328)
________________________________________________________________________________________________________________
================================================================================================================
|
* Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). ** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ------- ------- ------- ------- -------
Net asset value, beginning of period $ 12.22 $ 12.12 $ 10.95 $ 20.65 $ 17.43 $ 11.44
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.02 0.02 0.02 (0.11) (0.25) (0.24)
-------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 1.64 0.08 1.15 (8.91) 4.08 6.28
===============================================================================================================================
Total from investment operations 1.66 0.10 1.17 (9.02) 3.83 6.04
===============================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- (0.19) -- (0.04)
-------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- -- (0.49) (0.61) (0.01)
===============================================================================================================================
Total distributions -- -- -- (0.68) (0.61) (0.05)
===============================================================================================================================
Net asset value, end of period $ 13.88 $ 12.22 $ 12.12 $ 10.95 $ 20.65 $ 17.43
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Total return(b) 13.58% 0.74% 10.68% (45.02)% 22.64% 53.04%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $14,654 $12,638 $15,664 $19,463 $69,975 $48,729
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.00%(c) 2.00% 2.00% 1.98% 2.03% 2.20%
-------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.71%(c) 2.80% 2.30% 2.29% 2.13% 2.30%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets 0.30%(c) 0.18% 0.19% (0.75)% (1.41)% (1.55)%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Portfolio turnover rate 91% 105% 123% 201% 321% 94%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of $12,511,538.
FS-86
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ------- ------- ------- ------- -------
Net asset value, beginning of period $ 11.88 $ 11.84 $ 10.75 $ 20.37 $ 17.29 $ 11.36
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.01) (0.04) (0.04) (0.18) (0.33) (0.31)
-------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 1.58 0.08 1.13 (8.76) 4.02 6.25
===============================================================================================================================
Total from investment operations 1.57 0.04 1.09 (8.94) 3.69 5.94
===============================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- (0.19) -- --
-------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- -- (0.49) (0.61) (0.01)
===============================================================================================================================
Total distributions -- -- -- (0.68) (0.61) (0.01)
===============================================================================================================================
Net asset value, end of period $ 13.45 $ 11.88 $ 11.84 $ 10.75 $ 20.37 $ 17.29
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Total return(b) 13.22% 0.34% 10.14% (45.25)% 21.99% 52.39%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $15,736 $13,710 $20,019 $28,996 $86,812 $57,749
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50% 2.50% 2.48% 2.53% 2.70%
-------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 3.21%(c) 3.30% 2.80% 2.79% 2.63% 2.80%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets (0.20)%(c) (0.32)% (0.31)% (1.25)% (1.91)% (2.05)%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Portfolio turnover rate 91% 105% 123% 201% 321% 94%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $13,517,939.
CLASS C
---------------------------------------------------
SIX MONTHS MARCH 1, 1999
ENDED YEAR ENDED (DATE SALES COMMENCED)
APRIL 30, OCTOBER 31, TO OCTOBER 31,
2001 2000(a) 1999(a)
---------- ----------- ----------------------
Net asset value, beginning of period $11.88 $11.84 $10.00
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.01) (0.04) (0.03)
-----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.59 0.08 1.87
=================================================================================================================
Total from investment operations 1.58 0.04 1.84
=================================================================================================================
Net asset value, end of period $13.46 $11.88 $11.84
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 13.30% 0.34% 18.40%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 972 $ 453 $ 41
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.50%(c) 2.50% 2.50%(d)
-----------------------------------------------------------------------------------------------------------------
Without fee waivers 3.21%(c) 3.30% 2.80%(d)
=================================================================================================================
Ratio of net investment income (loss) to average net assets (0.20)%(c) (0.32)% (0.31)%(d)
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 91% 105% 123%
_________________________________________________________________________________________________________________
=================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $580,414.
(d) Annualized.
FS-87
NOTE 9-SUBSEQUENT EVENT
At a meeting held on June 12, 2001, the Board of Trustees voted to request
shareholders to approve certain proposals relating to the restructuring of the
Fund.
The Board approved a restructuring of the Fund which will eliminate the Fund's
current master-feeder structure and cause the Fund to redeem its interest in the
Global Resources Portfolio (the "Portfolio").
The Board of Trustees has also approved certain changes to the Fund's
investment strategies. Effective on or about September 1, 2001, the Fund will
focus its investments in securities of issuers in the energy sector. The energy
sector is comprised of companies that develop, produce, provide, operate, own or
distribute products or services relating to energy. In connection with the
proposed changes to reflect the focus in the energy sector, the Board has
approved a change to the name of the Fund to "AIM Global Energy Fund."
FS-88
SCHEDULE OF INVESTMENTS
April 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-81.22%
AEROSPACE/DEFENSE-0.88%
Lockheed Martin Corp. 300,000 $ 10,548,000
===============================================================
BIOTECHNOLOGY-5.84%
Amgen Inc.(a) 300,000 18,342,000
---------------------------------------------------------------
Cephalon, Inc.(a) 94,000 5,987,800
---------------------------------------------------------------
Genzyme Corp.(a) 50,000 5,448,500
---------------------------------------------------------------
IDEC Pharmaceuticals Corp.(a) 762,000 37,490,400
---------------------------------------------------------------
Invitrogen Corp.(a) 44,000 3,102,440
===============================================================
70,371,140
===============================================================
BROADCASTING (TELEVISION, RADIO & CABLE)-1.50%
General Motors Corp.-Class H(a) 850,000 18,062,500
===============================================================
COMMUNICATIONS EQUIPMENT-6.01%
CIENA Corp.(a) 400,000 22,024,000
---------------------------------------------------------------
Comverse Technology, Inc.(a) 200,000 13,700,000
---------------------------------------------------------------
L-3 Communications Holdings,
Inc.(a) 165,000 12,746,250
---------------------------------------------------------------
ONI Systems Corp.(a) 200,000 7,186,000
---------------------------------------------------------------
Sonus Networks, Inc.(a) 660,000 16,803,600
===============================================================
72,459,850
===============================================================
COMPUTERS (HARDWARE)-6.00%
Apple Computer, Inc.(a) 232,000 5,913,680
---------------------------------------------------------------
Dell Computer Corp.(a) 600,000 15,774,000
---------------------------------------------------------------
International Business Machines
Corp. 440,000 50,661,600
===============================================================
72,349,280
===============================================================
COMPUTERS (NETWORKING)-2.97%
Cisco Systems, Inc.(a) 200,000 3,396,000
---------------------------------------------------------------
Juniper Networks, Inc.(a)(b) 550,000 32,466,500
===============================================================
35,862,500
===============================================================
COMPUTERS (PERIPHERALS)-0.82%
EMC Corp.(a) 250,000 9,900,000
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-21.40%
BEA Systems, Inc.(a) 1,450,000 59,232,500
---------------------------------------------------------------
BMC Software, Inc.(a) 1,600,000 38,704,000
---------------------------------------------------------------
Computer Associates International,
Inc. 625,000 20,118,750
---------------------------------------------------------------
eBay Inc.(a) 62,100 3,134,808
---------------------------------------------------------------
Henry (Jack) & Associates, Inc. 400,000 11,276,000
---------------------------------------------------------------
Microsoft Corp.(a) 900,000 60,975,000
---------------------------------------------------------------
Oracle Corp.(a) 1,450,000 23,432,000
---------------------------------------------------------------
Siebel Systems, Inc.(a) 250,000 11,395,000
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
VERITAS Software Corp.(a) 500,000 $ 29,805,000
===============================================================
258,073,058
===============================================================
ELECTRICAL EQUIPMENT-0.51%
Solectron Corp.(a) 240,000 6,108,000
===============================================================
ELECTRONICS (INSTRUMENTATION)-1.24%
Alpha Industries, Inc.(a) 300,000 7,371,000
---------------------------------------------------------------
Newport Corp. 200,000 7,552,000
===============================================================
14,923,000
===============================================================
ELECTRONICS (SEMICONDUCTORS)-16.61%
Advanced Micro Devices, Inc.(a) 800,000 24,800,000
---------------------------------------------------------------
Analog Devices, Inc.(a) 500,000 23,655,000
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 600,000 15,612,000
---------------------------------------------------------------
Intel Corp. 500,000 15,455,000
---------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 250,000 12,775,000
---------------------------------------------------------------
Micron Technology, Inc.(a) 900,000 40,842,000
---------------------------------------------------------------
NVIDIA Corp.(a) 170,000 14,161,000
---------------------------------------------------------------
Pixelworks, Inc.(a) 100,000 2,270,000
---------------------------------------------------------------
RF Micro Devices, Inc.(a) 1,200,000 35,256,000
---------------------------------------------------------------
Texas Instruments Inc. 400,000 15,480,000
===============================================================
200,306,000
===============================================================
EQUIPMENT (SEMICONDUCTOR)-2.28%
KLA-Tencor Corp.(a) 200,000 10,992,000
---------------------------------------------------------------
Novellus Systems, Inc.(a)(b) 300,000 16,545,000
===============================================================
27,537,000
===============================================================
HEALTH CARE (DRUGS--GENERIC & OTHER)-1.38%
Gilead Sciences, Inc.(a) 340,000 16,653,200
===============================================================
INVESTMENTS-2.56%
Nasdaq-100 Index Tracking Stock(a) 670,000 30,920,500
===============================================================
POWER PRODUCERS (INDEPENDENT)-0.76%
Calpine Corp.(a) 160,000 9,118,400
===============================================================
SERVICES (COMMERCIAL & CONSUMER)-0.90%
Iron Mountain Inc.(a) 300,000 10,845,000
===============================================================
SERVICES (COMPUTER SYSTEMS)-4.42%
Electronic Data Systems Corp. 827,000 53,341,500
===============================================================
SERVICES (DATA PROCESSING)-2.38%
Concord EFS, Inc.(a) 65,000 3,025,750
---------------------------------------------------------------
Fiserv, Inc.(a) 464,000 25,677,760
===============================================================
28,703,510
===============================================================
|
FS-89
MARKET
SHARES VALUE
TELEPHONE-2.76%
Qwest Communications International
Inc.(a) 606,000 $ 24,785,400
---------------------------------------------------------------
Time Warner Telecom Inc.-Class A(a) 167,000 8,458,550
===============================================================
33,243,950
===============================================================
Total Domestic Common Stocks
(Cost $1,027,060,693) 979,326,388
===============================================================
FOREIGN STOCKS & OTHER EQUITY INTERESTS-17.69%
BERMUDA-1.04%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(a) 1,000,000 12,530,000
===============================================================
CANADA-1.68%
Biovail Corp. (Health
Care-Drugs-Generic & Other)(a) 352,900 13,861,912
---------------------------------------------------------------
Celestica Inc.
(Electronics-Semiconductors)(a) 125,000 6,387,500
===============================================================
20,249,412
===============================================================
FINLAND-5.39%
Nokia Oyj-ADR (Communications
Equipment) 1,900,000 64,961,000
===============================================================
HONG KONG-2.33%
China Mobile Ltd.
(Telecommunications-
Cellular/Wireless)(a) 5,700,000 28,065,137
===============================================================
ISRAEL-2.03%
Check Point Software Technologies
Ltd. (Computers-Software &
Services)(a) 390,000 24,464,700
===============================================================
JAPAN-2.81%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long
Distance) 2,001 12,713,245
---------------------------------------------------------------
|
MARKET
SHARES VALUE
JAPAN-(CONTINUED)
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 1,030 $ 21,174,376
===============================================================
33,887,621
===============================================================
SPAIN-0.81%
Telefonica, S.A. (Telephone)(a) 578,409 9,792,833
===============================================================
SWEDEN-0.53%
Telefonaktiebolaget LM Ericsson
A.B.-ADR (Communications
Equipment) 1,000,000 6,430,000
===============================================================
UNITED KINGDOM-1.07%
Amdocs Ltd.
(Telecommunications-Cellular/
Wireless)(a) 220,000 12,958,000
===============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$205,174,387) 213,338,703
===============================================================
MONEY MARKET FUNDS-0.37%
STIC Liquid Assets Portfolio(c) 2,256,251 2,256,251
---------------------------------------------------------------
STIC Prime Portfolio(c) 2,256,251 2,256,251
===============================================================
Total Money Market Funds (Cost
$4,512,502) 4,512,502
===============================================================
TOTAL INVESTMENTS-99.28% (Cost
$1,236,747,582) 1,197,177,593
===============================================================
OTHER ASSETS LESS LIABILITIES-0.72% 8,656,230
===============================================================
NET ASSETS-100.00% $1,205,833,823
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) A portion of this security is subject to call options written. See Note 8.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-90
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$1,236,747,582)* $1,197,177,593
-------------------------------------------------------------
Receivables for:
Investments sold 22,957,950
-------------------------------------------------------------
Fund shares sold 2,029,833
-------------------------------------------------------------
Dividends 276,391
-------------------------------------------------------------
Collateral for securities loaned 119,048,727
-------------------------------------------------------------
Other assets 48,986
=============================================================
Total assets 1,341,539,480
=============================================================
LIABILITIES:
Payables for:
Investments purchased 5,800,169
-------------------------------------------------------------
Fund shares reacquired 4,454,560
-------------------------------------------------------------
Options written (premiums received
$1,606,854) 4,153,750
-------------------------------------------------------------
Collateral upon return of securities loaned 119,048,727
-------------------------------------------------------------
Accrued advisory fees 851,056
-------------------------------------------------------------
Accrued administrative services fees 11,937
-------------------------------------------------------------
Accrued distribution fees 788,418
-------------------------------------------------------------
Accrued trustees' fees 8,775
-------------------------------------------------------------
Accrued transfer agent fees 384,394
-------------------------------------------------------------
Accrued operating expenses 203,871
=============================================================
Total liabilities 135,705,657
=============================================================
Net assets applicable to shares outstanding $1,205,833,823
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 627,870,280
_____________________________________________________________
=============================================================
Class B $ 533,600,301
_____________________________________________________________
=============================================================
Class C $ 44,363,242
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 57,847,976
_____________________________________________________________
=============================================================
Class B 52,217,070
_____________________________________________________________
=============================================================
Class C 4,342,361
_____________________________________________________________
=============================================================
Class A:
Net asset value per share $ 10.85
-------------------------------------------------------------
Offering price per share:
(Net asset value of $10.85 divided by
95.25%) $ 11.39
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 10.22
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 10.22
_____________________________________________________________
=============================================================
|
* At April 30, 2001, securities with an aggregate market value of $116,714,438 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended April 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends from affiliated money market funds $ 2,441,176
-------------------------------------------------------------
Dividends (net of foreign withholding tax of
$14,218) 348,428
-------------------------------------------------------------
Interest 35,822
-------------------------------------------------------------
Security lending income 892,968
=============================================================
Total investment income 3,718,394
=============================================================
EXPENSES:
Advisory fees 8,549,178
-------------------------------------------------------------
Administrative services fees 80,025
-------------------------------------------------------------
Custodian fees 92,724
-------------------------------------------------------------
Distribution fees -- Class A 2,289,578
-------------------------------------------------------------
Distribution fees -- Class B 4,104,153
-------------------------------------------------------------
Distribution fees -- Class C 336,300
-------------------------------------------------------------
Transfer agent fees 2,897,909
-------------------------------------------------------------
Trustees' fees 36,498
-------------------------------------------------------------
Other 321,891
=============================================================
Total expenses 18,708,256
=============================================================
Less: Expenses paid indirectly (45,365)
=============================================================
Net expenses 18,662,891
=============================================================
Net investment income (loss) (14,944,497)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (893,852,139)
-------------------------------------------------------------
Foreign currencies (53,461)
-------------------------------------------------------------
Option contracts written 8,253,342
=============================================================
(885,652,258)
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (821,565,107)
-------------------------------------------------------------
Foreign currencies (20,659)
-------------------------------------------------------------
Option contracts written (2,546,896)
=============================================================
(824,132,662)
=============================================================
Net gain (loss) from investment securities,
foreign currencies and option contracts (1,709,784,920)
=============================================================
Net increase (decrease) in net assets
resulting from operations $(1,724,729,417)
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
FS-91
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 2001 and the year ended October 31, 2000
(Unaudited)
APRIL 30, OCTOBER 31,
2001 2000
--------------- --------------
OPERATIONS:
Net investment income (loss) $ (14,944,497) $ (2,878,360)
-----------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and option contracts (885,652,258) 419,148,015
-----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies and
option contracts (824,132,662) (13,561,828)
===============================================================================================
Net increase (decrease) in net assets resulting from
operations (1,724,729,417) 402,707,827
===============================================================================================
Distributions to shareholders from net realized gains:
Class A (193,133,111) (122,942,635)
-----------------------------------------------------------------------------------------------
Class B (182,365,741) (112,289,611)
-----------------------------------------------------------------------------------------------
Class C (14,882,419) (2,428,890)
-----------------------------------------------------------------------------------------------
Advisor Class* -- (257,983)
-----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 175,888,372 376,834,670
-----------------------------------------------------------------------------------------------
Class B 92,330,281 447,353,903
-----------------------------------------------------------------------------------------------
Class C 9,549,370 121,591,284
-----------------------------------------------------------------------------------------------
Advisor Class* -- (2,868,709)
===============================================================================================
Net increase (decrease) in net assets (1,837,342,665) 1,107,699,856
===============================================================================================
NET ASSETS:
Beginning of period 3,043,176,488 1,935,476,632
===============================================================================================
End of period $ 1,205,833,823 $3,043,176,488
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 2,151,310,871 $1,873,542,848
-----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (14,944,497) --
-----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and option contracts (888,380,988) 387,652,541
-----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and option contracts (42,151,563) 781,981,099
===============================================================================================
$ 1,205,833,823 $3,043,176,488
_______________________________________________________________________________________________
===============================================================================================
|
* Advisor Class shares were converted to Class A shares effective as of the close of business on February 11, 2000.
See Notes to Financial Statements.
FS-92
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Telecommunications and Technology Fund (the "Fund") is a separate
series of AIM Investment Funds (the "Trust"). The Trust is organized as a
Delaware business trust and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end series management investment
company consisting of nine separate series portfolios, each having an unlimited
number of shares of beneficial interest. The Fund currently offers three
different classes of shares: Class A shares, Class B shares and Class C shares.
The Fund formerly offered Advisor Class shares; however, as of the close of
business on February 11, 2000 the Advisor Class shares were converted to Class A
shares. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Advisor
Class shares were sold without a sales charge. Matters affecting each portfolio
or class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is long-term growth of
capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price as of the close of the customary trading session on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. Such
FS-93
fluctuations are included with the net realized and unrealized gain or loss from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably.
G. When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded 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 written. The current market value of a written option is the mean between the last bid and asked prices on that day. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received.
H. Expenses -- Distribution expenses directly attributable to a class of shares are charged to that class' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.975% on the first $500 million of the Fund's average daily net assets,
plus 0.95% on the next $500 million of the Fund's average daily net assets, plus
0.925% on the next $500 million of the Fund's average daily net assets, plus
0.90% on the Fund's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit total annual operating expenses (excluding
interest, taxes, dividends on short sales, extraordinary items and increases in
expenses due to expense offset arrangements, if any) for Class A, Class B and
Class C shares to 2.00%, 2.50% and 2.50%, respectively.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended April 30, 2001, AIM
was paid $80,025 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended April 30, 2001,
AFS was paid $2,044,440 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended April 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $2,289,578,
$4,104,153 and $336,300, respectively, as compensation under the Plans.
AIM Distributors received commissions of $210,027 from sales of the Class A
shares of the Fund during the six months ended April 30, 2001. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended April 30,
2001, AIM Distributors received $40,172 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
For the six months ended April 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $22,063 and reductions in custodian fees of $23,302 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $45,365.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended April
30, 2001, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value, determined daily, of the loaned
FS-94
securities. Such collateral will be cash or debt securities issued or guaranteed
by the U.S. Government or any of its agencies. Cash collateral pursuant to these
loans is invested in short-term money market instruments or affiliated money
market funds. Lending securities entails a risk of loss to the Fund if and to
the extent that the market value of the securities loaned were to increase and
the borrower did not increase the collateral accordingly, and the borrower fails
to return the securities. It is the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of the
next business day. Therefore, the value of the collateral may be temporarily
less than the value of the securities on loan.
At April 30, 2001, securities with an aggregate value of $116,714,438 were on
loan to brokers. The loans were secured by cash collateral of $119,048,727
received by the Fund and invested in affiliated money market funds as follows:
$59,524,364 in STIC Liquid Assets Portfolio and $59,524,363 in STIC Prime
Portfolio. For the six months ended April 30, 2001, the Fund received fees of
$892,968 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 2001 was
$1,770,196,775 and $1,797,307,625, respectively.
The amount of unrealized appreciation (depreciation)of investment securities,
for tax purposes, as of April 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 92,158,358 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (131,729,401) ========================================================= Net unrealized appreciation (depreciation) of investment securities $ (39,571,043) _________________________________________________________ ========================================================= Cost of investments for tax purposes is $1,236,748,636. |
FS-95
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended April 30, 2001 and the year ended October 31, 2000 were as follows:
APRIL 30, 2001 OCTOBER 31, 2000
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
Sold:
Class A 9,166,133 $ 140,047,717 15,814,510 $ 575,875,480
------------------------------------------------------------------------------------------------------------------------
Class B 4,676,453 72,232,487 17,939,437 618,630,557
------------------------------------------------------------------------------------------------------------------------
Class C 1,119,064 16,979,263 4,043,413 141,415,869
------------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 92,071 3,241,706
========================================================================================================================
Issued as reinvestment of dividends:
Class A 8,804,464 178,550,407 3,700,530 113,714,341
------------------------------------------------------------------------------------------------------------------------
Class B 8,823,489 168,792,256 3,497,829 102,890,796
------------------------------------------------------------------------------------------------------------------------
Class C 739,052 14,130,654 70,053 2,060,345
------------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- 7,925 250,992
========================================================================================================================
Issued in connection with acquisitions:**
Class A -- -- 157,592 6,147,658
------------------------------------------------------------------------------------------------------------------------
Advisor Class -- -- (152,813) (6,147,658)
========================================================================================================================
Reacquired:
Class A (9,576,082) (142,709,752) (8,920,012) (318,902,809)
------------------------------------------------------------------------------------------------------------------------
Class B (9,796,814) (148,694,463) (8,251,217) (274,167,450)
------------------------------------------------------------------------------------------------------------------------
Class C (1,448,381) (21,560,548) (666,660) (21,884,930)
------------------------------------------------------------------------------------------------------------------------
Advisor Class* -- -- (6,114) (213,749)
========================================================================================================================
12,507,378 $ 277,768,021 27,326,544 $ 942,911,148
________________________________________________________________________________________________________________________
========================================================================================================================
|
* Advisor Class share activity for the period November 1, 1999 through February 11, 2000 (date of conversion). ** Effective as of the close of business February 11, 2000, pursuant to approval by the Board of Trustees on November 3, 1999, all outstanding shares of Advisor Class shares were converted to Class A shares of the fund.
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended April 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Beginning of period -- $ --
---------------------------------------------------------------------------------------
Written 53,620 21,801,377
---------------------------------------------------------------------------------------
Closed (45,280) (18,885,999)
---------------------------------------------------------------------------------------
Exercised (3,100) (883,793)
---------------------------------------------------------------------------------------
Expired (1,900) (424,731)
=======================================================================================
End of period 3,340 $ 1,606,854
_______________________________________________________________________________________
=======================================================================================
|
Open call option contracts written at April 30, 2001 were as follows:
APRIL 30, UNREALIZED
CONTRACT STRIKE NUMBER OF PREMIUMS 2001 APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE (DEPRECIATION)
----- -------- ------ --------- ---------- ------------ --------------
Juniper Networks, Inc. May-01 $45 1,090 $ 576,852 $1,744,000 $(1,167,148)
---------------------------------------------------------------------------------------------------------------------------
Juniper Networks, Inc. May-01 55 450 205,918 393,750 (187,832)
---------------------------------------------------------------------------------------------------------------------------
Novellus Systems, Inc. May-01 45 1,800 824,084 2,016,000 (1,191,916)
===========================================================================================================================
3,340 $1,606,854 $4,153,750 $(2,546,896)
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
FS-96
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, --------------------------------------------------------------
2001 2000(a) 1999 1998(a) 1997(a) 1996(a)
---------- ---------- ---------- -------- -------- ----------
Net asset value, beginning of period $ 30.61 $ 26.44 $ 16.28 $ 18.04 $ 16.69 $ 16.42
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11) 0.06(b) (0.25) (0.17) (0.17) (0.13)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (15.77) 7.23 10.97 (0.39) 2.93 1.22
=================================================================================================================================
Total from investment operations (15.88) 7.29 10.72 (0.56) 2.76 1.09
=================================================================================================================================
Less distributions from net realized gains (3.88) (3.12) (0.56) (1.20) (1.41) (0.82)
=================================================================================================================================
Net asset value, end of period $ 10.85 $ 30.61 $ 26.44 $ 16.28 $ 18.04 $ 16.69
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (57.78)% 27.52% 67.63% (3.16)% 17.70% 7.00%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $627,870 $1,513,595 $1,023,124 $713,904 $910,801 $1,204,428
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.83%(d) 1.63% 1.77% 1.88% 1.84% 1.79%
=================================================================================================================================
Ratio of net investment income (loss) to average
net assets (1.41)%(d) 0.16% (1.11)% (0.93)% (1.06)% (0.89)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 101% 111% 122% 75% 35% 37%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Net investment income per share reflects dividend income of $0.49 per share
recognized from the spin-off of Nortel Networks Corp. from BCE, Inc.
(c) Does not include sales charges and is not annualized for periods less than
one year.
(d) Ratios are annualized and based on average daily net assets of
$923,421,113.
CLASS B
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ------------------------------------------------------------
2001 2000(a) 1999 1998(a) 1997(a) 1996(a)
---------- ---------- -------- -------- -------- ----------
Net asset value, beginning of period $ 29.17 $ 25.43 $ 15.76 $ 17.58 $ 16.37 $ 16.20
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15) (0.11)(b) (0.35) (0.25) (0.25) (0.23)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (14.92) 6.97 10.58 (0.37) 2.87 1.22
=================================================================================================================================
Total from investment operations (15.07) 6.86 10.23 (0.62) 2.62 0.99
=================================================================================================================================
Less distributions from net realized gains (3.88) (3.12) (0.56) (1.20) (1.41) (0.82)
=================================================================================================================================
Net asset value, end of period $ 10.22 $ 29.17 $ 25.43 $ 15.76 $ 17.58 $ 16.37
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (57.86)% 26.87% 66.84% (3.67)% 17.15% 6.46%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $533,600 $1,414,915 $898,400 $614,715 $805,535 $1,007,654
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 2.33%(d) 2.13% 2.28% 2.38% 2.34% 2.29%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets (1.91)%(d) (0.34)% (1.62)% (1.43)% (1.56)% (1.39)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 101% 111% 122% 75% 35% 37%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Net investment income per share reflects dividend income of $0.49 per share
recognized from the spin-off of Nortel Networks Corp. from BCE, Inc.
(c) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(d) Ratios are annualized and based on average daily net assets of
$827,633,163.
FS-97
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
------------------------------------------
MARCH 1, 1999
SIX MONTHS (DATE SALES
ENDED YEAR ENDED COMMENCED) TO
APRIL 30, OCTOBER 31, OCTOBER 31,
2001 2000(a) 1999
---------- ----------- -------------
Net asset value, beginning of period $ 29.16 $ 25.43 $ 19.23
--------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15) (0.11)(b) (0.11)
--------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (14.91) 6.96 6.31
========================================================================================================
Total from investment operations (15.06) 6.85 6.20
========================================================================================================
Less distributions from net realized gains (3.88) (3.12) --
========================================================================================================
Net asset value, end of period $ 10.22 $ 29.16 $ 25.43
========================================================================================================
Total return(c) (57.84)% 26.83% 32.24%
________________________________________________________________________________________________________
========================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $44,363 $114,667 $12,352
________________________________________________________________________________________________________
========================================================================================================
Ratio of expenses to average net assets 2.33%(d) 2.13% 2.28%(e)
========================================================================================================
Ratio of net investment income (loss) to average net assets (1.91)%(d) (0.34)% (1.62)%(e)
________________________________________________________________________________________________________
========================================================================================================
Portfolio turnover rate 101% 111% 122%
________________________________________________________________________________________________________
========================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Net investment income per share reflects dividend income of $0.49 per share
recognized from the spin-off of Nortel Networks Corp. from BCE, Inc.
(c) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(d) Ratios are annualized and based on average daily net assets of $67,817,322.
(e) Annualized.
FS-98
PART C: OTHER INFORMATION
Item 23. Exhibits
a (1) - (a) Agreement and Declaration of Trust of Registrant, dated
May 7, 1998. (1)
- (b) First Amendment to Agreement and Declaration of Trust of
Registrant, dated August 12, 1998. (2)
- (c) Second Amendment to Agreement and Declaration of Trust of
Registrant, dated December 10, 1998. (3)
- (d) Third Amendment to Agreement and Declaration of Trust of
Registrant, dated February 4, 1999. (4)
- (e) Fourth Amendment to Agreement and Declaration of Trust of
Registrant, dated February 16, 1999. (4)
- (f) Fifth Amendment to Agreement and Declaration of Trust of
Registrant, dated February 11, 2000. (5)
- (g) Amendment No. 6 to Agreement and Declaration of Trust of
Registrant, dated May 24, 2000. (5)
- (h) Amendment No. 7 to Agreement and Declaration of Trust of
Registrant, dated June 12, 2000. (5)
- (i) Amendment No. 8 to Agreement and Declaration of Trust of
Registrant, dated June 19, 2000. (5)
- (j) Amendment No. 9 to Agreement and Declaration of Trust of
Registrant, dated December 5, 2000. (5)
- (k) Amendment No. 10 to Agreement and Declaration of Trust of
Registrant, dated June 12, 2001. (6)
- (l) Amendment No. 11 to Agreement and Declaration of Trust of
Registrant, dated September 28, 2001. (6)
b (1) - (a) Amended and Restated By-Laws of Registrant, adopted
effective May 7, 1998, amended December 10, 1998. (4)
- (b) First Amendment to Amended and Restated By-Laws of
Registrant, dated June 15, 1999. (4)
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 (1) - (a) Master Investment Advisory Agreement, dated September 11,
2000, between Registrant and A I M Advisors, Inc. (5)
- (b) Amendment No. 1, dated September 1, 2001, to the Master
Investment Advisory Agreement between Registrant and A I M
Advisors, Inc. (6)
|
- (c) Form of Amendment No. 2, dated December ___, 2001, to the
Master Investment Advisory Agreement between Registrant and A
I M Advisors, Inc. (6)
(2) - Master Intergroup Sub-Advisory Contract for Mutual Funds,
dated September 1, 2001, between A I M Advisors Inc. and
INVESCO Asset Management Limited. (6)
e (1) - (a) First Amended and Restated Master Distribution Agreement,
dated July 1, 2000, between Registrant (on behalf of its Class
A and Class C Shares) and A I M Distributors, Inc. (5)
- (b) Amendment No. 1, dated September 10, 2001, to the First
Amended and Restated Master Distribution Agreement between
Registrant (on behalf of its Class A and Class C Shares) and A
I M Distributors, Inc. (6)
- (c) Form of Amendment No. 2, dated December ___, 2001, to the
First Amended and Restated Master Distribution Agreement,
between Registrant (on behalf of its Class A and Class C
Shares) and A I M Distributors, Inc. (6)
(2) - (a) First Amended and Restated Master Distribution
Agreement, dated December 31, 2000, between Registrant (on
behalf of its Class B Shares) and A I M Distributors, Inc. (5)
- (b) Amendment No. 1 dated September 10, 2001, to the First
Amended and Restated Master Distribution Agreement, between
Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc. (6)
- (c) Form of Amendment No. 2, dated December ___, 2001, to the
First Amended and Restated Master Distribution Agreement
between Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc. (6)
(3) - Form of Selected Dealer Agreement between A I M Distributors,
Inc. and selected dealers. (5)
(4) - Form of Bank Selling Group Agreement between A I M
Distributors, Inc and banks. (3)
f (1) - Form of Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended, March 7,
2000. (6)
(2) - AIM Funds Retirement Plan for Eligible Directors/Trustees, as
restated March 7, 2000. (6)
g (1) - (a) Master Custodian Contract, dated May 1, 2000, between
Registrant and State Street Bank and Trust Company. (5)
- (b) Amendment, dated May 1, 2000, to Custodian Contract
between Registrant and State Street Bank and Trust Company.
(5)
(2) - (a) Subcustodian Agreement, dated September 9, 1994, between
Registrant, Texas Commerce Bank National Association, State
Street Bank and Trust Company and A I M Fund Services, Inc.
(6)
- (b) Amendment No. 1, dated October 2, 1998, to Subcustodian
Agreement between Registrant, Chase Bank of Texas, N.A.
(formerly Texas Commerce Bank), State Street Bank and Trust
Company and A I M Fund Services, Inc. (6)
h (1) - (a) Transfer Agency and Service Agreement, dated September 8,
1998, between Registrant and A I M Fund Services, Inc. (2)
|
- (b) Amendment No. 1, dated March 1, 1999, to Transfer Agency and Services Agreement between Registrant and A I M Fund Services, Inc. (4)
- (c) Amendment No. 2, dated July 1, 1999, to Transfer Agency and Services Agreement between Registrant and A I M Fund Services, Inc. (4)
- (d) Amendment No. 3, dated July 1, 1999, to Transfer Agency and Services Agreement between Registrant and A I M Fund Services, Inc. (4)
- (e) Amendment No. 4, dated February 11, 2000, to Transfer Agency and Services Agreement between Registrant and A I M Fund Services, Inc. (4)
- (f) Amendment No. 5, dated July 1, 2000, to the Transfer Agency and Services Agreement, dated September 8, 1998, between Registrant and A I M Fund Services, Inc. (5)
(2) - (a) Remote Access and Related Services Agreement, dated as of December 23, 1994. (1)
- (b) Amendment No. 1, dated October 4, 1995, to the Remote Access and Related Services Agreement. (1)
- (c) Addendum No. 2, dated October 12, 1995, to the Remote Access and Related Services Agreement. (1)
- (d) Amendment No. 3, dated February 1, 1997, to the Remote Access and Related Services Agreement. (1)
- (e) Exhibit 1, effective as of August 4, 1997, to the Remote Access and Related Services Agreement. (1)
- (f) Amendment No. 4, dated June 30, 1998, to the Remote Access and Related Services Agreement. (2)
- (g) Amendment No. 5, dated July 1, 1998, to the Remote Access and Related Services Agreement. (2)
- (h) Amendment No. 6, dated August 30, 1999, to the Remote Access and Related Services Agreement. (5)
- (i) Amendment No. 7, dated February 29, 2000, to the Remote Access and Related Services Agreement for IMPRESSPlus Forms Processing Software between Registrant and FIRST DATA INVESTOR SERVICES GROUP, INC. (5)
- (j) Amendment No. 8, dated June 26, 2000, to the Remote Access and Related Services Agreement for AccessTA Services, dated December 23, 1994, between Registrant and PFPC. (5)
- (k) Amendment No. 9, dated June 26, 2000, Restated and Amended Amendment No. 6 to the Remote Access and Related Services Agreement for IMPRESSNetTM Services, dated December 23, 1994, between Registrant and PFPC. (5)
- (l) Amendment No. 10, dated July 28, 2000, to the Remote
Access and Related Services Agreement, dated December 23,
1994. between Registrant and PFPC. (5)
- (m) Letter amendment, dated August 22, 2000, to Amendment No.
9, dated June 26, 2000 to the Remote Access and Related
Services Agreement for IMPRESSNetTM Services, dated December
23, 1994, between Registrant and PFPC. (5)
(3) - Preferred Registration Technology Escrow Agreement, dated
September 10, 1997. (1)
(4) - (a) Master Administrative Services Agreement, dated September
11, 2000, between Registrant and A I M Advisors, Inc. (5)
- (b) Amendment No. 1, dated September 1, 2001, to the Master
Administrative Services Agreement between Registrant and A I M
Advisors, Inc. (6)
- (c) Form of Amendment No. 2, dated December _____, 2001, to
the Master Administrative Services Agreement between
Registrant and A I M Advisors, Inc. (6)
(5) - Interfund Loan Agreement, dated September 18, 2001, between
Registrant and A I M Advisors, Inc. (6)
i (1) - Opinion and Consent of Ballard Spahr Andrews Ingersoll LLP.
(6)
j (1) - Consent of PricewaterhouseCoopers LLP. (6)
k - Financial Statements - None.
l - Form of Agreement Concerning Initial Capitalization of
Registrant's AIM Global Biotech Fund, dated ________. (6)
m (1) - (a) Second Amended and Restated Master Distribution Plan of
Registrant, effective as of July 1, 2000, with respect to
Class A and Class C Shares. (5)
- (b) Amendment No. 1, dated September 1, 2001, to Registrant's
Second Amended and Restated Master Distribution Plan on behalf
of its Class A and Class C Shares. (6)
- (c) Form of Amendment No. 2, dated December ____, 2001, to
Registrant's Second Amended and Restated Distribution Plan on
behalf of its Class A and Class C Shares. (6)
(2) - (a) First Amended and Restated Master Distribution Plan,
effective as of December 31, 2000, with respect to Class B
Shares. (5)
- (b) Amendment No. 1, dated September 10, 2001, to Registrant's
First Amended and Restated Distribution Plan on behalf of its
Class B Shares. (6)
- (c) Form of Amendment No. 2, dated December ___, 2001, to
Registrant's First Amended and Restated Distribution Plan on
behalf of its Class B Shares. (6)
(3) - Form of Shareholder Service Agreement to be used in connection
with Registrant's Master Distribution Plans for Bank Trust
Departments. (6)
(4) - Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan. (6)
(5) - Form of Variable Group Annuity Contractholder Service
Agreement. (6)
|
(6) - Form of Agency Pricing Agreement to be used in connection with
Registrant's Master Distribution Plan is filed herewith
electronically. (6)
(7) - Form of Service Agreement for Bank Trust Departments and for
Broker to be used in connection with Registrant's Master
Distribution Plan. (6)
(8) - Form of Shareholder Service Agreement for Shares of the Mutual
Funds is filed herewith electronically. (6)
(n) (1) - Multiple Class Plan of Registrant, AIM Growth Series and AIM
Series Trust, effective February 11, 2000. (5)
(o) - Reserved.
(p) (1) - The A I M Management Group Code of Ethics, as amended August
17, 1999, relating to A I M Management Group Inc. and A I M
Advisors, Inc. (4)
(2) - The AIM Funds Code of Ethics of Registrant, effective
September 28, 2000. (5)
|
(1) Incorporated herein by reference to PEA No. 55, filed on
August 26, 1998.
(2) Incorporated herein by reference to PEA No. 56, filed on December
30, 1998.
(3) Incorporated herein by reference to PEA No. 57, filed on February
22, 1999.
(4) Incorporated herein by reference to PEA No. 58, filed on February
24, 2000.
(5) Incorporated herein by reference to PEA No. 59, filed on February
28, 2001.
(6) Filed herewith electronically.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
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, as amended, also provides that every person who is, or has been, a Trustee or Officer of the Registrant is indemnified to the fullest extent permitted by the Delaware Business Trust Act, the Registrant's By-Laws and other applicable law.
A I M Advisors, Inc. ("AIM"), the Registrant and other investment companies managed by AIM and their respective officers, trustees, directors and employees (the "Insured Parties") are insured under a joint Mutual Fund and Investment Advisory Professional and Directors and Officers Liability Policy, issued by ICI Mutual Insurance Company, with a $35,000,000 limit of liability.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Trustees, officers and controlling persons of the Registrant pursuant to the
foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a Trustee, officer or controlling person of the Registrant in connection with the successful defense of any action suit or proceeding) is asserted by such Trustee, officer or controlling person in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy, as expressed in the Act and be governed by final adjudication of such issue.
Section 7 of the Sub-Advisory Contract between AIM and INVESCO Asset Management Limited (collectively, the "Sub-Advisory Contract") provides that the Sub-advisor shall not be liable 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 Sub-Advisory Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Sub-advisor in the performance by the Sub-advisor of its duties or from reckless disregard by the Sub-advisor of its obligations and duties under the Sub-Advisory Contract.
Item 26. Business and Other Connections of the Investment Advisor
See the material under the headings "Trustees and Executive Officers" and "Management" included in Part B (Statement of Additional Information) of this Post-Effective Amendment. Information as to the Directors and Officers of A I M Advisors, Inc., INVESCO (NY), Inc. and INVESCO Asset Management Limited is included in Schedule A and Schedule D of Part I of each entity's Form ADV (File No. 801-12313, File No. 801-10254 and File No. 8-50197, respectively), filed with the Securities and Exchange Commission, which are incorporated herein by reference thereto.
Item 27. Principal Underwriters
(a) A I M Distributors, Inc., the Registrant's principal underwriter, also acts as a principal underwriter to the following investment companies:
AIM Advisor Funds
AIM Equity Funds
AIM Floating Rate Fund
AIM Funds Group
AIM Growth Series
AIM International Funds, Inc.
AIM Investment Securities Funds
AIM Series Trust
AIM Special Opportunities Funds
AIM Summit Fund
AIM Tax-Exempt Funds
AIM Variable Insurance Funds
(b)
Name and Principal Position and Offices with Positions and Offices
------------------ ------------------------- ---------------------
Business Address* Underwriter with Registrant
----------------- ----------- ---------------
Robert H. Graham Chairman & Director Chairman, President &
Trustee
Michael J. Cemo President, Chief Executive Officer None
& Director
Gary T. Crum Director Senior Vice President
James L. Salners Executive Vice President None
W. Gary Littlepage Senior Vice President & Director None
Marilyn M. Miller Senior Vice President None
Gene L. Needles Senior Vice President None
Mark D. Santero Senior Vice President None
Leslie A. Schmidt Senior Vice President None
James E. Stueve Senior Vice President None
Michael C. Vessels Senior Vice President None
James R. Anderson Vice President & Chief None
Compliance Officer
Mary A. Corcoran Vice President None
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
Dawn M. Hawley Vice President & Treasurer None
Ofelia M. Mayo Vice President, General Counsel Assistant Secretary
& Assistant Secretary
Kim T. McAuliffe Vice President None
Charles H. McLaughlin Vice President None
Carol F. Relihan Vice President Senior Vice President
& Secretary
Linda L. Warriner Vice President None
Kathleen J. Pflueger Secretary Assistant Secretary
|
(c) - None
Item 28. Location of Accounts and Records
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, will maintain physical possession of each such account, book or other document of the Registrant at its principal executive offices, except for those maintained by the Registrant's Custodian, State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, and the Registrant's Transfer Agent and Dividend Paying Agent, A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739.
Item 29. Management Services
None.
Item 30. Undertakings
Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, Texas on the 12th day of October, 2001.
REGISTRANT: AIM INVESTMENT FUNDS
By: /s/ ROBERT H. GRAHAM
---------------------------
Robert H. Graham, President
|
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SIGNATURES TITLE DATE
---------- ----- ----
/s/ ROBERT H. GRAHAM Chairman, Trustee & President October 12, 2001
------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ FRANK S. BAYLEY Trustee October 12, 2001
-------------------------
(Frank S. Bayley)
/s/ BRUCE L. CROCKETT Trustee October 12, 2001
-------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Trustee October 12, 2001
-------------------------
(Owen Daly II)
/s/ ALBERT R. DOWDEN Trustee October 12, 2001
-------------------------
(Albert R. Dowden)
/s/ EDWARD K. DUNN, JR. Trustee October 12, 2001
-------------------------
(Edward K. Dunn, Jr.)
/s/ JACK M. FIELDS Trustee October 12, 2001
-------------------------
(Jack M. Fields)
/s/ CARL FRISCHLING Trustee October 12, 2001
-------------------------
(Carl Frischling)
/s/ PREMA MATHAI-DAVIS Trustee October 12, 2001
-------------------------
(Prema Mathai-Davis)
/s/ LEWIS F. PENNOCK Trustee October 12, 2001
-------------------------
(Lewis F. Pennock)
/s/ RUTH H. QUIGLEY Trustee October 12, 2001
-------------------------
(Ruth H. Quigley)
/s/ LOUIS S. SKLAR Trustee October 12, 2001
-------------------------
(Louis S. Sklar)
/s/ DANA R. SUTTON Vice President & Treasurer October 12, 2001
------------------------- (Principal Financial and
(Dana R. Sutton) Accounting Officer)
|
INDEX
Exhibit No. Description
----------- -----------
a(1)(k) Amendment No. 10 to Agreement and Declaration of Trust of
Registrant, dated June 12, 2001.
a(1)(l) Amendment No. 11 to Agreement and Declaration of Trust of
Registrant, dated September 28, 2001.
d(1)(b) Amendment No 1, dated September 1, 2001, to the Master
Investment Advisory Agreement between Registrant and A I M
Advisors, Inc.
d(1)(c) Form of Amendment No. 2, dated December ___, 2001, to the
Master Investment Advisory Agreement between Registrant and A
I M Advisors, Inc.
d(2) Master Intergroup Sub-Advisory Contract for Mutual Funds,
dated September 1, 2001, between A I M Advisors Inc. and
INVESCO Asset Management Limited.
e(1)(b) Amendment No. 1, dated September 10, 2001, to First Amended
and Restated Master Distribution Agreement, between Registrant
(on behalf of its Class A and Class C Shares), and A I M
Distributors, Inc.
e(1)(c) Form of Amendment No. 2, dated December ___, 2001, to the
First Amended and Restated Master Distribution Agreement,
between Registrant (on behalf of its Class A and Class C
Shares) and A I M Distributors, Inc.
e(2)(b) Amendment No. 1 dated September 10, 2001, to the First Amended
and Restated Master Distribution Agreement, between Registrant
(on behalf of its Class B Shares) and A I M Distributors, Inc.
e(2)(c) Form of Amendment No. 2, dated December ___, 2001, to the
First Amended and Restated Master Distribution Agreement
between Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc.
f(1) Form of Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended, March 7,
2000.
f(2) AIM Funds Retirement Plan for Eligible Directors/Trustees, as
restated March 7, 2000.
g(2)(a) Subcustodian Agreement, dated September 9, 1994, between
Registrant, Texas Commerce Bank National Association, State
Street Bank and Trust Company and A I M Fund Services, Inc.
g(2)(b) Amendment No. 1, dated October 2, 1998, to Subcustodian
Agreement between Registrant, Chase Bank of Texas, N.A.
(formerly Texas Commerce Bank), State Street Bank and trust
Company and A I M Fund Services, Inc.
|
Exhibit No. Description
----------- -----------
h(4)(b) Amendment No. 1, dated September 1, 2001, to the Master
Administrative Services Agreement between Registrant and A I M
Advisors, Inc.
h(4)(c) Form of Amendment No. 2, dated December _____, 2001, to the
Master Administrative Services Agreement between Registrant
and A I M Advisors, Inc.
h(5) Interfund Loan Agreement, dated September 18, 2001, between
Registrant and A I M Advisors, Inc.
i(1) Opinion and Consent of Ballard Spahr Andrews Ingersoll LLP.
j(1) Consent of PricewaterhouseCoopers LLP.
l Form of Agreement Concerning Initial Capitalization of
Registrant's AIM Global Biotech Fund, dated _____________.
m(1)(b) Amendment No. 1, dated September 1, 2001, to Registrants
Second Amended and Restated Master Distribution Plan on behalf
of its Class A and Class C Shares.
m(1)(c) Form of Amendment No. 2, dated December ____, 2001, to
Registrant's Second Amended and Restated Distribution Plan on
behalf of its Class A and Class B Shares.
m(2)(b) Amendment No. 1, dated September 10, 2001, to Registrant's
First Amended and Restated Distribution Plan on behalf of its
Class B Shares.
m(2)(c) Form of Amendment No. 2, dated December ___, 2001, to
Registrant's First Amended and Restated Distribution Plan on
behalf of its Class B Shares.
m(3) Form of Shareholder Service Agreement to be used in connection
with Registrant's Master Distribution Plans for Bank Trust
Departments.
m(4) Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan.
m(5) Form of Variable Group Annuity Contractholder Service
Agreement.
m(6) Form of Agency Pricing Agreement to be used in connection with
Registrant's Master Distribution Plan is filed herewith
electronically.
m(7) Form of Service Agreement for Bank Trust Departments and for
Broker to be used in connection with Registrant's Master
Distribution Plan.
m(8) Form of Shareholder Service Agreement for Shares of the Mutual
Funds is filed herewith electronically.
|
a(1)(k)
AMENDMENT NO. 10
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT FUNDS
This Amendment No. 10 to the Agreement and Declaration of Trust of AIM Investment Funds (this "Amendment") amends, effective as of September 1, 2001, the Agreement and Declaration of Trust of AIM Investment Funds, a Delaware business trust (the "Trust"), dated as of May 7, 1998, as amended (the "Agreement").
WHEREAS, Sections 2.3 and 9.7 of the Agreement empower the Trustees without Shareholder action to amend the Agreement in order to change the designations of the Portfolios and the Classes thereof; and
NOW, THEREFORE, the Trustees hereby amend the Agreement as follows:
1. Capitalized terms not specifically defined in this Amendment shall have the meanings ascribed to them in the Agreement.
2. Schedule A to the Agreement is hereby deleted in its entirety and a new Schedule A to the Agreement is substituted to read in its entirety as follows:
"SCHEDULE A
AIM Investment Funds shall be divided into the following Portfolios, each of which shall have three Classes (Class A, Class B and Class C):
AIM Developing Markets Fund
AIM Latin American Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Energy Fund
AIM Global Telecommunications and Technology Fund
AIM Strategic Income Fund
Date: September 1, 2001"
3. Except as specifically amended by this Amendment, the Agreement (including all prior amendments thereto) is hereby confirmed and remains in full force and effect.
4. All references in the Agreement to "this Agreement" shall mean the Agreement including all prior amendments thereto) as amended by this Amendment.
5. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Amendment.
IN WITNESS WHEREOF, the undersigned Trustees of the Trust have executed this Amendment as of June 12, 2001.
/s/ C. DEREK ANDERSON /s/ ROBERT H. GRAHAM --------------------------- ----------------------------- C. Derek Anderson, Trustee Robert H. Graham, Trustee /s/ FRANK S. BAYLEY /s/ RUTH H. QUIGLEY ----------------------------- ----------------------------- Frank S. Bayley, Trustee Ruth H. Quigley, Trustee |
THIS IS THE SIGNATURE PAGE FOR AMENDMENT NO. 10 TO AGREEMENT AND
DECLARATION OF TRUST OF AIM INVESTMENT FUNDS
a(1)(l)
AMENDMENT NO. 11
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT FUNDS
This Amendment No. 11 to the Agreement and Declaration of Trust of AIM Investment Funds (this "Amendment") amends, effective as of September 28, 2001, the Agreement and Declaration of Trust of AIM Investment Funds, a Delaware business trust (the "Trust"), dated as of May 7, 1998, as amended (the "Agreement").
Under Section 9.7 of the Agreement, the Amendment may be executed by a majority of the Trustees of the Trust.
NOW, THEREFORE, the Trustees hereby amend the Agreement as follows:
1. Unless defined herein, each capitalized term used in this Amendment shall have the meaning given it in the Agreement.
2. Schedule A to the Agreement is hereby deleted in its entirety and a new Schedule A to the Agreement is substituted to read in its entirety as follows:
"SCHEDULE A
AIM Investment Funds shall be divided into the following Portfolios, each of which shall have three Classes (Class A, Class B and Class C):
AIM Developing Markets Fund
AIM Global Biotech Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Energy Fund
AIM Global Telecommunications and Technology Fund
AIM Strategic Income Fund
Date: September 28, 2001"
3. Except as specifically amended by this Amendment, the Agreement is hereby confirmed and remains in full force and effect.
4. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment.
5. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Amendment.
IN WITNESS WHEREOF, the undersigned Trustees of the Trust have executed this Amendment as of September 28, 2001.
/s/ ROBERT H. GRAHAM /s/ JACK M. FIELDS ------------------------------- ------------------------------- Robert H. Graham, Trustee Jack M. Fields, Trustee /s/ FRANK S. BAYLEY /s/ CARL FRISHCHLING ------------------------------- ------------------------------- Frank S. Bayley, Trustee Carl Frischling, Trustee /s/ BRUCE L. CROCKETT /s/ PREMA MATHAI-DAVIS ------------------------------- ------------------------------- Bruce L. Crockett, Trustee Prema Mathai-Davis, Trustee /s/ OWEN DALY II /s/ LEWIS F. PENNOCK ------------------------------- ------------------------------- Owen Daly II, Trustee Lewis F. Pennock, Trustee /s/ ALBERT R. DOWDEN /s/ RUTH H. QUIGLEY ------------------------------- ------------------------------- Albert R. Dowden, Trustee Ruth H. Quigley, Trustee /s/ EDWARD K. DUNN, JR. /s/ LOUIS S. SKLAR ------------------------------- ------------------------------- Edward K. Dunn, Jr., Trustee Louis S. Sklar, Trustee |
d(1)(b)
AMENDMENT NO. 1
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of September 1, 2001, amends the Master Investment Advisory Agreement (the "Agreement"), dated September 11, 2000, between AIM Investment Funds, a Delaware business trust, and A I M Advisors, Inc., a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Agreement to add five new portfolios, the AIM Developing Markets Fund, AIM Global Energy Fund, AIM Global Health Care Fund, AIM Global Telecommunications and Technology Fund and AIM Strategic Income Fund;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT
------------ ------------------------------------
AIM Developing Markets Fund September 1, 2001
AIM Global Energy Fund September 1, 2001
AIM Global Financial Services Fund September 11, 2000
AIM Global Health Care Fund September 1, 2001
AIM Global Infrastructure Fund September 11, 2000
AIM Global Telecommunications and Technology Fund September 1, 2001
AIM Strategic Income Fund September 1, 2001
|
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full compensation for all services rendered, an advisory fee for such Fund set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Fund for the calendar year computed in the manner used for the determination of the net asset value of shares of such Fund.
AIM DEVELOPING MARKETS FUND
AIM GLOBAL ENERGY FUND
AIM GLOBAL FINANCIAL SERVICES FUND
AIM GLOBAL HEALTH CARE FUND
AIM GLOBAL INFRASTRUCTURE FUND
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $500 million.................................................. 0.975%
Next $500 million................................................... 0.95%
Next $500 million................................................... 0.925%
On amounts thereafter............................................... 0.90%
AIM STRATEGIC INCOME FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $500 million.................................................. 0.725%
Next $500 million................................................... 0.70%
Next $500 million................................................... 0.675%
On amounts thereafter............................................... 0.65%"
|
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM INVESTMENT FUNDS
Attest:: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
----------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M ADVISORS, INC.
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
d(1)c
AMENDMENT NO. 2
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of December __, 2001, amends the Master Investment Advisory Agreement (the "Agreement"), dated September 11, 2000, between AIM Investment Funds, a Delaware business trust, and A I M Advisors, Inc., a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Agreement to add one new portfolio, the AIM Global Biotech Fund;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Developing Markets Fund September 1, 2001 AIM Global Biotech Fund December __, 2001 AIM Global Energy Fund September 1, 2001 AIM Global Financial Services Fund September 11, 2000 AIM Global Health Care Fund September 1, 2001 AIM Global Infrastructure Fund September 11, 2000 AIM Global Telecommunications and Technology Fund September 1, 2001 AIM Strategic Income Fund September 1, 2001 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full compensation for all services rendered, an advisory fee for such Fund set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Fund for the calendar year computed in the manner used for the determination of the net asset value of shares of such Fund.
AIM DEVELOPING MARKETS FUND
AIM GLOBAL ENERGY FUND
AIM GLOBAL FINANCIAL SERVICES FUND
AIM GLOBAL HEALTH CARE FUND
AIM GLOBAL INFRASTRUCTURE FUND
AIM GLOBAL TELECOMMUNICATIONS AND TECHNOLOGY FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $500 million.................................................. 0.975%
Next $500 million................................................... 0.95%
Next $500 million................................................... 0.925%
On amounts thereafter............................................... 0.90%
AIM STRATEGIC INCOME FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $500 million.................................................. 0.725%
Next $500 million................................................... 0.70%
Next $500 million................................................... 0.675%
On amounts thereafter............................................... 0.65%"
AIM GLOBAL BIOTECH FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $1billion..................................................... 1.00%
On amounts thereafter............................................... 0.95%"
|
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM INVESTMENT FUNDS
Attest:: By:
------------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M ADVISORS, INC.
Attest: By:
------------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
d(2)
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
This contract is made as of the 1st day of September, 2001, between A I M Advisors, Inc., hereinafter "Adviser", 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 and INVESCO Asset Management Limited, hereinafter "Sub-Adviser", 11 Devonshire Square, London, EC2M4YR, England.
WHEREAS:
A) Adviser has entered into an investment advisory agreement with AIM Investment Funds (hereinafter "Company"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), with respect to the funds set forth in Exhibit A attached hereto (each a "Fund");
B) Sub-Adviser represents that it is licensed under the Investment Advisers Act of 1940 ("Advisers Act") as an investment adviser and engages in the business of acting as an investment adviser;
C) Adviser is authorized to delegate certain, any or all of its rights, duties and obligations under investment advisory agreements to sub-advisers, including sub-advisers that are affiliated with Adviser.
NOW THEREFORE, in consideration of the promises and the mutual covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser as Sub-Adviser of each Fund for the period and on the terms set forth in the attachments hereto. Sub-Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision of the Company's Board of Trustees ("Board") and Adviser, the Sub-Adviser will provide a continuous investment program for each Fund, including investment research and management, with respect to all or a portion of the securities and investments and cash equivalents of the Fund (the "Sub-Advised Assets"), such Sub-Advised Assets to be determined by the Adviser. The Sub-Adviser will determine from time to time what securities and other investments will be purchased, retained or sold with respect to the Sub-Advised Assets of each Fund, and the brokers and dealers through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and dealers, it will attempt to obtain the best net result in terms of price and execution. Consistent with this obligation, the Sub-Adviser may, in its discretion, purchase and sell portfolio securities from and to brokers and dealers who sell shares of the Funds or provide the Funds, Adviser's other clients, or Sub-Adviser's other clients with research, analysis, advice and similar services. The Sub-Adviser may pay to brokers and dealers, in return for such research and analysis, a higher commission or spread than may be charged by other brokers and dealers, subject to the Sub-Adviser determining in good faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of the Adviser and the Sub-Adviser to the Funds and their other clients and that the total commissions or spreads paid by each Fund will be reasonable in relation to the benefits to the Fund over the long term. In no instance will portfolio securities be purchased from or sold to the Sub-Adviser, or any affiliated person thereof, except in accordance with the applicable securities laws and the rules and regulations thereunder and any exemptive orders currently in effect. Whenever the Sub-Adviser simultaneously places orders to purchase or sell the same security on behalf of a Fund and one or more other accounts advised by the Sub-Adviser, such orders will be allocated as to price and amount among all such accounts in a manner believed to be equitable to each account.
(c) The Sub-Adviser will maintain all required books and records with respect to the securities transactions of the Funds, and will furnish the Board and Adviser with such periodic and special reports as the Board or Adviser reasonably may request. Sub-Adviser hereby agrees that all records which it maintains for the Adviser are the property of the Adviser, and agrees to preserve for the periods prescribed by applicable law any records which it maintains for the Adviser and which are required to be maintained, and further agrees to surrender promptly to the Adviser any records which it maintains for the Adviser upon request by the Adviser.
3. Further Duties. In all matters relating to the performance of this Contract, Sub-Adviser will act in conformity with the Agreement and Declaration of Trust, By-Laws and Registration Statement of the Company and with the instructions and directions of the Board and will comply with the requirements of the 1940 Act, the rules, regulations, exemptive orders and no-action positions thereunder, and all other applicable laws and regulations. Sub-Adviser shall maintain compliance procedures for the Funds that it and the Adviser reasonably believe are adequate to ensure compliance with the 1940 Act and the investment objective(s) and policies as stated in the prospectuses and statements of additional information.
4. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are not to be deemed exclusive and Sub-Adviser shall be free to furnish similar services to others so long as its services under this Contract are not impaired thereby. Nothing in this Contract shall limit or restrict the right of any director, officer or employee of Sub-Adviser, who may also be a Trustee, officer or employee of the Company, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.
5. Compensation.
(a) For the services provided to a Fund under this Contract, Adviser will pay Sub-Adviser a fee, computed daily and paid monthly, at the rate of 40% of the Adviser's compensation on the Sub-Advised Assets per year, on or before the last business day of the next succeeding calendar month.
(b) If this Contract becomes effective or terminates before the end of any month, the fee for the period from the effective date to the end of the month or from the beginning of such month to the date of termination, as the case may be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or termination occurs.
6. Fee Waivers and Expense Limitations. If, for any fiscal year of the Company, the amount of the advisory fee which the Fund would otherwise be obligated to pay to the Adviser is reduced
because of contractual or voluntary fee waivers or expense limitations by the Adviser, the fee payable hereunder to the Sub-Adviser shall be reduced proportionately; and to the extent that the Adviser reimburses the Fund as a result of such expense limitations, the Sub-Adviser shall reimburse the Adviser that proportion of such reimbursement payments which the sub-advisory fee hereunder bears to the advisory fee under the investment advisory agreement.
7. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall not be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by the Fund or the Company in connection with the matters to which this Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in the performance by Sub-Adviser of its duties or from reckless disregard by Sub-Adviser of its obligations and duties under this Contract. Any person, even though also an officer, partner, employee, or agent of Sub-Adviser, who may be or become a Trustee, officer, employee or agent of the Company, shall be deemed, when rendering services to a Fund or the Company or acting with respect to any business of a Fund or the Company to be rendering such service to or acting solely for the Fund or the Company and not as an officer, partner, employee, or agent or one under the control or direction of Sub-Adviser even though paid by it.
8. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove written, provided that this Contract shall not take effect with respect to any Fund unless it has first been approved (i) by a vote of a majority of the independent Trustees who are not parties to this Contract or "interested persons" (as defined in the 1940 Act) of a party to this Contract, other than as Board members ("Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval, and (ii) by vote of a majority of that Fund's outstanding voting securities, when required by the 1940 Act.
(b) Unless sooner terminated as provided herein, this Contract shall continue in force and effect until June 30, 2003. Thereafter, if not terminated, with respect to each Fund, this Contract shall continue automatically for successive periods not to exceed twelve months each, provided that such continuance is specifically approved at least annually (i) by a vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by the Board or by vote of a majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract may be terminated at any time, without the payment of any penalty, (i) by vote of the Board or by a vote of a majority of the outstanding voting securities of the Fund on sixty days' written notice to Sub-Adviser; or (ii) by the Adviser on sixty days' written notice to Sub-Adviser; or (iii) by the Sub-Adviser on sixty days' written notice to the Company. Termination of this Contract with respect to one Fund shall not affect the continued effectiveness of this Contract with respect to any other Fund. This Contract will automatically terminate in the event of its assignment.
9. Amendment. No provision of this Contract may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and, when required by the 1940 Act, no amendment of this Contract shall be effective until approved by vote of a majority of the Fund's outstanding voting securities.
10. Notices. Any notices under this Contract shall be writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Company and that of the Adviser shall be 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. Until further notice to the other party, it is agreed that the address of the Sub-Advisor shall be 11 Devonshire Square, London, EC2M4YR, England.
11. Governing Law. This Contract shall be construed in accordance with the laws of the State of Texas and the 1940 Act. To the extent that the applicable laws of the State of Texas conflict with the applicable provisions of the 1940 Act, the latter shall control.
12. Miscellaneous. The captions in this Contract are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Contract shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Contract shall not be affected thereby. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. Any question of interpretation of any term or provision of this Contract having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Contract is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their officers designated as of the day and year first above written.
A I M ADVISORS INC. INVESCO ASSET MANAGEMENT LIMITED
By: /s/ ROBERT H. GRAHAM By:
----------------------------------- ------------------------------
Name: Robert H. Graham Name: --ILLEGIBLE DIRECTOR--
-------------------------------- ------------------------------
Its: President Its: Director
-------------------------------- ------------------------------
|
APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF SUB-ADVISORY AGREEMENT
------------ ----------------------------------------
AIM Euroland Growth Fund September 1, 2001
|
e(1)b
AMENDMENT NO. 1
TO THE FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(APPLICABLE TO CLASS A AND CLASS C SHARES)
The First Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000, by and between AIM Investment Funds, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Appendix A to the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT FUNDS
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 10, 2001
AIM INVESTMENT FUNDS
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
A I M DISTRIBUTORS, INC.
Attest: /s/ OFELIA M. MAYO By: /s/ MICHAEL J. CEMO
------------------------------- -----------------------------
Assistant Secretary Michael J. Cemo
President
|
e(l)c
AMENDMENT NO. 2
TO THE FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(APPLICABLE TO CLASS A AND CLASS C SHARES)
The First Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000, by and between AIM Investment Funds, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Appendix A to the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT FUNDS
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December ____, 2001
AIM INVESTMENT FUNDS
Attest: By:
------------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
|
A I M DISTRIBUTORS, INC.
Attest: By:
------------------------------- -----------------------------
Assistant Secretary Michael J. Cemo
President
|
e(2)b
AMENDMENT NO. 1
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
The First Amended and Restated Master Distribution Agreement (the "Agreement"), dated December 31, 2000, by and between AIM Investment Funds, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Schedule A to the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT FUNDS
AIM Developing Markets Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Energy Fund
AIM Global Telecommunications and Technology Fund
AIM Strategic Income Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 10, 2001
AIM INVESTMENT FUNDS
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------------ ----------------------------------
Assistant Secretary Robert H. Graham
President
A I M DISTRIBUTORS, INC.
Attest: /s/ OFELIA M. MAYO By: /s/ MICHAEL J. CEMO
---------------------------- ----------------------------------
Assistant Secretary Michael J. Cemo
President
|
e(2)c
AMENDMENT NO. 2
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
The First Amended and Restated Master Distribution Agreement (the "Agreement"), dated December 31, 2000, by and between AIM Investment Funds, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Schedule A to the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT FUNDS
AIM Developing Markets Fund
AIM Global Biotech Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Energy Fund
AIM Global Telecommunications and Technology Fund
AIM Strategic Income Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December __, 2001
AIM INVESTMENT FUNDS
Attest: By:
---------------------------- ----------------------------------
Assistant Secretary Robert H. Graham
President
|
A I M DISTRIBUTORS, INC.
Attest: By:
---------------------------- ----------------------------------
Assistant Secretary Michael J. Cemo
President
|
EXHIBIT f(1)
AIM FUNDS
DIRECTOR DEFERRED COMPENSATION AGREEMENT
As Amended March 7, 200O
AIM FUNDS
AGREEMENT, made on this ____ day of _______, 20___, by and between the registered open-end investment companies listed on Appendix A hereto (the "Funds"), and _______________________________________________ (the "Director") residing at ____________________________________________.
WHEREAS, the Funds and the Director have entered into agreements pursuant to which the Director will serve as a director/trustee of the Funds; and
WHEREAS, if the Funds and the Director have previously entered into an additional agreement whereby the Funds will provide to the Director a vehicle under which the Director can defer receipt of directors' fees payable by the Funds, they now desire to amend and restate such agreement.
NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, the Funds and the Director hereby agree as follows:
1.1 Definitions. Unless a different meaning is plainly implied by the context, the following terms as used in this Agreement shall have the following meanings:
(a) "Beneficiary" shall mean such person or persons designated pursuant to Section 4.3 hereof to receive benefits after the death of the Director.
(b) "Boards of Directors" shall mean the respective Boards of Directors of the Funds.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(d) "Compensation" shall mean the amount of directors' fees paid by each of the Funds to the Director during a Deferral Year prior to reduction for Compensation Deferrals made under this Agreement.
(e) "Compensation Deferral" shall mean the amount or amounts of the Director's Compensation deferred under the provisions of Section 3 of this Agreement.
(f) "Deferral Accounts" shall mean the accounts maintained to reflect the Director's Compensation Deferrals made pursuant to Section 3 hereof (or pursuant to any prior agreement) and any other credits or debits thereto.
(g) "Deferral Year" shall mean each calendar year during which the Director makes, or is entitled to make, Compensation Deferrals under Section 3 hereof.
(h) "Retirement" shall have the same meaning as set forth under the Retirement Plan.
(i) "Retirement Plan" shall mean the "AIM Funds Retirement Plan for Eligible Directors/Trustees."
(j) "Valuation Date" shall mean the last business day of each calendar year and any other day upon which the Funds makes valuations of the Deferral Accounts.
1.2 Plurals and Gender. Where appearing in this Agreement the singular shall include the plural and the masculine shall include the feminine, and vice versa, unless the context clearly indicates a different meaning.
1.3 Directors and Trustees. Where appearing in this Agreement, "Director" shall also refer to "Trustee" and "Board of Directors" shall also refer to "Board of Trustees."
1.4 Headings. The headings and sub-headings in this Agreement are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.
1.5 Separate Agreement for Each Fund. This Agreement is drafted, and shall be construed, as a separate agreement between the Director and each of the Funds.
2.1 Commencement of Compensation Deferrals. The Director may elect, on a form provided by, and submitted to, the Presidents of the respective Funds, to commence Compensation Deferrals under Section 3 hereof for the period beginning on the later of (i) the date this Agreement is executed or (ii) the date such form is submitted to the Presidents of the Funds.
2.2 Termination of Deferrals. The Director shall not be eligible to make Compensation Deferrals after the earliest of the following dates:
(a) The date on which he ceases to serve as a Director of all of the Funds; or
(b) The effective date of the termination of this Agreement.
(a) On or prior to the first day of any Deferral Year, the Director may elect, on the form described in Section 2.1 hereof, to defer the receipt of all or a portion of his Compensation for such Deferral Year. Such writing shall set forth the amount of such Compensation Deferral (in whole percentage amounts). Such election shall continue in effect for all subsequent Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each payment of Compensation by the Funds to the Director based upon the percentage amount elected by the Director under Section 3.1 (a) hereof.
(c) The Director may cancel or modify the amount of his Compensation Deferrals on a prospective basis by submitting to the Presidents of the Funds a revised Compensation Deferral election form. Such change will be effective as of the first day of the Deferral Year following the date such revision is submitted to the Presidents of the Funds.
(a) Each Fund shall establish a bookkeeping Deferral Account to which will be credited an amount equal to the Director's Compensation Deferrals under this Agreement made with respect to Compensation earned from each such Fund. Compensation Deferrals shall be allocated to the Deferral Accounts on the first business day following the date such Compensation Deferrals are withheld from the Director's Compensation. As of the date of this Agreement, the Deferral Accounts also shall be credited with the amounts credited to the Director under each other outstanding elective deferred compensation agreement entered into by and between the Funds and the Director which is superseded by this Agreement pursuant to Section 6.11 hereof. The Deferral Accounts shall be debited to reflect any distributions from such Accounts. Such debits shall be allocated to the Deferral Accounts as of the date such distributions are made.
(b) As of each Valuation Date, income, gain and loss equivalents (determined as if the Deferral Accounts are invested in the manner set forth under Section 3.3, below) attributable to the period following the next preceding Valuation Date shall be credited to and/or deducted from the Director's Deferral Accounts.
(a) (1) The Director may select, from various options made available by the Funds, the investment media in which all or part of his Deferral Accounts shall be deemed to be invested.
(2) The Director shall make an investment designation on a form provided by the Presidents of the Funds which shall remain effective until another valid direction has been made by the Director as herein provided. The Director may amend his investment designation by giving written direction to the Presidents of the Funds in such manner and at such time as the Funds may permit, but no less frequently than quarterly on thirty (30) days' notice prior to the end of a calendar quarter. A timely change to a Director's investment designation shall become effective as soon as practicable following receipt by the Presidents of the Funds.
(3) The investment media deemed to be made available to the Director, and any limitation on the maximum or minimum percentages of the Director's Deferral Accounts that may be invested any particular medium, shall be the same as from time-to-time communicated to the Director by the Presidents of the Funds.
(b) Except as provided below, the Director's Deferral Accounts shall be deemed to be invested in accordance with his investment designations, provided such designations conform to the provisions of this Section. If-
(1) the Director does not furnish the Presidents of the Funds with complete, written investment instructions, or
(2) the written investment instructions from the Director are unclear, then the Director's election to make Compensation Deferrals hereunder shall be held in abeyance and have no force or effect until such time as the Director shall provide the Presidents of the Funds with complete investment instructions. Notwithstanding the above, the Boards of Directors, in their sole discretion, may disregard the Director's election and determine that all Compensation Deferrals shall be deemed to be invested in a fund determined by the Boards of Directors. In the event that any fund under which any portion of the Director's Deferral Accounts is deemed to be invested ceases to exist, such portion of the Deferral Accounts thereafter shall be held in the successor to such fund, subject to subsequent deemed investment elections.
The Funds shall provide an annual statement to the Director showing such information as is appropriate, including the aggregate amount in the Deferral Accounts, as of a reasonably current date.
(a) Designation of Date. Each deferral direction given pursuant to
Section 3.1 shall include designation of the Payment Date for the value of the
amount deferred. Such Payment Date shall be the first day of any calendar
quarter, subject to the limitation set forth in paragraph 4.1(c).
(b) Extension Date. At least one year before the Payment Date initially designated pursuant to paragraph 4.1(a) above, the Participant may irrevocably elect to extend such Payment Date to the first day of any calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(c) Limitation. The Director shall select a Payment Date (or extended Payment Date) that is no sooner than the earlier of (i) the January 1 that follows the second anniversary of the Participant's deferral election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the year after the Participant's Retirement.
(d) Methods of Payment. Distributions from the Director's Deferral Accounts shall be paid in cash in a single sum unless the Participant elects, at the time a Payment Date is selected pursuant to paragraph 4.1(a) or 4.1(b), to receive the amount payable in generally equal quarterly installments over a period not to exceed ten (10) years. In addition, at least one year before the Payment Date, a Director may change the method of payment previously selected.
(e) Irrevocability. Except as provided in paragraphs 4.1(b) and 4.1(d), a designation of a Payment Date and an election of installment payments shall be irrevocable; provided, however, that payment shall be made or begin on a different date as follows:
(1) Upon the Director's death, payment shall be made in accordance with Section 4.2,
(2) Upon the Director's ceasing to serve as a director of all of the Funds for reasons other than death or Retirement, payment shall be made or begin within three months after the end of the calendar year in which such termination occurs in accordance with the method elected by the Director pursuant to paragraph 4.1(d) provided the designation of such method had been made at least one year before such termination occurred, except that the Boards of Directors, in their sole discretion, may accelerate the distribution of such Deferral Accounts,
(3) Upon termination of this Agreement, payment shall be made in accordance with Section 5.2, and
(4) In the event of the liquidation, dissolution or winding up of a Fund or the distribution of all or substantially all of a Fund's assets and property relating to one or more series of its shares to the shareholders of such series (for this purpose a sale, conveyance or transfer of a Fund's assets to a trust, partnership, association or corporation in exchange for cash, shares or other securities with the transfer being made subject to, or with the assumption by the transferee of, the liabilities of the Fund shall not be deemed a termination of the Fund or such a distribution), all unpaid balances of the Deferral Accounts related to such Fund as of the effective date thereof shall be paid in a lump sum on such effective date.
4.2 Death Prior to Complete Distribution of Deferral Accounts. Upon the death of the Director prior to the commencement of the distribution of the amounts credited to his Deferral Accounts, the balance of such Accounts shall be distributed to his Beneficiary in accordance with the method of payment selected pursuant to paragraph 4.1(d), commencing as soon as practicable after the Director's death. In the event of the death of the Director after the commencement of such distribution, but prior to the complete distribution of his Deferral Accounts, the balance of the amounts credited to his Deferral Accounts shall be distributed to his Beneficiary over the remaining period during which such amounts were distributable to the Director under Section 4.1 hereof. Notwithstanding the above, the Boards of Directors, in their sole discretion, may accelerate the distribution of the Deferral Accounts.
4.3 Designation of Beneficiary. For purposes of Section 4.2 hereof, the
Director's Beneficiary shall be the person or persons so designated by the
Director in a written instrument submitted to the Presidents of the Funds. In
the event the Director fails to properly designate a Beneficiary, his
Beneficiary shall be the person or persons in the first of the following classes
of successive preference Beneficiaries surviving at the death of the Director:
the Director's (1) surviving spouse or (2) estate.
4.4 Payments Due Missing Persons. The Funds shall make a reasonable effort to locate all persons entitled to benefits under this Agreement. However, notwithstanding any provisions of this Agreement to the contrary, if, after a period of five (5) years from the date such
benefit shall be due, any such persons entitled to benefits have not been located, their rights under this Agreement shall stand suspended. Before this provision becomes operative, the Funds shall send a certified letter to all such persons to their last known address advising them that their benefits under this Agreement shall be suspended. Any such suspended amounts shall be held by the Funds for a period of three (3) additional years (or a total of eight (8) years from the time the benefits first become payable) and thereafter, if unclaimed, such amounts shall be forfeited.
(a) The Funds and the Director may, by a written instrument signed by, or on behalf of, such parties, amend this Agreement at any time and in any manner.
(b) The Funds reserve the right to amend, in whole or in part, and in any manner, any or all of the provisions of this Agreement by action of their Boards of Directors for the purposes of complying with any provision of the Code or any other technical or legal requirements, provided that:
(1) No such amendment shall make it possible for any part of the Director's Deferral Accounts to be used for, or diverted to, purposes other than for the exclusive benefit of the Director or his Beneficiaries, except to the extent otherwise provided in this Agreement; and
(2) No such amendment may reduce the amount of the Director's Deferral Accounts as of the effective date of such amendment.
5.2 Termination. The Director and the Funds may, by written instrument signed by, or on behalf of, such parties, terminate this Agreement at any time. In the event of the termination of this Agreement, the Boards of Directors, in their sole discretion, may choose to pay out the Director's Deferral Accounts prior to the designated Payment Dates. Otherwise, following a termination of this Agreement, such Accounts shall continue to be maintained in accordance with the provisions of this Agreement until the time they are paid out.
(a) This Agreement is unfunded. Neither the Director nor any other persons shall have any interest in any specific asset or assets of the Funds by reason of any Deferral Accounts hereunder, nor any rights to receive distribution of his Deferral Accounts except and as to the extent expressly provided hereunder. The Funds shall not be required to purchase, hold or dispose of any investments pursuant to this Agreement; however, if in order to cover their obligations hereunder the Funds elect to purchase any investments the same shall continue for all purposes to be a part of the general assets and property of the Funds, subject to the claims of their general creditors and no person other than the Funds shall by virtue of the provisions of this Agreement have any interest in such assets other than an interest as a general creditor.
(b) The rights of the Director and the Beneficiaries to the amounts held in the Deferral Accounts are unsecured and shall be subject to the creditors of the Funds. With respect to the payment of amounts held under the Deferral Accounts, the Director and his Beneficiaries have the status of unsecured creditors of the Funds. This Agreement is executed on behalf of the Funds by an officer, or other representative, of the Funds as such and not individually. Any obligation of the Funds hereunder shall be an unsecured obligation of the Funds and not of any other person.
6.2 Agents. The Funds may employ agents and provide for such clerical, legal, actuarial, accounting, advisory or other services as it deems necessary to perform their duties under this Agreement. The Funds shall bear the cost of such services and all other expenses they incur in connection with the administration of this Agreement.
6.3 Liability and Indemnification. Except for their own gross negligence, willful misconduct or willful breach of the terms of this Agreement, the Funds shall be indemnified and held harmless by the Director against liability or losses occurring by reason of any act or omission of the Funds or any other person.
6.4 Incapacity. If the Funds shall receive evidence satisfactory to them that the Director or any Beneficiary entitled to receive any benefit under the Agreement is, at the time when such benefit becomes payable, a minor, or is physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of the Director or Beneficiary and that no guardian, committee or other representative of the estate of the Director or Beneficiary shall have been duly appointed, the Funds may make payment of such benefit otherwise payable to the Director or Beneficiary to such other person or institution, including a custodian under a Uniform Gifts to Minors Act, or corresponding legislation (who shall be an adult, a guardian of the minor or a trust company), and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the State of Texas and all matters concerning its validity, construction and administration shall be governed by the laws of the State of Texas.
6.7 Nonguarantee of Directorship. Nothing contained in this Agreement shall be construed as a contract or guarantee of the right of the Director to be, or remain as, a director of any of the Funds or to receive any, or any particular rate of, Compensation from any of the Funds.
6.8 Counsel. The Funds may consult with legal counsel with respect to the meaning or construction of this Agreement, their obligations or duties hereunder or with respect to any action or proceeding or any question of law, and they shall be fully protected with respect to any action taken or omitted by them in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Director's and Beneficiaries' interests in the Deferral Accounts may not be anticipated, sold, encumbered, pledged, mortgaged, charged, transferred, alienated, assigned nor become subject to execution, garnishment or attachment and any attempt to do so by any person shall render the Deferral Accounts immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or mailed by United States registered or certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight delivery service providing for a signed return receipt, addressed to the Director at the home address set forth in the Funds' records and to the Funds at the address set forth on the first page of this Agreement, provided that all notices to the Funds shall be directed to the attention of the Presidents of the Funds or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
6.11 Entire Agreement. This Agreement contains the entire understanding between the Funds and the Director with respect to the payment of non-qualified elective deferred compensation by the Fund to the Director. Effective as of the date hereof, this Agreement replaces, and supersedes, all other non-qualified elective deferred compensation agreements by and between the Director and the Funds.
6.12 Interpretation of Agreement. Interpretations of, and determinations (including factual determinations) related to, this Agreement made by the Funds in good faith, including any determinations of the amounts of the Deferral Accounts, shall be conclusive and binding upon all parties; and the Funds shall not incur any liability to the Director for any such interpretation or determination so made or for any other action taken by it in connection with this Agreement in good faith.
6.13 Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the Funds and their successors and assigns and to the Director and his heirs, executors, administrators and personal representatives.
6.14 Severability. In the event any one or more provisions of this Agreement are held to be invalid or unenforceable, such illegality or unenforceability shall not affect the validity or enforceability of the other provisions hereof and such other provisions shall remain in full force and effect unaffected by such invalidity or unenforceability.
6.15 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
The Funds
By:
---------------------------- --------------------------------------
Witness Name:
Title:
----------------------------
Witness
-----------------------------------------
Director
|
For the purposes of the Deferred Compensation Agreement "AIM Funds" shall mean each of the regulated investment companies constituting classes or series of shares of the following entities:
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM STRATEGIC INCOME FUND, INC.
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the "Agreement") dated as of______________________________ by and between the undersigned and the AIM Funds, I hereby make the following elections:
Starting with Compensation to be paid to me with respect to services provided by me to the AIM Funds after the date this election Form is received by the AIM Funds, I hereby elect that ______ percent (__%) of my Compensation (as defined under the Agreement) be reduced and that the Fund establish a bookkeeping account credited with amounts equal to the amount so reduced (the "Deferral Account"). The Deferral Account shall be further credited with income equivalents as provided under the Agreement. I understand that this election will remain in effect with respect to Compensation I earn in subsequent years unless I modify or revoke it. I further understand that such modification or revocation will be effective only prospectively and will apply commencing with the Compensation I earn in the calendar year that begins after the change is received by you.
I hereby designate _____________1 (select the first month in any calendar quarter) in the year ____________ (select a year that is at least two years after the year this election is made) as the Payment Date for the amounts credited to my Deferral Account pursuant to the election made above. If my Retirement (as defined in the Agreement) occurs sooner, I [_] do [_] do not (check the appropriate box) want payment of such amounts to commence effective the January 1 following my Retirement. I understand that amounts credited to my Deferral Account may be paid to me prior to the Payment Date as provided in the Agreement.
I hereby elect to receive the amounts credited to my Deferral Account in (check one)
[_] a single payment in cash
[_] annual installments for a period of _________ (select no more than 10 years)
beginning within 30 days following the payment date selected above.
I understand that the amounts credited to my Deferral Account shall remain the general assets of the AIM Funds and that, with respect to the payment of such amounts, I am merely a general creditor of the AIM Funds. I may not sell, encumber, pledge, assign or otherwise alienate the amounts credited to my Deferral Account.
I hereby agree that the terms of the Agreement are incorporated herein and are made a part hereof Dated as of the day and year first above written.
WITNESS: DIRECTOR:
----------------------------- ---------------------------------
WITNESS: RECEIVED:
AIM Funds
-----------------------------
By:
-----------------------
Date:
-----------------------
|
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the "Agreement") by and between the undersigned and the AIM Funds, I hereby elect that my Deferral Account under the Agreement be considered to be invested as follows (in multiples of 10%):
NAME OF FUND %
------------ ---
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
|
I acknowledge that I may amend this Investment Agreement in the manner, and at such time, as permitted under the Agreement. Furthermore, I acknowledge that, pursuant to Section 3.3(b) of the Agreement, the Fund has reserved the right to disregard the elections made above to consider my Deferral Account to be deemed to be invested in a fund of its choosing.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
|
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the "Agreement") by and between the undersigned and the AIM Funds, I hereby make the following beneficiary designations:
I hereby appoint the following as my Primary Beneficiary(ies) to receive at my death the amounts credited to my Deferral Account under the Agreement. In the event I am survived by more than one Primary Beneficiary, such Primary Beneficiaries shall share equally in such amounts unless I indicate otherwise on an attachment to this form:
--------------------------------------------------------------------- Name Relationship --------------------------------------------------------------------- Address --------------------------------------------------------------------- City State Zip |
In the event I am not survived by any Primary Beneficiary, I hereby appoint the following as Secondary Beneficiary(ies) to receive death benefits under the Agreement. In the event I am survived by more than one Secondary Beneficiary, such Secondary Beneficiaries shall share equally unless I indicate otherwise on an attachment to this form:
--------------------------------------------------------------------- Name Relationship --------------------------------------------------------------------- Address --------------------------------------------------------------------- City State Zip |
I understand that I may revoke or amend the above designations at any time. I further understand that if I am not survived by a Primary or Secondary Beneficiary, my Beneficiary shall be as set forth under the Agreement.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
|
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the "Agreement") by and between the undersigned and the AIM Funds, pursuant to which I have previously elected to defer Compensation,
I hereby designate _________1 (select the first month in any calendar quarter) in the year _________ (select a year that is at least two years after the year this election is made) as the Payment Date for the amounts previously credited to my Deferral Account and amounts subsequently credited thereto. If my Retirement (as defined in the Agreement) occurs sooner, I [_] do [_] do not (check the appropriate box) want payment of such amounts to commence effective the January 1 following my Retirement. I understand that amounts credited to my Deferral Account may be paid to me prior to the Payment Date as provided in the Agreement.
I hereby elect to receive the amounts credited to my Deferral Account in (check one)
[_] a single payment in cash
[_] annual installments for a period of ________ (select no more than 10 years)
I understand that this change in payment method will not be given effect unless my Payment Date is at least one year from the date hereof and I do not cease to be a Director within such year.
I understand that I may amend this designation in the manner, and at such time, as permitted under the Agreement.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
|
EXHIBIT f(2)
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
Effective as of March 8, 1994
As Restated September 18, 1995
As Restated March 7, 2000
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
TABLE OF CONTENTS
Page
----
ARTICLE I................................................................. 1
1.1 Definitions...................................................... 1
1.2 Plurals and Gender............................................... 3
1.3 Directors/Trustees............................................... 3
1.4 Headings......................................................... 3
1.5 Severability..................................................... 3
ARTICLE II................................................................ 3
2.1 Commencement of Participation.................................... 3
2.2 Termination of Participation..................................... 3
2.3 Resumption of Participation...................................... 4
2.4 Determination of Eligibility..................................... 4
ARTICLE III............................................................... 4
3.1 Retirement....................................................... 4
3.2 Retirement Benefit............................................... 4
3.3 Termination of Service Before Retirement......................... 4
3.4 Termination of Service by Reason of Death........................ 5
3.5 Benefits Calculated in the Aggregate for all of the AIM Funds.... 5
ARTICLE IV................................................................ 5
4.1 Death Prior to Commencement of Benefits.......................... 5
4.2 Death Subsequent to Commencement of Benefits..................... 5
4.3 Death of Spouse.................................................. 5
ARTICLE V................................................................. 6
5.1 Suspension of Benefits Upon Resumption of Service................ 6
5.2 Payments Due Missing Persons..................................... 6
|
ARTICLE VI................................................................ 6
6.1 Appointment of Administrator..................................... 6
6.2 Powers and Duties of Administrator............................... 6
6.3 Action by Administrator.......................................... 7
6.4 Participation by Administrators.................................. 7
6.5 Agents and Expenses.............................................. 8
6.6 Allocation of Duties............................................. 8
6.7 Delegation of Duties............................................. 8
6.8 Administrator's Action Conclusive................................ 8
6.9 Records and Reports.............................................. 8
6.10 Information from the AIM Funds.................................. 8
6.11 Reservation of Rights by Boards of Directors.................... 9
6.12 Liability and Indemnification................................... 9
ARTICLE VII............................................................... 9
7.1 Amendments....................................................... 9
7.2 Termination...................................................... 10
ARTICLE VIII.............................................................. 10
8.1 Rights of Creditors.............................................. 10
8.2 Liability Limited................................................ 10
8.3 Incapacity....................................................... 10
8.4 Cooperation of Parties........................................... 10
8.5 Governing Law.................................................... 11
8.6 Nonguarantee of Directorship..................................... 11
8.7 Counsel.......................................................... 11
8.8 Spendthrift Provision............................................ 11
8.9 Forfeiture for Cause............................................. 11
ARTICLE IX................................................................ 12
9.1 Notice of Denial................................................. 12
9.2 Right to Reconsideration......................................... 12
9.3 Review of Documents.............................................. 12
9.4 Decision by Administrator........................................ 12
9.5 Notice by Administrator.......................................... 12
|
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
PREAMBLE
Effective as of March 8, 1994, the regulated investment companies managed, administered and/or distributed by A I M Advisors, Inc. or its affiliates (the "AIM Funds") have adopted THE AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES (the "Plan") for the benefit of each of the directors and trustees of each of the AIM Funds who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates. As the Plan does not benefit any employees of the AIM Funds, it is not intended to be classified as an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
Unless a different meaning is plainly implied by the context, the following terms as used in this Plan shall have the following meanings:
(a) "Accrued Benefit" shall mean, as of any date prior to a Participant's Retirement date, his Retirement Benefit commencing on such Retirement date, but based upon his Compensation and Years of Service computed as of such date of determination.
(b) "Actuary" shall mean the independent actuary selected by the Administrator.
(c) "Administrator" shall mean the administrative committee provided for in Article VI.
(d) "AIM Funds" shall mean those regulated investment companies managed, administered or distributed by A I M Advisors, Inc. or its affiliates, set forth on Appendix A hereto, as such Appendix may be amended from time to time.
(e) "Board of Directors" shall mean the Board of Directors or Board of Trustees of each of the AIM Funds.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(g) "Compensation" shall mean, for any Director, the amount of the retainer paid or accrued by the AIM Funds for such Director during the twelve month period immediately
preceding the Director's Retirement, including amounts deferred under a separate agreement between the AIM Funds and the Director. The amount of such retainer Compensation shall be as determined by the Administrator.
(h) "Deferred Retirement Date" shall mean the last day of the Plan Year in which a Participant terminated Service after his Normal Retirement Date.
(i) "Director" shall mean an individual who is a director or trustee of one or more of the AIM Funds which have adopted the Plan but who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates.
(j) "Disability" shall mean the inability of the Participant to participate in meetings of the Board of Directors, either in person or by telephone, for a period of at least nine (9) months.
(k) "Effective Date" shall mean March 8, 1994.
(l) "Fund" shall mean an AIM Fund which has adopted this Plan.
(m) "Mandatory Retirement Date" shall mean the last day of the Plan Year in which a participant has reached the age of 72. Such Mandatory Retirement Date may be extended upon the majority vote of the Boards of Directors of the AIM Funds.
(n) "Normal Retirement Date" shall mean the last day of the Plan Year in which a Participant has both attained age 65 (or at least age 55 in the event of the Director's termination of Service by reason of death or Disability) and has completed at least five continuous and non-forfeited Years of Service (and thirty months of Service with one or more of the AIM Funds).
(o) "Participant" shall mean a Director who has met all of the eligibility requirements of the Plan and who is currently included in the Plan as provided in Article II hereof.
(p) "Plan" shall mean the "AIM Funds Retirement Plan for Eligible Directors/Trustees" as described herein or as hereafter amended from time to time.
(q) "Plan Year" shall mean the calendar year.
(r) "Retirement" shall mean a Director's termination of his active Service with the AIM Funds on or after his Normal Retirement Date, due to his death, Disability, or voluntary or involuntary termination of his Service.
(s) "Retirement Benefit" shall mean the benefit described under
Section 3.2 hereof.
(t) "Service" shall mean an individual's serving as a Director of one or more of the AIM Funds. Furthermore, any unbroken service provided by a Participant (i) to an AIM Fund immediately prior to its being managed or administered by AIM Advisors, Inc. (or any of
its affiliates) or (ii) to a predecessor of an AIM Fund immediately prior to its being merged into such AIM Fund, will be taken into account in determining such Participant's Years of Service, subject to all restrictions and other forfeiture provisions contained herein.
(u) "Year of Service" shall mean a twelve consecutive month period of
Service. For all purposes in this Plan, if a Participant's Service terminates
prior to his Retirement, he shall forfeit credit for all Years of Service
completed prior to such termination unless (a) he again becomes a Director and
(b) the number of Years of Service he accumulated prior to such termination
exceeded the number of years in which he did not serve as a Director.
Where appearing in the Plan, the masculine gender shall include the feminine and neuter genders, and the singular shall include the plural, and vice versa, unless the context clearly indicates a different meaning.
Where appropriate, the term "director" shall refer to "trustee", "directorship" shall refer to "trusteeship" and "Board of Directors" shall refer to "Board of Trustees."
The headings and sub-headings in this Plan are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.
In case any provision of this Plan shall be held illegal or void, such illegality or invalidity shall not affect the remaining provisions of this Plan, but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.
ARTICLE II
PARTICIPATION
Each Director shall become a Participant hereunder on the date his directorship of one or more of the AIM Funds commences.
After commencement or resumption of his participation, a Director shall remain a Participant until the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death;
(c) The date on which he otherwise incurs a termination of Service; or
(d) The effective date of the termination of the Plan.
Any Participant whose Service terminates and who thereafter again becomes a Director shall resume participation immediately upon again becoming a Director except that, as provided in Section 1.1(u) hereof, if his Service is terminated prior to his Normal Retirement Date, for all purposes of this Plan he shall forfeit credit for all Years of Service completed prior to such termination of his Service.
The Administrator shall determine the eligibility of Directors in accordance with the provisions of this Article.
ARTICLE III
BENEFITS UPON
RETIREMENT AND OTHER TERMINATION OF SERVICE
In order to receive Retirement Benefits under this Plan a Director must reach
the age of 65 (55 in the event of death or disability), the Normal Retirement
Date, as defined in Section 1.1(n) before retiring. Each Director must retire
on reaching the age of 72, the Mandatory Retirement Date, as defined in Section
1.1(m). Such Mandatory Retirement Date may be extended upon the majority vote
of the Board of Directors of the AIM Funds.
Upon Retirement a Participant shall be entitled to receive an annual benefit from the AIM Funds commencing on the first day of the calendar quarter coincident with or next following his date of Retirement, payable in quarterly installments for a period of no more than ten (10) years (or, if less, the number of his Years of Service) equal to seventy-five percent (75%) of his Compensation.
In the event that a Participant's Service terminates by reason of death, Disability or removal by the Board for cause (as defined in Section 8.9) prior to his Normal Retirement Date, he shall not be entitled to receive any benefits hereunder. If a Participant's Service terminates for any other reason and he has accumulated at least five (5) continuous and non-forfeited Years of Service, he shall be entitled to receive his Accrued Benefit determined as of such date of termination.
No benefits will be paid under this Plan with respect to a Participant after his death other than as provided in Article IV.
With respect to each Participant, the benefits payable hereunder shall be based on the aggregate Compensation paid by the AIM Funds and on the Participant's non-forfeited Years of Service. Each Fund's share of the obligation to provide such benefits shall be determined by use of accounting methods adopted by the Administrator.
ARTICLE IV
DEATH BENEFITS
In the event of a Participant's death subsequent to his Normal Retirement Date, but prior to the commencement of his Retirement Benefits under Article III hereof, the surviving spouse (if any) of such Participant shall be entitled to receive a quarterly survivor's benefit for a period of no more than ten (10) years (or, if less, the number of the Participant's Years of Service) beginning on the first day of the calendar quarter next following the date of the Participant's death equal to fifty percent (50%) of the amount of the quarterly installments of Retirement Benefits that would have been paid to the Participant under Sections 3.2 or 3.3 hereof had his Retirement occurred on his date of death.
In the event a Participant dies after the commencement of his Retirement Benefit under Article III, but prior to the cessation of the payment of such Retirement Benefits, the surviving spouse (if any) of such Participant shall be entitled to receive survivor's benefits equal to fifty percent (50%) of the amount of the annual Retirement Benefit payable to the Participant under Article III hereunder, paid at such times, and for such period, as such Retirement Benefit would have continued to have been paid to the Participant had he not died.
(a) In the event a Participant is not survived by a spouse, no benefits will be paid hereunder upon the Participant's death.
(b) If a deceased Participant's surviving spouse dies while receiving survivor's benefits hereunder, any installments not paid at the time of the surviving spouse's death shall be forfeited.
ARTICLE V
SUSPENSION OF BENEFITS, ETC.
In the case of a Participant who, at a time when he is receiving Retirement Benefits under Article III of this Plan, resumes Service with any AIM Fund, such Retirement Benefits shall be suspended until his subsequent Retirement, termination of Service or death. Subject to the Years of Service limitations of Section 3.2 hereof, in the event of his Retirement or termination of Service following such a suspension, the quarterly amount of his remaining Retirement Benefits shall thereafter be adjusted, if appropriate, to reflect any additional Years of Service completed by, or a higher rate of Compensation received by, such Participant.
The Administrator shall make a reasonable effort to locate all persons entitled to benefits (including Retirement Benefits and survivor's benefits for spouses) under the Plan; however, notwithstanding any provisions of this Plan to the contrary, if, after a period of 5 years from the date any of such benefits first become due, any such persons entitled to benefits have not been located, their rights under the Plan shall stand suspended. Before this provision becomes operative, the Administrator shall send a certified letter to all such persons (if any) at their last known address advising them that their benefits under the Plan shall be suspended. Any such suspended amounts shall be held by the AIM Funds for a period of 3 additional years (or a total of 8 years from the time the benefits first became payable) and thereafter such amounts shall be forfeited.
ARTICLE VI
ADMINISTRATOR
This Plan shall be administered by the Nominating and Compensation Committees of the Boards of Directors of the AIM Funds. The members of such committees are not "interested persons" (within the meaning of Section 2(a)(19) of the Investment Company Act of 1940) of any of the AIM Funds. The term "Administrator" as used in this Plan shall refer to the members of such committees, either individually or collectively, as appropriate.
Except as provided below, the Administrator shall have the following duties and responsibilities in connection with the administration of this Plan:
(a) To promulgate and enforce such rules, regulations and procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the administration, interpretation and application of the Plan, including questions of eligibility and of the status and rights of Participants and any other persons hereunder;
(c) To decide any dispute arising hereunder; provided, however, that no Administrator shall participate in any matter involving any questions relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Directors of the AIM Funds regarding the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments which shall be payable to any Participant or surviving spouse in accordance with the provisions of the Plan and to determine the person or persons to whom such benefits shall be paid;
(g) To make recommendations to the Boards of Directors of the AIM Funds with respect to proposed amendments to the Plan;
(h) To file all reports with government agencies, Participants and other parties as may be required by law, whether such reports are initially the obligation of the AIM Funds, or the Plan;
(i) To engage the Actuary of the Plan and to cause the liabilities of the Plan to be evaluated by the Actuary; and
(j) To have all such other powers as may be necessary to discharge its duties hereunder.
The Administrator may elect a Chairman and Secretary from among its members and may adopt rules for the conduct of its business. A majority of the members then serving shall constitute a quorum for the transacting of business. All resolutions or other action taken by the Administrator shall be by vote of a majority of those present at such meeting and entitled to vote. Resolutions may be adopted or other action taken without a meeting upon written consent signed by at least a majority of the members. All documents, instruments, orders, requests, directions, instructions and other papers shall be executed on behalf of the Administrator by either the Chairman or the Secretary of the Administrator, if any, or by any member or agent of the Administrator duly authorized to act on the Administrator's behalf.
No Administrator shall be precluded from becoming a Participant in the Plan if he would be otherwise eligible, but he shall not be entitled to vote or act upon matters or to sign any documents relating specifically to his own participation under the Plan, except when such
matters or documents relate to benefits generally. If this disqualification results in the lack of a quorum, then the Boards of Directors, by majority vote of the members of a majority of such Boards of Directors (a "Majority Vote"), shall appoint a sufficient number of temporary Administrators, who shall serve for the sole purpose of determining such a question.
The Administrator may employ agents and provide for such clerical, legal, actuarial, accounting, medical, advisory or other services as it deems necessary to perform its duties under this Plan. The cost of such services and all other expenses incurred by the Administrator in connection with the administration of the Plan shall be allocated to each Fund pursuant to the method utilized under Section 3.5 hereof with respect to costs related to benefit accruals. For purposes of the preceding sentence, if an individual serves as a Director for more than one Fund, he shall be deemed to be a separate Director for each such Fund in determining the aggregate number of Directors of the AIM Funds.
The duties, powers and responsibilities reserved to the Administrator may be allocated among its members so long as such allocation is pursuant to written procedures adopted by the Administrator, in which case no Administrator shall have any liability, with respect to any duties, powers or responsibilities not allocated to him, for the acts or omissions of any other Administrator.
The Administrator may delegate any of its duties to employees of A I M Advisors, Inc. or any of its affiliates or to any other person or firm, provided that the Administrator shall prudently choose such agents and rely in good faith on their actions.
Any action on matters within the discretion of the Administrator shall be final and conclusive.
The Administrator shall maintain adequate records of its actions and proceedings in administering this Plan and shall file all reports and take all other actions as it deems appropriate in order to comply with any federal or state law.
The AIM Funds shall promptly furnish all necessary information to the Administrator to permit it to perform its duties under this Plan. The Administrator shall be entitled to rely upon the accuracy and completeness of all information furnished to it by the AIM Funds, unless it knows or should have known that such information is erroneous.
When rights are reserved in this plan to the Boards of Directors, such rights shall be exercised only by Majority Vote of the Boards of Directors, except where the Boards of Directors, by unanimous written resolution, delegate any such rights to one or more persons or to the Administrator. Subject to the rights reserved to the Boards of Directors as set forth in this Plan, no member of the Boards of Directors shall have any duties or responsibilities under this Plan, except to the extent he shall be acting in the capacity of an Administrator.
(a) The Administrator shall perform all duties required of it under this Plan in a prudent manner. The Administrator shall not be responsible in any way for any action or omission of the AIM Funds or their employees in the performance of their duties and obligations as set forth in this Plan. The Administrator also shall not be responsible for any act or omission of any of its agents provided that such agents were prudently chosen by the Administrator and that the Administrator relied in good faith upon the action of such agents.
(b) Except for its own gross negligence, willful misconduct or willful breach of the terms of this Plan, the Administrator shall be indemnified and held harmless by the AIM Funds against any and all liability, loss, damages, cost and expense which may arise, occur by reason of, or be based upon, any matter connected with or related to this Plan or its administration (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or in settlement of any such claim).
ARTICLE VII
AMENDMENTS AND TERMINATION
The Boards of Directors reserve the right at any time and from time to time, and retroactively if deemed necessary or appropriate by them, to amend in whole or in part by Majority Vote any or all of the provisions of this Plan, provided that:
(a) No amendment shall make it possible for any part of a Participant's or former Participant's Retirement Benefit to be used for, or diverted to, purposes other than for the exclusive benefit of such Participant or surviving spouse, except to the extent otherwise provided in this Plan;
(b) No amendment may reduce any Participant's or former Participant's Retirement Benefit as of the effective date of the amendment;
Amendments may be made in the form of Board of Directors' resolutions or separate written document.
Except as provided below, the Boards of Directors reserve the right to terminate this Plan at any time by Majority Vote by giving to the Administrator notice in writing of such desire to terminate. The Plan shall terminate upon the date of receipt of such notice and the rights of all Participants to their Retirement Benefits (determined as of the date the Plan is terminated) shall become payable upon the effective date of the termination of the Plan in quarterly installments or in an actuarially equivalent lump sum as determined by the Administrator.
ARTICLE VIII
MISCELLANEOUS
(a) The Plan is unfunded. Neither the Participants nor any other persons shall have any interest in any fund or in any specific asset or assets of any of the AIM Funds by reason of any Accrued or Retirement Benefit hereunder, nor any rights to receive distribution of any Retirement Benefit except and as to the extent expressly provided hereunder.
(b) The Accrued and Retirement Benefits of each Participant are unsecured and shall be subject to the claims of the general creditors of the AIM Funds.
Neither the AIM Funds, the Administrator, nor any agents, employees, officers, directors or shareholders of any of them, nor any other person shall have any liability or responsibility with respect to this Plan, except as expressly provided herein.
If the Administrator shall receive evidence satisfactory to it that a Participant or surviving spouse entitled to receive any benefit under the Plan is, at the time when such benefit becomes payable, physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of such Participant or surviving spouse and that no guardian, committee or other representative of the estate of such Participant or surviving spouse shall have been duly appointed, the Administrator may make payment of such benefit otherwise payable to such Participant or surviving spouse to such other person or institution, and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
All parties to this Plan and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Plan or any of its provisions.
All rights under the Plan shall be governed by and construed in accordance with rules of Federal law applicable to such plans and, to the extent not preempted, by the laws of the State of Texas without regard to principles of conflicts of law. No action shall be brought by or on behalf of any Participant for or with respect to benefits due under this Plan unless the person bringing such action has timely exhausted the Plan's claim review procedure. Any such action must be commenced within three years. This three-year period shall be computed from the earlier of (a) the date a final determination denying such benefit, in whole or in part, is issued under the Plan's claim review procedure or (b) the date such individual's cause of action first accrued. Any dispute, controversy or claim arising out of or in connection with this Plan (including the applicability of this arbitration provision) and not resolved pursuant to the Plan's claim review procedure shall be determined and settled by arbitration conducted by the American Arbitration Association ("AAA") in the County and State of the Funds' principal place of business and in accordance with the then existing rules, regulations, practices and procedures of the AAA. Any award in such arbitration shall be final, conclusive and binding upon the parties to the arbitration and may be enforced by either party in any court of competent jurisdiction. Each party to the arbitration will bear its own costs and fees (including attorney's fees).
Nothing contained in this Plan shall be construed as a guaranty or right of any Participant to be continued as a Director of one or more of the AIM Funds (or of a right of a Director to any specific level of Compensation) or as a limitation of the right of the AIM Funds to remove any of its directors.
The Administrator may consult with legal counsel, who may be counsel for one or more of the Boards of Directors of the AIM Funds and for the Administrator, with respect to the meaning or construction of this Plan, its obligations or duties hereunder or with respect to any action or proceeding or any question of law, and they shall be fully protected with respect to any action taken or omitted by them in good faith pursuant to the advice of legal counsel.
A Participant's interest in his Accrued Benefit or Retirement Benefit may not be transferred, alienated, assigned nor become subject to execution, garnishment or attachment, and any attempt to do so will render benefits hereunder immediately forfeitable.
Notwithstanding any other provision of this Plan to the contrary, any benefits to which a Participant (or his surviving spouse) may otherwise be entitled hereunder will be forfeited in the event the Administrator, in its sole discretion, determines that a Participant's termination of Service is due to such Participant's willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Director.
ARTICLE IX
CLS PROCEDURE
If a Participant is denied any Retirement Benefit (or a surviving spouse is denied a survivor's benefit) under this Plan, either in total or in an amount less than the full Retirement Benefit to which he would normally be entitled, the Administrator shall advise the Participant (or surviving spouse) in writing of the amount of his Retirement Benefit (or survivor's benefit), if any, and the specific reasons for the denial. The Administrator shall also furnish the Participant (or surviving spouse) at that time with a written notice containing:
(a) A specific reference to pertinent Plan provisions.
(b) A description of any additional material or information necessary for the Participant (or surviving spouse) to perfect his claim, if possible, and an explanation of why such material or information is needed.
(c) An explanation of the Plan's claim review procedure.
Within 60 days of receipt of the information stated in Section 9.1 above, the Participant (or surviving spouse) shall, if he desires further review, file a written request for reconsideration with the Administrator.
So long as the Participant's (or surviving spouse's) request for review is pending (including the 60 day period in 9.2 above), the Participant (or surviving spouse) or his duly authorized representative may review pertinent Plan documents and may submit issues and comments in writing to the Administrator.
A final and binding decision shall be made by the Administrator within 60 days of the filing by the Participant (or surviving spouse) of his request for reconsideration, provided, however, that if the Administrator, in its discretion, feels that a hearing with the Participant (or surviving spouse) or his representative present is necessary or desirable, this period shall be extended an additional 60 days.
The Administrator's decision shall be conveyed to the Participant (or surviving spouse) in writing and shall include specific reasons for the provisions on which the decision is based.
APPENDIX A
March 7, 2000
For the purposes of the Retirement Plan for Eligible Directors/Trustees "AIM Funds" shall mean each of the regulated investment companies constituting classes or series of shares of the following entities:
AIM ADVISOR FUNDS, INC.
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM SPECIAL OPPORTUNITIES FUNDS
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
EXHIBIT g(2)(a)
SUBCUSTODIAN AGREEMENT
WITH
TEXAS COMMERCE BANK
The undersigned custodian (the "Custodian") for the funds listed on Schedule A hereto (the "Funds"), each an open-end investment company registered under the Investment Company Act of 1940 (the "1940 Act"), hereby appoints Texas Commerce Bank National Association as subcustodian (the "Subcustodian") for each of the Funds and their respective series, if any, and the Subcustodian hereby accepts such appointment on the following terms and conditions as of the date set forth below and along with A I M Fund Services, Inc. ("AFS"), transfer agent for the Funds, agree as follows:
1. Qualification. The Custodian and the Subcustodian each represent to the other and to the Funds that it is qualified to act as custodian for a registered investment company under the 1940 Act, and the Custodian represents to the Subcustodian that it is the duly appointed, qualified and acting Custodian of the Funds, with all necessary power and authority to enter into this Agreement.
2. Subcustody. The Subcustodian shall maintain custodian accounts for the Funds ("Subscription Accounts"). Checks issued in payment for purchases of the Funds' shares ("Subscription Checks") shall be deposited by AFS with the Subcustodian and AFS shall instruct Subcustodian into which Subscription Account to deposit such checks. The Subcustodian shall debit AFS account no. 100366815 (the "Bounced Check Account") for the aggregate amount of all Subscription Checks returned to the Subcustodian for non-payment ("Return Items"), informing AFS daily of any returned Subscription Checks. In the event that the available funds in the Bounced Check Account are insufficient to cover the amount of the Return Items, Subcustodian shall promptly notify Transfer Agent in writing of the amount of such insufficiency. Upon receipt of such written notice, Transfer Agent agrees to remit to Subcustodian the full amount of such insufficiency.
Each business day AFS shall provide instructions to the Subcustodian to wire transfer certain funds to Boston Safe Deposit & Trust Company and other entities that AFS may specify from time to time, which shall deposit the proceeds of such wire transfers from the Subcustodian into the Settlement Account at Boston Safe Deposit & Trust Company. The Subcustodian agrees that it will comply with the instructions of AFS so long as the instructions do not require the transfer of funds in an amount in excess of the aggregate of the ledger balances in the Subscription Accounts in question and the Subcustodian is not prohibited from making the transfer by applicable law or regulation. Boston Safe Deposit & Trust Company will net the Subscription Check proceeds with the redemption proceeds and the net amount will be wired to the Settlement Account at the Custodian. The Funds will compensate the Subcustodian for (i) service fees charged by the Subcustodian for processing Subscription Checks as set forth on Schedule 1 to this Agreement (these amounts will be paid monthly and computed based on overall account relationship), (ii) other miscellaneous fees as described in Schedule 1 and (iii) Return Items not paid by the Transfer Agent within five (5) days following a payment by Subcustodian pursuant to paragraph 2 hereof.
3. Instructions; Other Communications. Any one officer or other authorized representative of AFS designated as hereinafter provided as an officer or other authorized representative of AFS authorized to give instructions to the Subcustodian with respect to the Funds' assets held in the Subscription Accounts (an "Authorized Officer"), shall be authorized to instruct the Subcustodian as to the deposit, withdrawal or any other action with respect to the Funds' assets from time to time by telephone, or in writing signed by such Authorized Officer and delivered by telecopy, tested telex, tested computer printout or such other reasonable methods as AFS and Subcustodian shall agree upon; provided, however, the Subcustodian is authorized to accept and act upon instructions from AFS, whether orally, by telephone or otherwise, which it reasonably believes to be given by an Authorized Officer. The Subcustodian may require that any instructions given orally or by telecommunications be promptly confirmed in writing.
The Authorized Officers shall be as set forth on Schedule 2 attached hereto or as otherwise from time to time certified in writing by AFS to the Subcustodian signed by the President or any Vice President and any Assistant Vice President, Assistant Secretary or Assistant Treasurer of AFS. In addition to a written list of authorized officers, AFS will provide Subcustodian with additional information and signature cards as reasonably requested by Subcustodian relating to the Authorized Officers. The Subcustodian shall furnish to AFS (i) prompt telephonic and written notice of Return Items, (ii) monthly reports on activity in each of the Subscription Accounts mailed within five (5) days after the end of each calendar month and (iii) a daily statement of activity in each of the Subscription Accounts, which will be made available via the MicroLink balance reporting service. AFS will furnish a copy of the information provided by Subcustodian to (i) each Fund, and (ii) the Custodian (as to the Custodian, only items (ii) and (iii) above are required).
4. Fees. The service fees charged by the Subcustodian under the Agreement are as set forth in Schedule 1 attached hereto. Schedule 1 may be amended by the parties in writing provided written notice is furnished to the Funds thirty (30) days in advance of any increase in fees.
5. Liabilities. (i) The Subcustodian shall be indemnified and held harmless by AFS and the Funds and not be liable for any action taken or omitted to be taken by it in good faith or for any mistake of law or fact, or for anything Subcustodian may do or refrain from doing in connection with or as required by this Agreement, except for failure to exercise ordinary care or act in good faith. Except as otherwise set forth herein, the Subcustodian shall have no responsibility with respect to Fund assets. The Subcustodian shall, for the benefit of the Custodian, AFS and the Funds, use the same care with respect to the handling of the Funds' assets in the Subscription Accounts as it uses with respect to its own assets similarly held. The Subcustodian shall have no responsibility with respect to any monies or any wire transfer, checks or other instruments for the payment of money unless and until actually received or secured by wire transfer by the Subcustodian. IN NO EVENT WILL THE SUBCUSTODIAN BE LIABLE TO THE CUSTODIAN, AFS OR THE FUNDS FOR ANY INDIRECT DAMAGES, LOST PROFITS, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES WHICH ARISE OUT OF OR IN CONNECTION WITH THE SERVICES CONTEMPLATED HEREIN.
(ii) The Subcustodian shall indemnify, defend and save harmless the Custodian, AFS and each Fund from and against all loss, liability, claims and demands incurred by the Custodian, AFS or the Funds and any related out-of-pocket expenses, arising directly from the Subcustodian's bad
faith, willful malfeasance or negligence in connection with its obligations under this Agreement and the Investment Company Act of 1940, as amended.
(iii) The Custodian agrees to indemnify and hold the Subcustodian harmless from and against any and all loss, liability, claims and demands incurred by Subcustodian in connection with the performance by the Subcustodian in good faith of any activity under this Agreement pursuant to instructions of the Custodian.
(iv) It is understood and stipulated that neither the shareholders of any Fund nor the members of the Board of such Fund shall be personally liable hereunder.
6. Termination. Each party may terminate this Agreement at any time by not less than thirty (30) days prior written notice which shall specify the date of such termination; provided, however, that the Custodian may immediately terminate this Agreement in the event of the appointment of a conservator or receiver for the Subcustodian by the Federal Deposit Insurance Corporation or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Upon termination of this Agreement, the Subcustodian shall promptly make delivery of all assets of the Funds held in the Subscription Accounts to the Custodian or any third party, qualified to act as a custodian pursuant to the rules and regulations of the Investment Company Act of 1940, as amended, specified by the Custodian in writing. If any Subscription Checks are subsequently returned unpaid, the Funds shall direct AFS to pay the Subcustodian the amount thereof on behalf of the Funds promptly upon demand. All indemnities provided pursuant to this Agreement shall survive the termination of this Agreement.
7. Communications. All communications required or permitted to be given under this Agreement shall be in writing (including telex, telegraph or telefax, facsimile or similar electronic transmittal device) and shall be deemed given (a) upon delivery in person to the persons indicated below, or (b) three days after deposit in the United States postal service, postage prepaid, registered or certified mail, return receipt requested, or (c) upon receipt by facsimile (provided that receipt of such facsimile is confirmed telephonically by the addressee) or (d) by overnight delivery service (with receipt of delivery) sent to the address shown below, or to such different address(es) as such party shall designate by written notice to the other parties hereto at least ten days in advance of the date on which such change of address shall be effective. All communications required or permitted to be given under this Agreement shall be addressed as follows:
(i) to the Subcustodian: Texas Commerce Bank National Association
P.O. Box 2558 Houston, Texas 77252-8084 Attn: Kathy Wallace
(ii) to the Custodian: State Street Bank and Trust Company Mutual Fund Services Boston, Massachusetts 02105 Attn: AIM Funds
(iii) to the Transfer Agent: A I M Fund Services, Inc. 11 Greenway Plaza Suite 1919 Houston, Texas 77046 Attn: Robert Frazer
8. Records. The books and records pertaining to the Subscription Accounts which are in the possession of the Subcustodian shall be preserved by the Subcustodian for six years, the first two years of which the books and records shall be maintained by the Subcustodian in an easily accessible place. The Subcustodian will not refuse any reasonable request for inspection and audit of its books and records concerning transactions and balances of the Subscription Accounts by an agent of any Fund, AFS or the Custodian.
9. Cooperation. The Subcustodian shall cooperate with each Fund and the Custodian and their respective independent public accountants in connection with annual and other audits of the books and records of the Custodian or the Funds and shall take all reasonable actions to assure that such information is made available to such accountants for the expression of their opinion.
10. Terms and Conditions of Deposit Accounts. The handling of the Subscription Accounts and the Bounced Check Account and all other accounts maintained with the Subcustodian in connection with or relating to this Agreement will be subject to the Subcustodian's Terms and Conditions of Deposit Accounts, and any and all rules or regulations now or hereafter promulgated by the Subcustodian which relate to such accounts, and the Uniform Commercial Code as adopted in the State of Texas (except in the event any of the same are contrary to the specific provisions hereof). In the event of any specific conflict between the provisions hereof and the provisions of any of the foregoing, the provisions of this Agreement shall control.
11. Miscellaneous. This Agreement shall be (i) governed by and construed in accordance with the laws of the State of Texas without regard to conflicts of law rules, (ii) may be executed in counterparts each of which shall be deemed an original but all of which shall constitute the same instrument, and (iii) may only be amended by the parties hereto in writing.
12. Signature Authority. Each of the undersigned represents and warrants that he/she has the requisite authority to execute this Agreement on behalf of the party for whom the undersigned signs; that all necessary action has been taken to authorize this Agreement; that this Agreement, upon execution and delivery, shall be a binding obligation of such party.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed this 9th day of September, 1994.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
(as Subcustodian)
By: /s/ KATHY WALLACE
----------------------------------
Title: Financial Services Officer
-------------------------------
|
STATE STREET BANK AND TRUST COMPANY
(as Custodian)
By: /s/ N. GRADY
----------------------------------
Title: Vice President
-------------------------------
|
A I M FUND SERVICES, INC.
(as Transfer Agent)
By: /s/ Illegible
----------------------------------
Title: Senior Vice President
-------------------------------
|
Each of the Funds hereby consents and agrees to the terms of the foregoing Subcustodian Agreement; provided, however, that the same shall not relieve the Custodian of any of its responsibilities to the Fund as set forth in the Custodian Agreements between the Funds and the Custodian.
EACH OF THE FUNDS LISTED ON
SCHEDULE A HERETO
By: /s/ Illegible
----------------------------------
Title: Senior Vice President &
Treasurer
------------------------------
|
SCHEDULE A
(as revised February 15, 2001)
AIM Advisor Funds -- AIM Advisor Flex Fund AIM Advisor Funds -- AIM Advisor International Value Fund AIM Advisor Funds -- AIM Advisor Real Estate Fund
AIM Equity Funds -- AIM Aggressive Growth Fund
AIM Equity Funds -- AIM Blue Chip Fund
AIM Equity Funds -- AIM Capital Development Fund
AIM Equity Funds -- AIM Charter Fund
AIM Equity Funds -- AIM Constellation Fund
AIM Equity Funds -- AIM Dent Demographic Trends Fund
AIM Equity Funds -- AIM Emerging Growth Fund
AIM Equity Funds -- AIM Large Cap Basic Value Fund
AIM Equity Funds -- AIM Large Cap Growth Fund
AIM Equity Funds -- AIM Mid Cap Growth Fund
AIM Equity Funds -- AIM Weingarten Fund
AIM Floating Rate Fund
AIM Funds Group -- AIM Balanced Fund
AIM Funds Group -- AIM European Small Company Fund
AIM Funds Group -- AIM Global Utilities Fund
AIM Funds Group -- AIM International Emerging Growth Fund
AIM Funds Group -- AIM New Technology Fund
AIM Funds Group -- AIM Select Growth Fund
AIM Funds Group -- AIM Small Cap Equity Fund
AIM Funds Group -- AIM Value Fund
AIM Funds Group -- AIM Value Fund II
AIM Funds Group -- AIM Worldwide Spectrum Fund
AIM Growth Series -- AIM Basic Value Fund AIM Growth Series -- AIM Euroland Growth Fund AIM Growth Series -- AIM Japan Growth Fund AIM Growth Series -- AIM Mid Cap Equity Fund AIM Growth Series -- AIM Small Cap Growth Fund
AIM International Funds, Inc. -- AIM Asian Growth Fund AIM International Funds, Inc. -- AIM European Development Fund AIM International Funds, Inc. -- AIM Global Aggressive Growth Fund AIM International Funds, Inc. -- AIM Global Growth Fund AIM International Funds, Inc. -- AIM Global Income Fund AIM International Funds, Inc. -- AIM International Equity Fund
AIM Investment Funds -- AIM Developing Markets Fund AIM Investment Funds -- AIM Global Consumer Products and Services Fund AIM Investment Funds -- AIM Global Financial Services Fund AIM Investment Funds -- AIM Global Health Care Fund AIM Investment Funds -- AIM Global Infrastructure Fund AIM Investment Funds -- AIM Global Resources Fund AIM Investment Funds -- AIM Global Telecommunications and Technology Fund AIM Investment Funds -- AIM Latin American Growth Fund AIM Investment Funds -- AIM Strategic Income Fund
AIM Investment Securities Funds -- AIM High Yield Fund AIM Investment Securities Funds -- AIM High Yield Fund II AIM Investment Securities Funds -- AIM Income Fund AIM Investment Securities Funds -- AIM Intermediate Government Fund
AIM Series Trust -- AIM Global Trends Fund
AIM Special Opportunities Funds -- AIM Large Cap Opportunities Fund AIM Special Opportunities Funds -- AIM Mid Cap Opportunities Fund AIM Special Opportunities Funds -- AIM Small Cap Opportunities Fund
AIM Summit Fund
AIM Variable Insurance Funds -- AIM V.I. Aggressive Growth Fund AIM Variable Insurance Funds -- AIM V.I. Balanced Fund AIM Variable Insurance Funds -- AIM V.I. Blue Chip Fund AIM Variable Insurance Funds -- AIM V.I. Capital Appreciation Fund AIM Variable Insurance Funds -- AIM V.I. Capital Development Fund AIM Variable Insurance Funds -- AIM V.I. Dent Demographic Trends Fund AIM Variable Insurance Funds -- AIM V.I. Diversified Income Fund AIM Variable Insurance Funds -- AIM V.I. Global Utilities Fund AIM Variable Insurance Funds -- AIM V.I. Government Securities Fund AIM Variable Insurance Funds -- AIM V.I. Growth and Income Fund AIM Variable Insurance Funds -- AIM V.I. Growth Fund AIM Variable Insurance Funds -- AIM V.I. High Yield Fund AIM Variable Insurance Funds -- AIM V.I. International Equity Fund AIM Variable Insurance Funds -- AIM V.I. Telecommunications and Technology Fund AIM Variable Insurance Funds -- AIM V.I. Value Fund
Schedule 1
TCB-HOUSTON
PRICES ARE GUARANTEED FOR 90 DAYS FROM: 6/09/94
PRO-FORMA ACCOUNT ANALYSIS STATEMENT
AIM FUNDS SERVICES, INC. ANALYSIS PERIOD PAGE
LEVEL ENDING NO.
ACCOUNT DETAIL 04/30/94 1 OF 1
CHECK PROCESSING
|
EARNINGS RESERVE BALANCE
AVERAGE DEMAND BALANCES THIS PERIOD CREDIT REQUIREMENT MULTIPLIER
----------------------------------- -------- ----------- ---------
LEDGER BALANCE $0.00 3.55% 10.00% 362.72
LESS UNCOLLECTED FUNDS $0.00
-----
COLLECTED BALANCE $0.00
LESS INTEREST BEARING BALANCE $0.00
-----
NET COLLECTED BALANCE $0.00
LESS RESERVE REQUIREMENT $0.00
-----
NET AVAILABLE BALANCE $0.00
|
WEIGHTED
SERVICES RENDERED UNIT PRICE ACTIVITY TOTAL PRICE BALANCE EQUIVALENT
----------------- ---------- -------- ----------- ------------------
AUTOMATED CLEARING HOUSE
Night Cycle CR/DE - One Day 0.0750 2,200 $ 165.00 $ 56,568.80
Day Cycle CR/DE - Two Day 0.0750 26,000 $ 1,950.00 $ 668,304.00
ACI Data Transmission 10.0000 1 $ 10.00 $ 3,427.20
Monthly Maintenance - TexID/Acct 50.0000 1 $ 30.00 $ 17,136.00
Return Items 2.5000 137 $ 342.50 $ 117,381.60
CUSTOMER ACCOUNTING
Account Maintenance 20.0000 9 $ 180.00 $ 61,689.60
Return Items - Received 2.5000 246 $ 615.00 $ 210,772.80
Return Items - Receivers 1.5000 492 $ 738.00 $ 252,927.36
FDIC Assessment $.16/$1000 Ledger 469.3300 1 $ 469.33 $ 160,848.78
Customer Research - per copy 2.0000 1 $ 2.00 $ 685.44
ITEM PROCESSING
Tier I/Local City 0.0300 560 $ 16.80 $ 5,757.70
Tier II/Local RCPC 0.0450 124 $ 5.58 $ 1,912.38
Tier III/Texas Fed Cities 0.0550 628 $ 34.54 $ 11,837.55
Tier IV/Other Texas 0.0600 1,118 $ 67.08 $ 22,989.66
Tier V/Other Transit 0.0600 34,050 $ 2,043.00 $ 700,176.96
NICROLINE
APC Transactions 0.1000 2,200 $ 220.00 $ 75,398.40
APC Maintenance w/ Cash Manager 25.0000 1 $ 25.00 $ 8,568.00
Cash Manager Software Maintenance 35.0000 1 $ 35.00 $ 11,995.20
Bank Account - TCB 20.5500 9 $ 184.95 $ 65,386.06
Bank Account - Other Banks 28.3300 15 $ 424.95 $ 145,638.86
Previous Day Items 0.1500 26,039 $ 3,905.85 $1,338,612.91
TEX-COM
TX Corp. DX TCB Accounts 25.5600 9 $ 230.04 $ 78,839.31
TX Corp. DX TCB Accts D8/CR Items 0.2000 3,039 $ 607.80 $ 208,305.22
WIRE TRANSFER
Incoming transfer - Autopost 4.5000 660 $ 2,970.00 $1,017,878.40
Account Maintenance 5.0000 1 $ 5.00 $ 1,713.60
IDA Repetitive - Outgoing 6.0000 22 $ 132.00 $ 45,239.04
TOTALS BEFORE RESERVES $ 15,429.42 $5,287,970.82
SUMMARY ANALYSIS
NET AVAILABLE BALANCE $0.00
LESS BALANCES REQUIRED TO SUPPORT SERVICES $5,250,970.82
-------------
BALANCES AVAILABLE FOR OTHER SERVICES ($5,287,970.82)
COLLECTED BALANCE REQUIRED $5,875,523.14
OR
FEES DUE FOR COLLECTED BALANCE DEFICIENCY $17,143.80
|
-- Ledger Balance -- The average gross balance that includes all collected and uncollected funds. It is the sum of each day's ending ledger inclusive of aggregate adjustments divided by the number of days in the reporting month.
-- Less Funds in Process of Collection -- The average float incurred for the reporting month calculated by subtracting average collected balance from the average ledger balance.
-- Collected Balance -- The sum of each day's ending collected balance inclusive of aggregate adjustments divided by the number of days in the reporting month.
-- Less Interest Bearing Balance -- The average collected balance maintained in interest bearing accounts.
-- Net Collected Balance -- Collected balance minus interest bearing balance.
-- Less Reserve Requirement -- The amount of every dollar of collected balances that must be held in reserve. Net collected balance multiplied by the reserve requirement rate.
-- Net Available Balance -- The balance available to apply towards compensation for services rendered. Net collected balance minus the reserve requirement.
Earnings Credit -- This percent approximates the value of the alternative use of cash in short term investment. The rate is adjusted monthly to reflect market trends during the period.
Reserve Requirement -- This percentage is determined by state or federal regulations. This percentage of every dollar of collected balances must be held in reserve by the bank.
Balance Multiplier -- This shows the available balances required to compensate for $1.00 of service activity for one month. It is calculated by applying the earnings credit rate to $1.00 of services as follows:
$1.00 Days in the Year ---------------- X ------------------- Earnings Credit Days in the Month |
Services Rendered -- The description of services provided during the reporting month.
Weighted Unit Price -- Total price divided by total activity.
Activity -- The total number of units rendered for each service.
Total Price -- The unit price multiplied by the activity.
Balance Equivalent -- The available balances required to compensate for services rendered. Total price multiplied by the balance multiplier.
Summary Analysis
-- Balance Available for Other Services -- this represents the difference between the net available balance and the balances required to support services rendered.
-- Collected Balance Equivalent -- This represents the collected balances equivalent that is available to support additional services. The formula for calculation is:
-- Collected Balances Required -- This represents the collected balance required to compensate for a current month deficient available balance. The formula for calculation is:
-- Fees Due for Collected Balance Deficiency -- The amount due in fees for a collected balance deficiency. The formula for calculation is:
June 2, 1994
PRO-FORMA ACCOUNT ANALYSIS ADDENDA Page 1
AIM Fund Services, Inc.
BANK/PRODUCT/ACTIVITY UNIT PRICE MINIMUM
--------------------- ---------- -------
TCB-Houston
MICROLINK
Cash Manager Software Setup $325.00 0.00
Automated Payments and
Collections (APC) Software
and Setup $225.00 0.00
ACH Transmission Setup $200.00 0.00
|
SCHEDULE 2
|
Jack Caldwell President Ira Cohen Vice President Mary Corcoran Vice President Sidney M. Dilgren Vice President Robert A. Frazer Assistant Vice President Mary Gentempo Vice President Richard Snyder Senior Vice President |
Torri Evans
Debi Folse
Ann Marie Mahoney
Tim McDonough
Robert Thompson
EXHIBIT g(2)(b)
AMENDMENT NO. 1
SUBCUSTODIAN AGREEMENT
WITH
TEXAS COMMERCE BANK
(NOW KNOWN AS CHASE BANK OF TEXAS, N.A.)
The Subcustodian Agreement with Texas Commerce Bank (now known as Chase Bank of Texas, N.A.) (the "Agreement"), dated September 9, 1994, is hereby amended as follows (terms used herein but not otherwise defined herein have the meaning ascribed them in the Agreement):
1) Section 7 - Communications is hereby deleted in its entirety and replaced with the following:
Communications. All communications required or permitted to be given under this Agreement shall be in writing (including telex, telegraph or telefax, facsimile or similar electronic transmittal device) and shall be deemed given (a) upon delivery in person to the persons indicated below, or (b) three days after deposit in the United States postal service, postage prepaid, registered or certified mail, return receipt requested, or (c) upon receipt by facsimile (provided that receipt of such facsimile is confirmed telephonically by the addressee) or (d) by overnight delivery service (with receipt of delivery) sent to the address shown below, or to such different address(es) as such party shall designate by written notice to the other parties hereto at least ten days in advance of the date on which such change of address shall be effective. All communications required or permitted to be given under this Agreement shall be addressed as follows:
(i) to the Subcustodian: Chase Bank of Texas, N.A. P. O. Box 2558 Houston, Texas 77252-8391 Attn: Kathy Wallace
(ii) to the Custodian: State Street Bank and Trust Company 1776 Heritage Drive North Quincy, MA 02171 Attn: Judith Charny
(iii) to the Transfer Agent: A I M Fund Services, Inc. 11 Greenway Plaza Suite 100 Houston, Texas 77046 Attn: Robert Frazer
2) Schedule A to the Agreement is hereby deleted in its entirety and replaced with the following:
AIM Advisor Funds, Inc.
AIM Equity Funds, Inc.
AIM Funds Group
AIM International Funds, Inc.
AIM Investment Securities Funds
AIM Special Opportunities Funds
AIM Tax-Exempt Funds, Inc.
3) Schedule 2 to the Agreement is hereby deleted in its entirety and replaced with the following:
Authorized Officers Jack Caldwell President Mary A. Corcoran Senior Vice President Sidney M. Dilgren Senior Vice President Tony D. Green Senior Vice President Lois S. Murphy Senior Vice President Linda L. Wariner Senior Vice President Ira P. Cohen Vice President Mary E. Gentempo Vice President Kim T. McAuliffe Vice President Robert A. Frazer Assistant Vice President Authorized Representatives Sherri Arbour Debi Folse Robert Thompson |
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: 10-2-98
----------------
CHASE BANK OF TEXAS, N.A.
(as Subcustodian)
By: /s/ KATHY WALLACE
------------------------------------
Title: Vice President
---------------------------------
STATE STREET BANK AND TRUST COMPANY
(as Custodian)
By: /s/ [ILLEGIBLE]
------------------------------------
Title: Executive Vice President
---------------------------------
A I M FUND SERVICES, INC.
(as Transfer Agent)
By: /s/ JOHN CALDWELL
------------------------------------
Title: President
---------------------------------
EACH OF THE FUNDS LISTED ON AMENDED
SCHEDULE A HERETO
By: /s/ ROBERT H. GRAHAM
------------------------------------
Title: President
---------------------------------
|
h(4)(b)
AMENDMENT NO. 1
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated September 11, 2000, by and between A I M Advisors, Inc., a Delaware corporation, and AIM Investment Funds, a Delaware business trust, is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM INVESTMENT FUNDS
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Developing Markets Fund September 1, 2001 AIM Global Energy Fund September 1, 2001 AIM Global Financial Services Fund September 11, 2000 AIM Global Health Care Fund September 1, 2001 AIM Global Infrastructure Fund September 11, 2000 AIM Global Telecommunications and Technology Fund September 1, 2001 AIM Strategic Income Fund September 1, 2001 |
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 1, 2001
A I M ADVISORS, INC.
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------- --------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
AIM INVESTMENT FUNDS
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------- --------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
h(4)(c)
AMENDMENT NO. 2
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated September 11, 2000, by and between A I M Advisors, Inc., a Delaware corporation, and AIM Investment Funds, a Delaware business trust, is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM INVESTMENT FUNDS
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Developing Markets Fund September 1, 2001 AIM Global Biotech Fund December __, 2001 AIM Global Energy Fund September 1, 2001 AIM Global Financial Services Fund September 11, 2000 AIM Global Health Care Fund September 1, 2001 AIM Global Infrastructure Fund September 11, 2000 AIM Global Telecommunications and Technology Fund September 1, 2001 AIM Strategic Income Fund September 1, 2001" |
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December __, 2001
A I M ADVISORS, INC.
Attest: By:
------------------------------ ----------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
AIM INVESTMENT FUNDS
Attest: By:
------------------------------ ----------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
EXHIBIT h(5)
INTERFUND LOAN AGREEMENT
September 18, 2001
Interfund Loan Agreement (the "Agreement"), dated as of the date first written above, by and among AIM Advisor Funds ("AAF"); AIM Equity Funds ("AEF"); AIM Funds Group (AFG"); AIM Growth Series ("AGS"); AIM International Funds, Inc. ("AIFI"); AIM Investment Funds ("AIF"); AIM Investment Securities Funds ("AISF"); AIM Series Trust ("AST"); AIM Special Opportunities Funds ("ASOF"); AIM Summit Fund ("Summit"); AIM Tax-Exempt Funds ("ATEF"); AIM Variable Insurance Funds (AVIF"); Short-Term Investments Co. ("STIC"); Short-Term Investments Trust ("STIT"); and Tax-Free Investments Co. ("TFIC") (each, a "Fund" and collectively, the "Funds"), with respect to their series of shares shown on Annex A attached hereto (each, a "Portfolio" and collectively, the "Portfolios"), as the same may be amended from time to time, and A I M Advisors, Inc. (the "Advisor");
WHEREAS, each of the Funds is an open-end management company and each Portfolio is separately managed in accordance with its own investment objectives and restrictions;
WHEREAS, certain of the Portfolios listed on Annex A hereto, desire to borrow funds for temporary purposes to satisfy redemption requests or to cover Temporary Overdrafts (as defined below) (each such borrowing Portfolio is hereinafter referred to as a "Borrower");
WHEREAS, certain Portfolios are willing to lend funds to one or more Portfolios from time to time on the terms set forth below (each such lending Portfolio is hereinafter referred to as a "Lender");
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. As used herein, the following terms shall have meanings assigned to them below:
"1940 Act" means the Investment company Act of 1940, as amended.
"Bank" has the meaning ascribed to that term in the 1940 Act and the rules and regulations thereunder.
"Bank Loan Rate" means the rate calculated by the Advisor according to a formula established by the Trustees intended to approximate the lowest interest rate at which bank short-term loans would be available to the Funds.
"Borrowing Instructions" has the meaning specified in Section 3.1.
"Business Day" means a day on which the New York Stock Exchange, Inc. is open for the purpose of transacting business.
"Cash Management Team" means the Advisor money market investment professionals (including the portfolio manager for LAP) and personnel of the Advisor fund accounting department who are responsible for administering the interfund credit facility.
"Credit Arrangements" means the credit arrangements that a Fund may have with respect to a Portfolio for borrowing for temporary or emergency purposes in connection with net redemptions of the Portfolios or to cover Temporary Overdrafts.
"Custodian" means the entity which acts as the Borrower's custodian for purposes of Section 17(f) of the 1940 Act.
"Interest Rate" means a daily interest rate that is the average of the Repo Rate and the Bank Loan Rate.
"LAP" means the Institutional Class of Liquid Asset Portfolio, a series of Short-Term Investments Co., or any successor thereto or, in the event such portfolio has terminated operations without its assets having been acquired by a successor, the general money market fund advised by the Advisor having the greatest amount of net assets or, in the event there is no such fund, the United States registered general money market fund advised by an entity controlling, controlled by or under common control with, the Advisor having the greatest amount of net assets.
"Lending Instructions" has the meaning specified in Section 3.1.1.
"Loan" has the meaning specified in Section 2.
"Loan Account" has the meaning specified in Section 3.5.
"Maximum Amount" has the meaning specified in Section 2.
"Money Market Funds" means AIM Money Market Fund, a portfolio of AISF; AIM Tax-Exempt Cash Fund, a portfolio of ATEF; AIM V. I. Money Market Fund, a portfolio of AVIF; Liquid Assets Portfolio and Prime Portfolio, portfolios of STIC; Treasury Portfolio, Government TaxAdvantage Portfolio and Government & Agency Portfolio, portfolios of STIT; Cash Reserve Portfolio, a portfolio of TFIC; and any future Portfolios that hold themselves out as money market funds.
"Obligations" means all of the obligations (whether direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising) of a Borrower to a Lender hereunder.
"Outstanding Secured Borrowing" means any loan advance made to a Portfolio either under this Agreement or under a Bank Credit Arrangement which is secured by assets of the Portfolio.
"Pledge Demand" has the meaning specified in Section 3.11.
"Prospectus" means with respect to each Borrower the prospectus required to be delivered by the Borrower to offerees of its securities pursuant to the Securities Act of 1933, as amended.
"Repo Rate" means the highest rate available to LAP from investments in overnight repurchase agreements.
"SEC" means the Securities and Exchange Commission.
"Secured Loan" has the meaning in Section 2(e).
"Statement of Additional Information" means with respect to each Borrower the Statement of Additional Information that must be provided by the Borrower to recipients of its Prospectus upon request pursuant to rules and regulations adopted by the SEC.
"Temporary Overdraft" means a temporary overdraft occurring when a sale of a security "fails" due to circumstances beyond the seller's control, such as a delay in the delivery of cash to the Fund's custodian or improper delivery instructions by the broker effecting the transaction.
"Trustees" means the Board of Directors or Trustees of a Fund.
"Unsecured Loan" means any Loan other than a Secured Loan.
Section 2. Lending Facility. Subject to the terms and conditions of this Agreement, each Lender may from time to time in its discretion loan its funds ("Loan") to any Borrower. Each Loan shall be made for a term of the lesser of (a) not less than one (1) and not more than seven (7) Business Days or (b) the maturity of any outstanding loan or advance to the Borrower under its Credit Arrangements. The maximum principal amount of all Loans outstanding with respect to any Borrower at any time shall not exceed the Maximum Amount the Borrower is permitted to borrow at such time under:
(a) applicable laws and regulations;
(b) the provisions of Section 5.2;
(c) agreements with federal, state, local or foreign governmental authorities or regulators applicable to the Borrower or limitations specified in the Order, all as amended and in effect from time to time;
(d) limitations on borrowing adopted by the Borrower in its Prospectus, Statement of Additional Information or elsewhere, as amended and in effect from time to time; and
(e) in the case of Loans for which the Borrower is required to provide collateral pursuant to Section 3.11 ("Secured Loans"), any limitations specified in the Security Agreement and limitations on the pledging of assets adopted by the Borrower in its Prospectus, Statement of Additional Information or elsewhere.
As used herein, the term "Maximum Account" means the maximum amount that the Borrower is permitted to borrow in accordance with the provisions of the preceding sentence.
Section 3. Loans.
Section 3.1. Procedural Requirements. All Loans shall be requested and funded in accordance with the procedures set forth herein and such other procedures as may be adopted from time to time by the Trustees of each Fund.
Section 3.1.1. Borrowing and Lending Instructions. The Portfolios, other than the Money Market Funds, shall provide the Cash Management Team with standing instructions as to their desire to act as a Borrower when and if such Portfolio has borrowing needs ("Borrowing Instructions") and/or as a Lender when such Portfolio has uninvested cash balances ("Lending Instructions"). The Money Market Funds shall provide daily Borrowing and/or Lending Instructions to the Cash Management Team as to the amount of cash, if any, any such Portfolio of such Fund desires to borrow or lend. The Portfolios may revoke or change Borrowing or Lending Instructions by notifying the Cash Management Team.
Section 3.1.2. Allocation Procedures. On each occasion that a Portfolio that has provided Borrowing Instructions to the Cash Management Team has borrowing needs, the Cash Management Team will seek to match the amount and term of the Portfolio's borrowing needs with the cash available from the Portfolios that have provided Lending Instructions in accordance with allocation and administrative procedures established by the Trustees.
No Loan may be allocated to a Lender with respect to a Portfolio unless the Interest Rate is higher than the Repo Rate and, if applicable, the yield on LAP, and lower than the Bank Loan Rate.
Section 3.1.3. Funding the Loans. If a Loan has been allocated to a Lender and Borrower pursuant to Section 3.1.2, and the Loan is otherwise in compliance with the requirements set forth in the Order, the Lender shall make such Loan to the Borrower. Each Loan made by the Lender to the Borrower shall be wired (or transferred if Borrower and Lender have the same Custodian) at the Borrower's expense in accordance with the wiring instructions for each Fund maintained by the Advisor, as in effect from time to time, to an account
maintained on the Borrower's behalf by its Custodian for the Portfolio in respect of which such Loan is made.
Section 3.1.4. Obligations Arising from Loan. Each Loan made by the Lender to the Borrower shall;
(a) obligate the Borrower to borrow the principal amount of the Loan at the Interest Rate applicable thereto for the term thereof solely for use by the Borrower;
(b) constitute a representation and warranty by the Borrower to the
Lender that (i) the Loan requested thereby (A) is permitted under the Borrower's
most recent Prospectus and Statement of Additional Information, (B) is in
accordance with the requirements of any applicable SEC order of exemption
applicable to the Borrower, (C) will not, when made, cause the aggregate
indebtedness of the Borrower to exceed the Maximum Amount then in effect, and
(D) will be used by the Borrower only in accordance with the provisions of
Section 3.7 hereof, and (ii) all of the representations and warranties of the
Borrower contained in Section 4 hereof are true and correct as of the date of
such Loan as though made on and as of such dates; and
(c) constitute a representation and warranty by the Lender to the Borrower that the Loan thereby (i) is permitted under the Lender's most recent Prospectus and Statement of Additional Information, and (ii) is in accordance with the requirements of the Order.
Section 3.2. Repayment of Loans. The principal amount of each Loan shall be repaid by the Borrower from the assets of the Borrower upon the earlier of (a) one Business Day after demand by the Lender or (b) the expiration of the term of such Loan.
Section 3.3. Interest. The outstanding principal amount of each Loan
shall bear interest until maturity at the Interest Rate. Interest accrued on
each Loan shall be paid by the Borrower upon the earlier of (a) demand, or (b)
the maturity of such Loan. Amounts overdue hereunder (including, without
limitation, overdue principal, and, to the extent permitted by law, overdue
interest, fees, charges and expenses) shall bear interest until paid at a rate
equal to the sum of (a) the Interest Rate applicable to such Loan prior to its
maturity and (b) such additional amount not to exceed 2%, as may be determined
by an independent arbitrator of disputes previously approved by the Trustees of
both Borrower and Lender except that in the case of an Event of Default under
Section 6.2.2 such additional amount shall equal 2%.
Section 3.4. Prepayments. Loans may be prepaid without penalty prior to the date on which such Loan is due and payable.
Section 3.5. Loan Records Accounts. Promptly after a Loan has been made, the Cash Management Team shall note on its records for the Borrower and Lender, confirming (a) the principal amount of such Loan, (b) the Interest Rate applicable thereto and (c) the maturity thereof. The Cash Management Team will maintain a separate account on its books for each Lender and Borrower (a "Loan Account") on which will be recorded, in accordance with
the Advisor's customary accounting practice, (a) all Loans made by a Lender to a Borrower, (b) all payments of such Loans made to a Lender and (c) all other charges and expenses properly chargeable to the Borrower. The debit balance of each Portfolio's Loan Account shall reflect the amount of the Borrower's indebtedness from time to time to the Lenders hereunder. Any written statement maintained by the Cash Management Team regarding the Loan shall, in the absence of manifest error, constitute conclusive evidence of the indebtedness of the Borrower to the Lender as of the date of such statement, provided, however, that the failure of the Cash Management Team to make such statement shall not impair the validity or binding nature of the Borrower's Obligations with respect to such Loan.
Section 3.6. Computations. All computations hereunder shall be computed on the basis of the actual number of days elapsed and either (a) a 360-day year or (b) the actual number of days in the year, as determined by the Cash Management Team when it sets the Interest Rate.
Section 3.7. Use of Proceeds. The proceeds of each Loan made hereunder with respect to any Portfolio shall be used only by such Portfolio for temporary or emergency purposes in accordance with its Prospectus and Statement of Additional Information to satisfy redemption requests or to cover Temporary Overdrafts.
Section 3.8. Discretionary Facility. It is acknowledged and agreed by each Borrower that each Lender has no obligation to make any Loan hereunder unless it has issued Lending Instructions, and that the decision whether or not to issue Lending Instructions under this Agreement is within the sole and exclusive discretion of each Lender. It is acknowledged and agreed by each Lender that no Borrower is obligated to borrow money hereunder unless it has issued Borrowing Instructions.
Section 3.9. Termination of Participation in Interfund Credit Facility. Each Lender and each Borrower may terminate its participation in this Agreement at any time by written notice to the Cash Management Team.
Section 3.10. Recourse to Assets. Loans made to any Portfolio shall be repaid solely from the assets of such Portfolio, and a Lender shall have no right of recourse or offset against the assets of any other Portfolio with respect to such Loans or any default in respect thereto. Each Lender's liability under this Agreement with respect to a Loan shall be solely limited to the Lender's assets and each Borrower hereby waives any and all rights it may have against any other Portfolios with respect to such Loan or any default by Lender with respect thereto.
Section 3.11. Collateral Security for Loans. As a condition precedent to making any Loan to any Borrower or continuing any Loan made to any Borrower hereunder, (a) the Lender may require, by written notice to the Borrower or (b) the Lender shall require in the event that the Borrower's outstanding borrowings from all sources immediately after the Loan would exceed 10% of its total assets, or the Borrower has Outstanding Secured Borrowings, that the
Borrower pledge stock or other securities as collateral for such Loan ("Pledge Demand"). The minimum market value of the stock and other portfolio securities of the Borrower required to be pledged to the Lender hereunder with respect to any Secured Loan shall be determined by the Lender in its discretion but, in all cases, shall be not less than the 102% of the outstanding principal value of the loan. Each pledge of collateral required pursuant to this Section 3.11 shall be made in accordance with and subject to the terms and conditions set forth in a security agreement in form satisfactory to Borrower and Lender, and shall be effected (a) in the case of any pledge required as a condition precedent to making any Secured Loan hereunder, prior to making such Secured Loans, and (b) in the case of any pledge required as a condition precedent to continuing any Loan hereunder, within 24 hours after delivery to the Borrower of the Pledge Demand therefor or the occurrence of the conditions specified in (b) above.
Section 3.12. Confirmation. The obligations of the Borrower to repay the unpaid principal amount of the Loan made to it by the Lender and to pay interest thereon shall be evidenced by the Lender's records as well as by a confirmation of loan in the form of Exhibit I, confirming the principal amount, the Interest Rate and the maturity date of the Loan.
Section 4. Representations and Warranties.
Each Borrower represents and warrants to each Lender and each Lender represents and warrants to each Borrower on the date hereof, and as to any Borrower or Lender on the date of any borrowing, as follows:
(a) It is a Portfolio of a Fund that is duly organized and validly existing under the laws of its jurisdiction of organization and is qualified to do business in every other jurisdiction where lack of such qualification would have a material adverse effect on the business, assets or condition (financial or otherwise) of the Fund.
(b) The Fund is registered as an open-end management investment company under the 1940 Act.
(c) The execution, delivery and performance by the Fund of
this Agreement on behalf of itself and its Portfolios are (i) within its power,
(ii) have been duly authorized by all necessary action, and (iii) will not (A)
contribute to or result in a breach of or default under or conflict with any
existing law, order, regulation or ruling of any governmental or regulatory
agency or authority, any order, writ, injunction or ruling of any court or other
tribunal, or any indenture, lease agreement, instrument or other undertaking to
which the Fund is a party or by which it or its property or assets may be bound
or affected, or (B) result in the imposition of any liens or encumbrances on any
property or assets of the Fund or (C) require any additional approval or consent
of, or filling with, shareholders of such Fund or any governmental or regulatory
agency or authority bearing on the validity of any borrowing pursuant to this
Agreement, or (D) violate any provision of the Fund's organizational documents
or bylaws, or any amendment thereof or any provision of its most recent
Prospectus or Statement of Additional Information.
(d) This Agreement is a legally valid and binding obligation of the Fund, enforceable against the Fund in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws or equitable principles relating to or limiting the rights of creditors generally.
(e) No additional authorization, approval, or other action by, and no notice to or filing with, any shareholder of the Fund, creditor, or governmental or regulatory agency or authority is required for the due and valid execution, delivery and performance of this Agreement by the Fund or the exercise by the Fund of any rights and remedies under this Agreement.
Section 5. Covenants.
Section 5.1. Covenants in Effect Until Termination of Agreement. Until all of the obligations have been performed in full and its participation in the Lending Facility has been terminated as provided herein, each Borrower covenants as follows:
(a) At any time and from time to time, it will, at its own expense, promptly execute and deliver or file all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Lender may request, in order to perfect, protect, validate or preserve any security interest granted, or pledged to the Lender pursuant to Section 3.11 or to enable the Lender to exercise and enforce its rights and remedies thereunder with respect thereto.
(b) It will file all federal and other tax returns, reports and declarations required by all relevant jurisdictions on or before the due dates for such returns, reports and declarations and will pay all taxes and other governmental assessments and charges as and when they become due.
(c) It will comply with all of its investment policies and restrictions and all applicable laws, regulations and governmental or regulatory directives.
(d) It will promptly notify the Lender of any material change in its agreements with governmental authorities or regulators or its investment policies or restrictions.
(e) It will make available to the Lender upon request from time to time the most recent reports required by Section 30(d) of the 1940 Act.
(f) Upon request from the Lender from time to time, it will furnish to the Lender at reasonable times and intervals any information with respect to its financial standing and history or its property or business or prospects.
(g) Within 60 days after the date of this Agreement or such earlier time as may be necessary to comply with Section 3.11, the Borrower shall deliver an agreement, in a form satisfactory to each Lender duly executed by the Borrower and its Custodian, that establishes procedures for the making, maintaining and releasing each pledge of securities required by Section 3.11.
Section 5.2. Covenants in Effect While Loans are Outstanding. Each Borrower covenants that, so long as any principal of or interest on any Loan made to it is outstanding:
(a) It will not, as long as any Unsecured Loan is outstanding hereunder, create or permit to exist any encumbrance in favor of any person or entity other than the Lender upon any of the assets of the Borrower other than encumbrances created in connection with portfolio investments of the Borrower to the extent permitted by the provisions of its Prospectus and Statement of Additional Information applicable to such Portfolio (and not for the primary purpose of borrowing money) such as: (i) margin amounts on futures contracts and options on futures contracts, (ii) segregated assets to cover a call or to secure a put, or to cover short sales against the box or open positions under currency forward contracts, (iii) obligations to resell securities in connection with the purchase of such securities under repurchase agreements, and (iv) obligations to redeliver cash or securities in connection with pledges of such cash or securities in favor of the Borrower under securities lending agreements and master note agreements.
(b) It will not take out any Loan that (1) immediately after such loan would cause the total of such Portfolio's loans to exceed 33-1/3% of the Borrower's total assets (or such lesser percentage as provided in a Borrower's Prospectus and Statement of Additional Information), or (2) would cause such Portfolio's total loans to exceed 10% of such Portfolio's total assets unless any Loan hereunder is secured in accordance with Section 3.11.
(c) Unless the Fund has a policy that prevents it from borrowing for other than temporary or emergency purposes (and not for leveraging), it will not, as long as any Loan made with respect to the Portfolio is outstanding, allow the total amount of such Portfolio's Loans, as measured on the day when the most recent Loan was made, to exceed the greater of 125% of such Portfolio's total net cash redemptions and 102% of Temporary Overdrafts for the preceding seven (7) calendar days.
(d) It will notify Lender if it draws on its Credit Arrangements, borrows from other Lenders under the Agreement, or borrows from other parties.
(e) It will notify the Lender promptly of (i) any material change in its method of business, Prospectus or Statement of Additional Information, and (ii) the occurrence of any event which would make any of the representations and warranties contained herein, or in any document, instrument or certificate delivered in connection herewith, untrue or inaccurate in any material respect.
Section 6. Default.
Section 6.1. Events of Default. The occurrence of any one or more of the following events ("Events of Default") shall constitute an immediate Event of Default with respect to the Borrower (it being understood that an Event of Default with respect to one Borrower shall not constitute an Event of Default of any other Borrower):
(a) The Borrower shall fail to pay principal of, or interest on, any Loan as and when due, or the Borrower shall fail to perform any of its other Obligations; or
(b) There shall be a default by the Borrower under any Credit Arrangement, whether such Credit Arrangement now exists or shall hereafter be created, which default extends beyond any period of grace provided with respect thereto and which default relates to (i) the obligations to pay the principal of or interest on any such indebtedness under the Credit Arrangement or (ii) an obligation other than the obligation to pay the principal of or interest on any such indebtedness and the effect of such default is to cause, or to permit the lender under the Credit Arrangement to cause, with the giving of notice if required, such indebtedness to become due prior to its stated maturity.
(c) Any representation or warranty made by the Borrower in
Section 4, or in connection with any Loan made to or pledge of pledged
collateral made by the Borrower, shall prove to have been incorrect in any
material respect when made; or
(d) The Borrower shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any governmental or public authority shall take over possession or control of a substantial part or the Borrower's business; or any of the Borrower's property shall become subject to attachment or other involuntary lien or levy; or any action or proceeding shall be commenced by the Borrower seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, seeking the entry of an order for relief or the appointment of a receiver, trustee, of similar official for it or for any substantial part of its property, or any such proceeding is commenced against it which results in the entry of an order for such relief or such proceeding is not dismissed or stayed for a period of 60 days following such commencement.
Section 6.2. Remedies.
Section 6.2.1. Arbitration. In the event an Event of Default has occurred and not been cured within two Business Days from the Loan's maturity or from the time the Lender makes a demand for payment (and none of the Events of Default specified in Section 6.1(b) or (d) has occurred), the Lender and the Borrower agree that such matter shall be submitted for binding arbitration to an independent arbitrator selected by the Trustees of the Lender and
Borrower. Such arbitrator's decision shall be binding and conclusive between the Lender and the Borrower. Such arbitrator shall submit a written report of any dispute to the Trustees.
6.2.2. Other Rights and Remedies. If an Event of Default has occurred and has not been resolved pursuant to Section 6.2.1 or an Event of Default specified in Section 6.1 (b) or (d) has occurred, then the Lender shall be entitled to exercise any and all rights and remedies available to it at law or in equity, including without limitation any rights and remedies that may be available to it under the security agreement referred to in Section 3.11 with respect to the affected Borrower and the Borrower shall pay to the Lender all reasonable expenses and disbursements incurred by the Lender in connection with the enforcement of its rights and remedies under this Agreement including the reasonable fees and out-of-pocket expenses of counsel for the Lender with respect thereto.
Section 7. Notice. Except as otherwise expressly provided herein, all notices hereunder to any party shall be in writing and shall be delivered by hand, mailed by United States registered or certified first-class mail, postage prepaid or sent by telegraph, telex or telecopy, addressed to such party to the attention of the person specified in the following sentence at the address set forth for such party in Annex B hereto, or to such other person or address as such party may designate to the other party hereto by notice delivered in accordance with this Section 7. All notices to the Borrower shall be addressed to the Treasurer of the Borrower and all notices from the Borrower to the Lender shall be addressed to the Treasurer of the Lender.
Section 8. Amendments. Neither this Agreement nor any provision hereof may be amended in any respect except by a statement in writing executed by the parties hereto.
Section 9. Assignment. All of the terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns; provided, that the Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Lender.
Section 10. Section Heading. The descriptive section headings in this Agreement have been inserted for convenience of reference only and shall not be deemed to limit or otherwise affect the construction of any provision hereof.
Section 11. Counterparts. This Agreement and the documents contemplated hereby may be executed simultaneously in any number of counterparts each of which when so executed and delivered shall be an original; but all of which shall together constitute but one and the same document.
Section 12. Separability. If any of the provisions of this Agreement or any instrument delivered hereunder or the application thereof to any party hereto or to any person or circumstances is held invalid, the remainder of this Agreement or such instrument and the
application thereof to any party hereto or to any other person or circumstances shall not be affected thereby.
Section 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.
Section 14. Entire Agreement. This Agreement and the other documents contemplated hereby and executed in connection herewith express the entire understanding of the parties with respect to the transactions contemplated hereby.
Section 15. Limitation of Liability of Trustees. This instrument is executed on behalf of the Trustees of the Funds that are Delaware business trusts as trustees and not individually and the obligations of this instrument are not binding upon any of the trustees or shareholders individually but are binding only upon the assets and property of the Fund in accordance with Section 3.10.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as an instrument under seal by its duly authorized officer as of the date first written above.
On behalf of itself and on behalf of its Portfolios listed on Annex A hereto, as such Annex may be amended from time to time:
AIM ADVISOR FUNDS
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SERIES TRUST
AIM SPECIAL OPPORTUNITIES FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
By: /s/ CAROL F. RELIHAN
------------------------------------
Name:
Title:
|
Accepted and Agreed to with respect to the specific obligations imposed on the undersigned by Sections 3.1.1, 3.1.2, 3.1.3, 3.5 and 3.6.
A I M ADVISORS, INC.
By: /s/ CAROL F. RELIHAN ------------------------------------ Name: Title: |
ANNEX A
PORTFOLIOS THAT MAY PARTICIPATE
AS BORROWERS AND LENDERS IN INTERFUND LENDING FACILITY
Fund Portfolio
---- ---------
AIM ADVISOR FUNDS
AIM International Value Fund
AIM Real Estate Fund
AIM EQUITY FUNDS
AIM Aggressive Growth Fund
AIM Basic Balanced Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund
AIM Constellation Fund
AIM Dent Demographic Trends Fund
AIM Emerging Growth Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
AIM FUNDS GROUP
AIM Balanced Fund
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Equity Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund
AIM GROWTH SERIES
AIM Basic Value Fund
AIM Euroland Growth Fund
AIM Mid Cap Equity Fund
AIM Small Cap Growth Fund
|
AIM INTERNATIONAL FUNDS, INC.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
AIM INVESTMENT FUNDS
AIM Developing Markets Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Energy Fund
AIM Global Telecommunications and
Technology Fund
AIM Strategic Income Fund
AIM INVESTMENT SECURITIES
FUNDS
AIM High Yield Fund
AIM High Yield Fund II
AIM Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM SERIES TRUST
AIM Global Trends Fund
AIM SPECIAL OPPORTUNITIES
FUNDS
AIM Large Cap Opportunities Fund
AIM Mid Cap Opportunities Fund
AIM Small Cap Opportunities Fund
AIM Summit Fund
AIM Summit Fund
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Free Intermediate Fund
AIM VARIABLE INSURANCE
FUNDS
AIM V.I. Aggressive Growth Fund
AIM V.I. Balanced Fund
AIM V.I. Basic Value Fund
AIM V.I. Blue Chip Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
AIM V.I. Dent Demographic Trends Fund
AIM V.I. Diversified Income Fund
AIM V.I. Global Utilities Fund
AIM V.I. Government Securities Fund
AIM V.I. Growth and Income Fund
AIM V.I. Growth Fund
AIM V.I. High Yield Fund
AIM V.I. International Equity Fund
AIM V.I. Mid Cap Equity Fund
AIM V.I. Money Market Fund
AIM V.I. New Technology Fund
AIM V.I. Value Fund
SHORT-TERM INVESTMENTS CO.
Liquid Assets Portfolio
Prime Portfolio
SHORT-TERM INVESTMENTS TRUST
Government & Agency Portfolio
Treasury Portfolio
Government TaxAdvantage Portfolio
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio
ANNEX B
NOTICES
Notices to the Portfolios shall be delivered to the following address:
[name of Portfolio], [name of Fund]
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Attention: Treasurer
Notices to A I M Advisors, Inc. shall be delivered to the following address:
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Attention: President
with a copy to:
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Attention: General Counsel
EXHIBIT I
INTERFUND LOAN CONFIRMATION
[Name of Lending Portfolio], a portfolio of [Name of Fund] confirms that pursuant to the Interfund Loan Agreement by and among AIM Advisor Funds, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Funds, Inc, AIM Investment Funds, AIM Investment Securities Funds, AIM Series Trust, AIM Special Opportunities Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Co., Short-Term Investments Trust, Tax-Free Investments Co. and A I M Advisors, Inc. dated ______________, 2001, it has today loaned to [name of Borrowing Portfolio], a portfolio of [name of Fund], $________________, which loan shall mature on __________, 2001 and shall bear interest on the principal balance payable on ____________at a rate equal to ______________ per annum.
Date_____________________
[Name of Fund of which Lending Portfolio is a portfolio]
By:______________________
[Name of Fund of which Borrowing Portfolio is a portfolio]
By:______________________
EXHIBIT i
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP]
October 9, 2001
AIM Investment Funds
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Re: AIM Investment Funds
Registration Statement on Form N-1A
Gentlemen:
We have acted as counsel to AIM Investment Funds, a business trust organized under the laws of the State of Delaware (the "Trust") and registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, series management investment company.
This opinion is given in connection with the filing by the Trust of Post-Effective Amendment No. 60 to the Registration Statement on Form N-1A under the Securities Act of 1933, as amended, and Amendment No. 61 to such Registration Statement under the 1940 Act (collectively, the "Registration Statement") relating to the registration of an indefinite number of Class A, Class B and Class C shares of beneficial interest, par value $.001 per share (the "Shares"), of AIM Global Biotech Fund (the "Fund").
In connection with our giving this opinion, we have examined copies of the Trust's Certificate of Trust, Agreement and Declaration of Trust, as amended (the "Trust Agreement"), and resolutions of the Board of Trustees adopted September 28, 2001, and originals or copies, certified or otherwise identified to our satisfaction, of such other documents, records and other instruments as we have deemed necessary or advisable for purposes of this opinion. We have also examined the prospectus for the Fund, which is included in the Registration Statement, substantially in the form in which it is to become effective (the "Prospectus"). As to various questions of fact material to our opinion, we have relied upon information provided by officers of the Trust.
Based on the foregoing, we are of the opinion that the Shares to be offered for sale pursuant to the Prospectus are duly authorized and, when sold, issued and paid for as described in the Prospectus, will be legally issued, fully paid and nonassessable.
AIM Investment Funds
October 9, 2001
We express no opinion concerning the laws of any jurisdiction other than the federal law of the United States of America and the Delaware Business Trust Act.
Both the Delaware Business Trust Act and the Trust Agreement provide that shareholders of the Trust shall be entitled to the same limitation on personal liability as is extended under the Delaware General Corporation Law to stockholders of private corporations for profit. There is a remote possibility, however, that, under certain circumstances, shareholders of a Delaware business trust may be held personally liable for that trust's obligations to the extent that the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. The Trust Agreement also provides for indemnification out of property of the Fund for all loss and expense of any shareholder held personally liable for the obligations of the Fund. Therefore, the risk of any shareholder incurring financial loss beyond his investment due to shareholder liability is limited to circumstances in which the Fund is unable to meet its obligations and the express limitation of shareholder liabilities is determined not to be effective.
We consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name and to the reference to our firm under the caption "Miscellaneous Information - Legal Matters" in the Statement of Additional Information for the Fund, which is included in the Registration Statement.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP |
EXHIBIT j(1)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form N-1A of our reports dated December 18, 2000, relating to the financial statements and financial highlights of AIM Investment Funds, which appear in such Registration Statement. We also consent to the references to us under the headings "Financial Statements" and "Independent Accountants" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts October 12, 2001 |
[AIM LOGO APPEARS HERE]
--Registered Trademark--
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
713-626-1919
A I M Advisors, Inc.
December 27, 2001
Re: Initial Capital Investment in New Portfolio of AIM Investment Funds (The "Fund")
Ladies and Gentlemen:
We are purchasing shares of the Fund for the purpose of providing initial investment for a new investment portfolio of the Fund. The purpose of this letter is to set out our understanding of the conditions of and our promises and representations concerning this investment.
We hereby agree to purchase shares equal to the following dollar amount for the portfolio:
FUND AMOUNT DATE
---- ------ ----
AIM Global Biotech Fund - Class A Shares $ 10.00 December 27, 2001
AIM Global Biotech Fund - Class B Shares $ 10.00 December 27, 2001
AIM Global Biotech Fund - Class C Shares $ 10.00 December 27, 2001
AIM Global Biotech Fund - Class A Shares [$] December 28, 2001
AIM Global Biotech Fund - Class B Shares [$] December 28, 2001
AIM Global Biotech Fund - Class C Shares [$] December 28, 2001
|
We understand that the initial net asset value per share for the portfolio named above will be $10.
We hereby represent that we are purchasing these shares solely for our own account and solely for investment purposes without any intent of distributing or reselling said shares. We further represent that disposition of said shares will only be by direct redemption to or repurchase by the Fund.
We further agree to provide the Fund with at least three days' advance written notice of any intended redemption and agree that we will work with the Fund with respect to the amount of such redemption so as not to place a burden on the Fund and to facilitate normal portfolio management of the Fund.
Sincerely yours,
/s/ ROBERT H. GRAHAM Robert H. Graham President |
A Member of the AMVESCAP Group
m(1)(b)
AMENDMENT NO. 1 TO THE
SECOND AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Second Amended and Restated Master Distribution Plan (the "Plan"), dated as of July 1, 2000, pursuant to Rule 12b-1 of AIM Investment Funds, a Delaware business trust, is hereby amended as follows:
Schedule A of the Plan is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
SECOND AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS A SHARES AND CLASS C SHARES)
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each Portfolio as designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each Portfolio (or Class thereof) to the average daily net assets of the Portfolio (or Class thereof) for the plan year, computed in a manner used for the determination of the offering price of shares of the Portfolio (or Class thereof).
MINIMUM
ASSET
FUND BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS A SHARES CHARGE FEE FEE
-------------- ------ --- ---
AIM Developing Markets Fund 0.25% 0.25% 0.50%
AIM Global Financial Services Fund 0.25% 0.25% 0.50%
AIM Global Health Care Fund 0.25% 0.25% 0.50%
AIM Global Infrastructure Fund 0.25% 0.25% 0.50%
AIM Global Energy Fund 0.25% 0.25% 0.50%
AIM Global Telecommunications and Technology Fund 0.25% 0.25% 0.50%
AIM Strategic Income Fund 0.10% 0.25% 0.35%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- ------ --- ---
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Financial Services Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM Global Infrastructure Fund 0.75% 0.25% 1.00%
AIM Global Energy Fund 0.75% 0.25% 1.00%
AIM Global Telecommunications and Technology Fund 0.75% 0.25% 1.00%
AIM Strategic Income Fund 0.75% 0.25% 1.00%"
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class thereof).
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: September 10, 2001
AIM INVESTMENT FUNDS
(on behalf of its Class A and Class C Shares)
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------- ------------------------------------------
Assistant Secretary Robert H. Graham
President
|
m(1)c
AMENDMENT NO. 2 TO THE
SECOND AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Second Amended and Restated Master Distribution Plan (the "Plan"), dated as of July 1, 2000, pursuant to Rule 12b-1 of AIM Investment Funds, a Delaware business trust, is hereby amended as follows:
Schedule A of the Plan is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
SECOND AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS A SHARES AND CLASS C SHARES)
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each Portfolio as designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each Portfolio (or Class thereof) to the average daily net assets of the Portfolio (or Class thereof) for the plan year, computed in a manner used for the determination of the offering price of shares of the Portfolio (or Class thereof).
MINIMUM
ASSET
FUND BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS A SHARES CHARGE FEE FEE
-------------- ------ --- ---
AIM Developing Markets Fund 0.25% 0.25% 0.50%
AIM Global Biotech Fund 0.25% 0.25% 0.50%
AIM Global Financial Services Fund 0.25% 0.25% 0.50%
AIM Global Health Care Fund 0.25% 0.25% 0.50%
AIM Global Infrastructure Fund 0.25% 0.25% 0.50%
AIM Global Energy Fund 0.25% 0.25% 0.50%
AIM Global Telecommunications and Technology Fund 0.25% 0.25% 0.50%
AIM Strategic Income Fund 0.10% 0.25% 0.35%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- ------ --- ---
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Biotech Fund 0.75% 0.25% 1.00%
AIM Global Financial Services Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM Global Infrastructure Fund 0.75% 0.25% 1.00%
AIM Global Energy Fund 0.75% 0.25% 1.00%
AIM Global Telecommunications and Technology Fund 0.75% 0.25% 1.00%
AIM Strategic Income Fund 0.75% 0.25% 1.00%"
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class thereof).
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: December ____, 2001
AIM INVESTMENT FUNDS
(on behalf of its Class A and Class C Shares)
Attest: By:
-------------------------- ------------------------------------------
Assistant Secretary Robert H. Graham
President
|
m(2)b
AMENDMENT NO. 1
TO THE FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The First Amended and Restated Master Distribution Plan (the "Plan"), dated as of December 31, 2000, pursuant to Rule 12b-1 of AIM Investment Funds, a Delaware business trust, is hereby amended as follows:
Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ ------- ---------
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Financial Services Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM Global Infrastructure Fund 0.75% 0.25% 1.00%
AIM Global Energy Fund 0.75% 0.25% 1.00%
AIM Global Telecommunications and Technology Fund 0.75% 0.25% 1.00%
AIM Strategic Income Fund 0.75% 0.25% 1.00%"
|
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: September 10, 2001
AIM INVESTMENT FUNDS
(on behalf of its Class B Shares)
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------------ ----------------------------------
Assistant Secretary Robert H. Graham
President
|
m(2)c
AMENDMENT NO. 2
TO THE FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The First Amended and Restated Master Distribution Plan (the "Plan"), dated as of December 31, 2000, pursuant to Rule 12b-1 of AIM Investment Funds, a Delaware business trust, is hereby amended as follows:
Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ ------- ---------
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Biotech Fund 0.75% 0.25% 1.00%
AIM Global Financial Services Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM Global Infrastructure Fund 0.75% 0.25% 1.00%
AIM Global Energy Fund 0.75% 0.25% 1.00%
AIM Global Telecommunications and Technology Fund 0.75% 0.25% 1.00%
AIM Strategic Income Fund 0.75% 0.25% 1.00%"
|
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: December _____, 2001
AIM INVESTMENT FUNDS
(on behalf of its Class B Shares)
Attest: By:
---------------------------- ----------------------------------
Assistant Secretary Robert H. Graham
President
|
EXHIBIT m(3)
[AIM LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT
A I M Distributors, Inc. FOR SALE OF SHARES
OF THE AIM MUTUAL FUNDS
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, by each of the AIM-managed mutual funds (or designated classes of such funds) listed in Schedule A, which may be amended from time to time by AIM Distributors, Inc. ("Distributors") to this Agreement (the "Funds"), under a Distribution Plan (the "Plan") adopted pursuant to said Rule. This Agreement, being made between Distributors, solely as agent for such Funds and the undersigned authorized dealer, defines the services to be provided by the authorized dealer for which it is to receive payments pursuant to the Plan adopted by each of the Funds. The Plan and the Agreement have been approved by a majority of the directors of each of the Funds, including a majority of the directors who are not interested persons of such Funds, and who have no direct or indirect financial interest in the operation of the Plan or related agreements (the "Dis-interested Directors"), by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination that in the exercise of their reasonable business judgement and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit such Fund and its shareholders.
1. To the extent that you provide distribution-related and continuing personal shareholder services to customers who may, from time to time, directly or beneficially own shares of the Funds, including but not limited to, distributing sales literature, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares and providing such other services as the Funds or the customer may reasonably request, we, solely as agent for the Funds, shall pay you a fee periodically or arrange for such fee to be paid to you.
2. The fee paid with respect to each Fund will be calculated at the end of each payment period (as indicated in Schedule A) for each business day of the Fund during such payment period at the annual rate set forth in Schedule A as applied to the average net asset value of the shares of such Fund purchased or acquired through exchange on or after the Plan Calculation Date shown for such Fund on Schedule A. Fees calculated in this manner shall be paid to you only if your firm is the dealer of record at the close of business on the last business day of the applicable payment period, for the account in which such shares are held (the "Subject Shares"). In cases where Distributors has advanced payment to you of the first year's fee for shares sold at net asset value and subject to a contingent deferred sales charge, no additional payments will be made to you during the first year the Subject Shares are held.
3. The total of the fees calculated for all of the Funds listed on Schedule A for any period with respect to which calculations are made shall be paid to you within 45 days after the close of such period.
03/31/00
Shareholder Service Agreement 2
4. We reserve the right to withhold payment with respect to the Subject Shares purchased by you and redeemed or repurchased by the Fund or by us as Agent within seven (7) business days after the date of our confirmation of such purchase. We reserve the right at any time to impose minimum fee payment requirements before any periodic payments will be made to you hereunder.
5. This Agreement and Schedule A does not require any broker-dealer to provide transfer agency and recordkeeping related services as nominee for its customers.
6. You shall furnish us and the Funds with such information as shall reasonably be requested either by the directors of the Funds or by us with respect to the fees paid to you pursuant to this Agreement.
7. We shall furnish the directors of the Funds, for their review on a quarterly basis, a written report of the amounts expended under the Plan by us and the purposes for which such expenditures were made.
8. Neither you nor any of your employees or agents are authorized to make any representation concerning shares of the Funds except those contained in the then current Prospectus or Statement of Additional Information for the Funds, and you shall have no authority to act as agent for the Funds or for Distributors.
9. We may enter into other similar Shareholder Service Agreements with any other person without your consent.
10. This Agreement may be amended at any time without your consent by Distributors mailing a copy of an amendment to you at address set forth below. Such amendment shall become effective on the date specified in such amendment unless you elect to terminate this Agreement within thirty (30) days of your receipt of such amendment.
11. This Agreement may be terminated with respect to any Fund at any time without payment of any penalty by the vote of a majority of the directors of such Fund who are Dis-interested Directors or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Selected Dealer Agreement between your firm and us or the Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
12. The provisions of the Distribution Agreement between any Fund and us, insofar as they relate to the Plan, are incorporated herein by reference. This Agreement shall become effective upon execution and delivery hereof and shall continue in full force and effect as long as the continuance of the Plan and this related Agreement are approved at least annually by a vote of the directors, including a majority of the Dis-interested Directors, cast in person at a meeting called for the purpose of voting thereon. All communications to us should be sent to the address of Distributors as shown at the bottom of this Agreement. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below.
03/31/00
Shareholder Service Agreement 3
13. You represent that you provide to your customers who own shares of the Funds personal services as defined from time to time in applicable regulations of the National Association of Securities Dealers, Inc., and that you will continue to accept payments under this Agreement only so long as you provide such services.
14. This Agreement shall be construed in accordance with the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By
------------------------------- ----------------------------------
Signature
-------------------------------------
Print Name Title
-------------------------------------
Dealer's Name
-------------------------------------
Address
-------------------------------------
City State Zip
-------------------------------------
Telephone
|
Please sign both copies and return one copy of each to:
A I M Distributors, Inc. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173
03/31/00
Shareholder Service Agreement 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Basic Balanced Fund A Shares 0.25 September 28, 2001
AIM Basic Balanced Fund B Shares 0.25 September 28, 2001
AIM Basic Balanced Fund C Shares 1.00** September 28, 2001
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM Dent Demographic Trends Fund A Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund B Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund C Shares 1.00** June 7, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Emerging Growth Fund A Shares 0.25 March 31, 2000
AIM Emerging Growth Fund B Shares 0.25 March 31, 2000
AIM Emerging Growth Fund C Shares 1.00** March 31, 2000
AIM Euroland Growth Fund A Shares 0.25 May 29, 1998
AIM Euroland Growth Fund B Shares 0.25 May 29, 1998
AIM Euroland Growth Fund C Shares 1.00** May 3, 1999
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM European Small Company Fund A Shares 0.25 August 31, 2000
AIM European Small Company Fund B Shares 0.25 August 31, 2000
AIM European Small Company Fund C Shares 1.00** August 31, 2000
09/13/01
|
Shareholder Service Agreement 5
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Floating Rate Fund B Shares 0.25*** April 3, 2000
AIM Floating Rate Fund C Shares 0.50** April 3, 2000
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Biotech Fund A Shares 0.25 December __, 2001
AIM Global Biotech Fund B Shares 0.25 December __, 2001
AIM Global Biotech Fund C Shares 1.00** December __, 2001
AIM Global Energy Fund A Shares 0.40** May 29, 1998
AIM Global Energy Fund B Shares 0.25 May 29, 1998
AIM Global Energy Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Growth Fund A Shares 0.50** September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Global Income Fund A Shares 0.50** September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications and
Technology Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications and
Technology Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications and
Technology Fund C Shares 1.00** March 1, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
09/13/01
|
Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM International Emerging Growth Fund A Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund B Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund C Shares 1.00** August 31, 2000
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM International Value Fund A Shares 0.25 August 4, 1997
AIM International Value Fund B Shares 0.25 March 3, 1998
AIM International Value Fund C Shares 1.00** August 4, 1997
AIM Large Cap Basic Value Fund A Shares 0.25 July 15, 1999
AIM Large Cap Basic Value Fund B Shares 0.25 August 1, 2000
AIM Large Cap Basic Value Fund C Shares 1.00** August 1, 2000
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 April 5, 1999
AIM Large Cap Growth Fund C Shares 1.00** April 5, 1999
AIM Large Cap Opportunities Fund A Shares(1) 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares(1) 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares(1) 1.00** March 31, 2000
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Mid Cap Growth Fund A Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund B Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund C Shares 1.00** November 1, 1999
AIM Mid Cap Opportunities Fund A Shares(1) 0.25 December 30, 1998
AIM Mid Cap Opportunities Fund B Shares(1) 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares(1) 1.00** November 12, 1999
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM New Technology Fund A Shares 0.25 August 31, 2000
AIM New Technology Fund B Shares 0.25 August 31, 2000
AIM New Technology Fund C Shares 1.00** August 31, 2000
AIM Real Estate Fund A Shares 0.25 August 4, 1997
AIM Real Estate Fund B Shares 0.25 March 3, 1998
AIM Real Estate Fund C Shares 1.00** August 4, 1997
AIM Select Equity Fund A Shares 0.25 July 1, 1992
AIM Select Equity Fund B Shares 0.25 September 1,1993
AIM Select Equity Fund C Shares 1.00** August 4, 1997
AIM Small Cap Equity Fund A Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund B Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund C Shares 1.00** August 31, 2000
---------------------
|
(1) AIM Large Cap Opportunities Fund, AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
09/13/01
Shareholder Service Agreement 7
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Opportunities Fund A Shares(1) 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares(1) 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares(1) 1.00** December 30, 1998
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Total Return Bond Fund A Shares 0.25 December __, 2001
AIM Total Return Bond Fund B Shares 0.25 December __, 2001
AIM Total Return Bond Fund C Shares 1.00** December __, 2001
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Value II Fund A Shares 0.25 August 31, 2000
AIM Value II Fund B Shares 0.25 August 31, 2000
AIM Value II Fund C Shares 1.00** August 31, 2000
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
AIM Worldwide Spectrum Fund A Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund B Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund C Shares 1.00** December 29, 2000
|
*Frequency of Payments: Quarterly, where Class A share payments begin immediately (unless your customer purchases at net asset value and you receive a commission, in which case it will begin after an initial 12-month holding period) and Class B and C share payments begin after an initial 12 month holding period. Where the broker dealer or financial institution waives, pursuant to the terms of the prospectus, the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder is paid as an asset-based sales charge, as those terms are defined under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other service provider for the first year with respect to sales of $1 million or more, at no load, in cases where A I M Distributors, Inc. has advanced the service fee to the dealer, bank or other service provider.
***Based on number of years outstanding. First year - 0.00%; Second year - 0.10%; Third year - 0.15%; Fourth year - 0.20%; Fifth and following years - 0.25%.
(1) AIM Large Cap Opportunities Fund, AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
09/13/01
EXHIBIT m(4)
[AIM LOGO APPEARS HERE] BANK SHAREHOLDER
A I M Distributors, Inc. SERVICE AGREEMENT
We desire to enter into an Agreement with A I M Distributors, Inc. (the "Company") acting as agent for the "AIM Funds", for servicing of our agency clients who are shareholders of, and the administration of such shareholder accounts in the shares of the AIM Funds (hereinafter referred to as the "Shares"). Subject to the Company's acceptance of this Agreement, the terms and conditions of this Agreement shall be as follows:
1. We shall provide continuing personal shareholder and administration services for holders of the Shares who are also our clients. Such services to our clients may include, without limitation, some or all of the following: answering shareholder inquires regarding the Shares and the AIM Funds; performing subaccounting; establishing and maintaining shareholder accounts and records; processing and bunching customer purchase and redemption transactions; providing periodic statements showing a shareholder's account balance and the integration of such statements with those of other transactions and balances in the shareholder's other accounts serviced by us; forwarding applicable AIM Funds prospectuses, proxy statements, reports and notices to our clients who are holders of Shares; and such other administrative services as you reasonably may request, to the extent we are permitted by applicable statute, rule or regulations to provide such services. We represent that we shall accept fees hereunder only so long as we continue to provide personal shareholder services to our clients.
2. Shares purchased by us as agents for our clients will be registered (choose one) (in our name or in the name of our nominee) (in the names of our clients). The client will be the beneficial owner of the Shares purchased and held by us in accordance with the client's instructions and the client may exercise all applicable rights of a holder of such Shares. We agree to transmit to the AIM Funds' transfer agent in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client any proxy statements, periodic shareholder reports and other communications received form the Company by us on behalf of our clients. The Company agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required by applicable law or regulation. We agree to transfer record ownership of a client's Shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client.
3. Within three (3) business days of placing a purchase order we agree to send
(i) a cashiers check to the Company, or (ii) a wire transfer to the AIM
Funds' transfer agent, in an amount equal to the amount of all purchase
orders placed by us on behalf of our clients and accepted by the Company.
4. We agree to make available to the Company, upon the Company's request, such information relating to our clients who are beneficial owners of Shares and their transactions in such Shares as may be required by applicable laws and regulations or as may be reasonably requested by the Company. The names of our customers shall remain our sole property and shall not be used by
03/31/00
Bank Shareholder Service Agreement Page 2
the Company for any other purpose except as needed for servicing and information mailings in the normal course of business to holders of the Shares.
5. We shall provide such facilities and personnel (which may be all or any part of the facilities currently used in our business, or all or any personnel employed by us) as may be necessary or beneficial in carrying out the purposes of this Agreement.
6. Except as may be provided in a separate written agreement between the Company and us, neither we nor any of our employees or agents are authorized to assist in distribution of any of the AIM Funds' shares except those contained in the then current Prospectus applicable to the Shares; and we shall have no authority to act as agent for the Company or the AIM Funds. Neither the AIM Funds, A I M Advisors, Inc. nor A I M Distributors, Inc. will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients.
7. In consideration of the services and facilities described herein, we shall receive from the Company on behalf of the AIM Funds an annual service fee, payable at such intervals as may be set forth in Schedule A hereto, of a percentage of the aggregate average net asset value of the Shares owned beneficially by our clients during each payment period, as set forth in Schedule A hereto, which may be amended from time to time by the Company. We understand that this Agreement and the payment of such service fees has been authorized and approved by the Boards of Directors/Trustees of the AIM Funds, and is subject to limitations imposed by the National Association of Securities Dealers, Inc. In cases where the Company has advanced payments to us of the first year's fee for shares sold with a contingent deferred sales charge, no payments will be made to us during the first year the subject Shares are held.
8. The AIM Funds reserve the right, at their discretion and without notice, to suspend the sale of any Shares or withdraw the sale of Shares.
9. We understand that the Company reserves the right to amend this Agreement or Schedule A hereto at any time without our consent by mailing a copy of an amendment to us at the address set forth below. Such amendment shall become effective on the date specified in such amendment unless we elect to terminate this Agreement within thirty (30) days of our receipt of such amendment.
10. This Agreement may be terminated at any time by the Company on not less than 15 days' written notice to us at our principal place of business. We, on 15 days' written notice addressed to the Company at its principal place of business, may terminate this Agreement, said termination to become effective on the date of mailing notice to Company of such termination. The Company's failure to terminate for any cause shall not constitute a waiver of the Company's right to terminate at a later date for any such cause. This Agreement shall terminate automatically in the event of its assignment, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the Investment Company Act of 1940, as amended.
11. All communications to the Company shall be sent to it at Eleven Greenway Plaza, Suite 100, Houston, Texas, 77046-1173. Any notice to us shall be duly given if mailed or telegraphed to us at this address shown on this Agreement.
03/31/00
Bank Shareholder Service Agreement Page 3
12. This Agreement shall become effective as of the date when it is executed and dated below by the Company. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:X
---------------------------- ----------------------------------------
Signature
----------------------------------------
Print Name Title
----------------------------------------
Dealer's Name
----------------------------------------
Address
----------------------------------------
City State Zip
|
Please sign both copies and return one copy of each to:
03/31/00
Bank Shareholder Service Agreement Page 4
SCHEDULE "A" TO
BANK SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Basic Balanced Fund A Shares 0.25 September 28, 2001
AIM Basic Balanced Fund B Shares 0.25 September 28, 2001
AIM Basic Balanced Fund C Shares 1.00** September 28, 2001
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM Dent Demographic Trends Fund A Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund B Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund C Shares 1.00** June 7, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Emerging Growth Fund A Shares 0.25 March 31, 2000
AIM Emerging Growth Fund B Shares 0.25 March 31, 2000
AIM Emerging Growth Fund C Shares 1.00** March 31, 2000
AIM Euroland Growth Fund A Shares 0.25 May 29, 1998
AIM Euroland Growth Fund B Shares 0.25 May 29, 1998
AIM Euroland Growth Fund C Shares 1.00** May 3, 1999
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM European Small Company Fund A Shares 0.25 August 31, 2000
AIM European Small Company Fund B Shares 0.25 August 31, 2000
AIM European Small Company Fund C Shares 1.00** August 31, 2000
09/01
|
Bank Shareholder Service Agreement Page 5
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Floating Rate Fund B Shares 0.25*** April 3, 2000
AIM Floating Rate Fund C Shares 0.50** April 3, 2000
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Biotech Fund A Shares 0.25 December __, 2001
AIM Global Biotech Fund B Shares 0.25 December __, 2001
AIM Global Biotech Fund C Shares 1.00** December __, 2001
AIM Global Energy Fund A Shares 0.40** May 29, 1998
AIM Global Energy Fund B Shares 0.25 May 29, 1998
AIM Global Energy Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Growth Fund A Shares 0.50** September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Global Income Fund A Shares 0.50** September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications and
Technology Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications and
Technology Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications and
Technology Fund C Shares 1.00** March 1, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
|
09/01
Bank Shareholder Service Agreement Page 6
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Emerging Growth Fund A Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund B Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund C Shares 1.00** August 31, 2000
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM International Value Fund A Shares 0.25 August 4, 1997
AIM International Value Fund B Shares 0.25 March 3, 1998
AIM International Value Fund C Shares 1.00** August 4, 1997
AIM Large Cap Basic Value Fund A Shares 0.25 July 15, 1999
AIM Large Cap Basic Value Fund B Shares 0.25 August 1, 2000
AIM Large Cap Basic Value Fund C Shares 1.00** August 1, 2000
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 April 5, 1999
AIM Large Cap Growth Fund C Shares 1.00** April 5, 1999
AIM Large Cap Opportunities Fund A Shares(1) 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares(1) 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares(1) 1.00** March 31, 2000
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Mid Cap Growth Fund A Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund B Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund C Shares 1.00** November 1, 1999
AIM Mid Cap Opportunities Fund A Shares(1) 0.25 December 30 1998
AIM Mid Cap Opportunities Fund B Shares(1) 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares(1) 1.00** November 12, 1999
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM New Technology Fund A Shares 0.25 August 31, 2000
AIM New Technology Fund B Shares 0.25 August 31, 2000
AIM New Technology Fund C Shares 1.00** August 31, 2000
AIM Real Estate Fund A Shares 0.25 August 4, 1997
AIM Real Estate Fund B Shares 0.25 March 3, 1998
AIM Real Estate Fund C Shares 1.00** August 4, 1997
-------
|
(1) AIM Large Cap Opportunities Fund, AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
09/01
Bank Shareholder Service Agreement Page 7
Fund Fee Rate* Plan Calculation Date
--------------------------------------------------------------------------------
AIM Select Equity Fund A Shares 0.25 July 1, 1992
AIM Select Equity Fund B Shares 0.25 September 1,1993
AIM Select Equity Fund C Shares 1.00** August 4, 1997
AIM Small Cap Equity Fund A Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund B Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund C Shares 1.00** August 31, 2000
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Opportunities Fund A Shares(1 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares(1) 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares(1) 1.00** December 30, 1998
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29,1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Total Return Bond Fund A Shares 0.25 December __, 2001
AIM Total Return Bond Fund B Shares 0.25 December __, 2001
AIM Total Return Bond Fund C Shares 1.00** December __, 2001
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Value II Fund A Shares 0.25 August 31, 2000
AIM Value II Fund B Shares 0.25 August 31, 2000
AIM Value II Fund C Shares 1.00** August 31, 2000
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
AIM Worldwide Spectrum Fund A Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund B Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund C Shares 1.00** December 29, 2000
|
*Frequency of Payments: Quarterly, B and C share payments begin after an initial 12 month holding period. Where the broker dealer or financial institution waives, pursuant to the terms of the prospectus, the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder is paid as an asset-based sales charge, as those terms are defined under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other service provider for the first year with respect to sales of $1 million or more, at no load, in cases where A I M Distributors, Inc. has advanced the service fee to the dealer, bank or other service provider.
***Based on number of years outstanding. First year - 0.00%; Second year - 0,10%; Third year - 0.15%; Fourth year - 0.20%; Fifth and following years - 0.25%.
09/01
EXHIBIT m(5)
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
This Variable Group Annuity Contractholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") under a Distribution Plan adopted pursuant to said Rule. This Agreement, being made between A I M Distributors, Inc. ("Distributors") and the authorized insurance company, sets forth the terms for the provision of specialized services to holders of Group Annuity Contracts (the "Contracts") issued by insurance company separate accounts to employers for their pension, stock bonus or profit-sharing plans qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Plans"), where amounts contributed under such plans are invested pursuant to the Contracts in shares of one or more of the series portfolios of the AIM - managed mutual funds (or designated classes of such funds) (the "Fund(s)") listed in Appendix A, attached hereto, which may be amended from time to time by Distributors. Distributors' role in these arrangements will be solely as agent for the Funds.
1. To the extent you provide specialized services to holders of Contracts who have selected the Fund(s) for purposes of their Group Annuity Contracts ("Contractholders") you will receive payment pursuant to the distribution plan adopted by each of the Funds. Such services to Group Contractholders may include, without limitation, some or all of the following: answering inquiries regarding the Fund(s); performing sub-accounting for Contractholders; establishing and maintaining Contractholder accounts and records; processing and bunching purchase and redemption transactions; providing periodic statements of Contract account balances; forwarding such reports and notices to Contractholders relative to the Fund(s) as we deem necessary; generally, facilitating communications with Contractholders concerning investments in the Fund(s) on behalf of Plan participants; and performing such other administrative services as we deem to be necessary or desirable, to the extent permitted by applicable statute, rule or regulation. You represent that you will accept a fee hereunder only so long as you continue to provide personal services to Contractholders.
2. Shares of the Fund(s) purchased by you will be registered in your name and you may exercise all applicable rights of a holder of such Shares. You agree to transmit to the Funds, in a timely manner, all purchase orders and redemption requests and to forward to each of your Contractholders as you deem necessary, periodic shareholder reports and other communications received from the Funds.
3. You agree to wire to the Fund(s)' custodian bank, within three (3) business days of the placing of a purchase order, federal funds in an amount equal to the amount of all purchase orders placed by you on behalf of your Contractholders and accepted by the Funds (net of any redemption orders placed by you on behalf of your Contractholders).
4. You shall provide such facilities and personnel (which may be all or any part of the facilities currently used in your business, or all or any personnel employed by you) as may be necessary or beneficial in carrying out the purposes of this Agreement.
5. Except as may be provided in a separate written agreement between Distributors and you, neither you nor any of your employees or agents are authorized to assist in the distribution of any shares of the Fund(s) to the public or to make any representations to Contractholders concerning the Fund(s) except those contained in the then current prospectus applicable to the
Fund(s). Neither the Funds, A I M Advisors, Inc. ("Advisors"), Distributors nor any of their affiliates will be a party, nor will they be represented as a party, to any Group Annuity Contract agreement between you and the Contractholders nor shall the Funds, Advisors, Distributors or any of their affiliates participate, directly or indirectly, in any compensation that you may receive from Contractholders and their Plans' participants.
6. In consideration of the services and facilities described herein, you shall receive an annual fee, payable quarterly, as set forth in Appendix A, of the aggregate average net asset value of shares of the Fund(s) owned by you during each quarterly period for the benefit of Contractholders' Plans' participants. You understand that this Agreement and the payment of such distribution fees have been authorized and approved by the Boards of Directors/Trustees of the Fund(s). You further understand that this Agreement and the fees payable hereunder are subject to limitations imposed by applicable rules of the National Association of Securities Dealers, Inc.
7. The Funds reserve the right, at their discretion and without notice, to suspend the sale of their shares or to withdraw the sale of their shares.
8. This Agreement may be amended at any time without your consent by mailing a copy of an amendment to you at the address set forth below. Such amendment shall become effective on the date set forth in such amendment unless you terminate this Agreement as set forth below within thirty (30) days of your receipt of such amendment.
9. This Agreement may be terminated at any time by us on not less than 60 days' written notice to you at your principal place of business. You may terminate this Agreement on 60 days' written notice addressed to us at our principal place of business. We may also terminate this Agreement for cause on violation by you of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to you of such termination. Our failure to terminate for any cause shall not constitute a waiver of our right to terminate at a later date for any such cause.
This Agreement may be terminated with respect to any Fund at any time without payment of any penalty by the vote of a majority of the directors/trustees of such Fund who are Dis-interested Directors/Trustees, as defined in the 1940 Act, or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Fund's Distribution Agreement with us, the Selected Dealer Agreement between your firm and us or the Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
10. All communications to us shall be sent to 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any notice to you shall be duly given if mailed, telegraphed or sent by facsimile to you at the address shown on this Agreement.
11. This Agreement shall become effective as of the date when it is executed and dated below by us. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
------------------------------ ---------------------------------
Signature
------------------------------------
|
Print Name
The undersigned agrees to abide by the foregoing terms and conditions.
Date:
------------------------------ ------------------------------------
(Firm Name)
------------------------------------
(Address)
------------------------------------
(City) / (State) / (County)
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
|
APPENDIX A
TO
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
FUND FEE RATE*
---- ---------
AIM Advisor Funds (Class A and Class C Shares)
----------------------------------------------
AIM International Value Fund .25%
AIM Real Estate Fund .25%
AIM Equity Funds (Class A and Class C Shares)
---------------------------------------------
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Dent Demographic Trends Fund .25%
AIM Emerging Growth Fund .25%
AIM Large Cap Basic Value Fund .25%
AIM Large Cap Growth Fund .25%
AIM Mid Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A and Class C Shares)
--------------------------------------------
AIM Balanced Fund .25%
AIM Basic Balanced Fund .25%
AIM European Small Company Fund .25%
AIM Global Utilities Fund .25%
AIM International Emerging Growth Fund .25%
AIM New Technology Fund .25%
AIM Select Equity Fund .25%
AIM Small Cap Equity Fund .25%
AIM Value Fund .25%
AIM Value II Fund .25%
AIM Worldwide Spectrum Fund .25%
AIM Growth Series (Class A and Class C Shares)
----------------------------------------------
AIM Basic Value Fund .25%
AIM Euroland Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM Small Cap Growth Fund .25%
|
AIM International Funds, Inc (Class A and Class C Shares)
---------------------------------------------------------
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Funds (Class A and Class C Shares)
-------------------------------------------------
AIM Developing Markets Fund .25%
AIM Global Biotech Fund .25%
AIM Global Energy Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Telecommunications and Technology Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A and Class C Shares)
------------------------------------------------------------
AIM Limited Maturity Treasury Fund(1) .15%
AIM High Yield Fund II .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Total Return Bond Fund .25%
AIM Series Trust (Class A and Class C Shares)
---------------------------------------------
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A and Class C Shares)
------------------------------------------------------------
AIM Small Cap Opportunities Fund(2) .25%
AIM Large Cap Opportunities Fund(2) .25%
AIM Mid Cap Opportunities Fund(2) .25%
------------------
|
(1) AIM Limited Maturity Treasury Fund offers Class A Shares only.
(2) AIM Large Cap Opportunities Fund, AIM Mid Cap Opportunities Fund and AIM
Small Cap Opportunities Fund are closed to new investors.
EXHIBIT m(6)
AGENCY PRICING AGREEMENT
(THE AIM FAMILY OF FUNDS--Registered Trademark--)
This Agreement is entered into as of the of ___, ______________ 2000, between __________________________________________________ (the "Plan Provider") and A I M Distributors, Inc. (the "Distributor").
RECITAL
Plan Provider acts as a trustee and/or servicing agent for defined contribution plans and/or deferred compensation plans (the "Plans") and invests and reinvests such Plans' assets as specified by an investment advisor, sponsor or administrative committee of the Plan (a "Plan Representative") generally upon the direction of Plan beneficiaries (the "Participants").
Plan Provider and Distributor desire to facilitate the purchase and redemption of shares (the "Shares") of the funds listed on Exhibit A hereto which may be amended from time to time by Distributor (the "Fund" or "Funds"), registered investment companies distributed by Distributor, on behalf of the Plans, through one or more accounts (not to exceed one per Plan) in each Fund (individually an "Account" and collectively the "Accounts"), subject to the terms and conditions of this Agreement. Distributor shall, on behalf of the Funds, pay to Plan Provider a fee in accordance with Exhibit A hereto.
AGREEMENT
1. SERVICES
Plan Provider shall provide shareholder and administration services for the Plans and/or their Participants, including, without limitation: answering questions about the Funds; assisting in changing dividend options, account designations and addresses; establishing and maintaining shareholder accounts and records; and assisting in processing purchase and redemption transactions (the "Services"). Plan Provider shall comply with all applicable laws, rules and regulations, including requirements regarding prospectus delivery and maintenance and preservation of records. To the extent allowed by law, Plan Provider shall provide Distributor with copies of all records that Distributor may reasonably request. Distributor or its affiliate will recognize each Plan as an unallocated account in each Fund, and will not maintain separate accounts in each Fund for each Participant. Except to the extent provided in Section 3, all Services performed by Plan Provider shall be as an independent contractor and not as an employee or agent of Distributor or any of the Funds. Plan Provider and Plan Representatives, and not Distributor, shall take all necessary action so that the transactions contemplated by this Agreement shall not be "Prohibited Transactions" under section 406 of the Employee Retirement Income Security Act of 1974, or section 4975 of the Internal Revenue Code.
2. PRICING INFORMATION
Each Fund or its designee will furnish Plan Provider on each business day that the New York Stock Exchange is open for business ("Business Day"), with (i) net asset value
information as of the close of trading (currently 4:00 p.m. Eastern Time) on the New York Stock Exchange or as at such later times at which a Fund's net asset value is calculated as specified in such Fund's prospectus ("Close of Trading"), (ii) dividend and capital gains information as it becomes available, and (iii) in the case of income Funds, the daily accrual or interest rate factor (mil rate). The Funds shall use their best efforts to provide such information to Plan Provider by 6:00 p.m. Central Time on the same Business Day.
Distributor or its affiliate will provide Plan Provider (a) daily confirmations of Account activity within five Business Days after each day on which a purchase or redemption of Shares is effected for the particular Account, (b) if requested by Plan Provider, quarterly statements detailing activity in each Account within fifteen Business Days after the end of each quarter, and (c) such other reports as may be reasonably requested by Plan Provider.
3. ORDERS AND SETTLEMENT
If Plan Provider receives instructions in proper form from Participants or Plan Representatives before the Close of Trading on a Business Day, Plan Provider will process such instructions that same evening. On the next Business Day, Plan Provider will transmit orders for net purchases or redemptions of Shares to Distributor or its designee by 9:00 a.m. Central Time and wire payment for net purchases by 2:00 p.m. Central Time. Distributor or its affiliate will wire payment for net redemptions on the Business Day following the day the order is executed for the Accounts. In doing so, Plan Provider will be considered the Funds' agent, and Shares will be purchased and redeemed as of the Business Day on which Plan Provider receives the instructions. Plan Provider will record time and date of receipt of instructions and will, upon request, provide such instructions and other records relating to the Services to Distributor's auditors. If Plan Provider receives instructions in proper form after the Close of Trading on a Business Day, Plan Provider will treat the instructions as if received on the next Business Day.
4. REPRESENTATIONS WITH RESPECT TO THE DISTRIBUTOR AND THE FUNDS
Plan Provider and its agents shall limit representations concerning a Fund or Shares to those contained in the then current prospectus of such Fund, in current sales literature furnished by Distributor to Plan Provider, in publicly available databases, such as those databases created by Standard & Poor's and Morningstar, and in current sales literature created by Plan Provider and submitted to and approved in writing by Distributor prior to its use.
5. USE OF NAMES
Plan Provider and its affiliates will not, without the prior written approval of Distributor, make public references to A I M Management Group Inc. or any of its subsidiaries, or to the Funds. For purposes of this provision, the public does not include Plan Providers' representatives who are actively engaged in promoting the Funds. Any brochure or other communication to the public that mentions the Funds shall be submitted to Distributor for written approval prior to use. Plan Provider shall provide copies of its regulatory filings that include any reference to A I M Management Group Inc. or its subsidiaries or the Funds to Distributor. If Plan Provider or its affiliates should make unauthorized references or representations, Plan Provider agrees to indemnify and hold harmless the Funds, A I M Management Group Inc.
and its subsidiaries from any claims, losses, expenses or liability arising in any way out of or connected in any way with such references or representations.
6. TERMINATION
(a) This Agreement may be terminated with respect to any Fund at any time without any penalty by the vote of a majority of the directors of such Fund who are "disinterested directors", as that term is defined in the Investment Company Act of 1940, as amended (the "1940 Act"), or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Fund's Distribution Plan, or any related agreement thereunder, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
(b) Either party may terminate this Agreement upon ninety (90) days' prior written notice to the other party at the address specified below.
7. INDEMNIFICATION
(a) Plan Provider agrees to indemnify and hold harmless the Distributor, its affiliates, the Funds, the Funds' investment advisors, and each of their directors, officers, employees, agents and each person, if any, who controls them within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), (the "Distributor Indemnitees") against any losses, claims, damages, liabilities or expenses to which a Distributor Indemnitee may become subject insofar as those losses, claims, damages, liabilities or expenses or actions in respect thereof, arise out of or are based upon (i) Plan Provider's negligence or willful misconduct in performing the Services, (ii) any breach by Plan Provider of any material provision of this Agreement, or (iii) any breach by Plan Provider of a representation, warranty or covenant made in this Agreement; and Plan Provider will reimburse the Distributor Indemnitee for any legal or other expenses reasonably incurred, as incurred, by them in connection with investigating or defending such loss, claim or action. This indemnity agreement will be in addition to any liability which Plan Provider may otherwise have.
(b) Distributor agrees to indemnify and hold harmless Plan Provider and its affiliates, and each of its directors, officers, employees, agents and each person, if any, who controls Plan Provider within the meaning of the Securities Act (the "Plan Provider Indemnitees") against any losses, claims, damages, liabilities or expenses to which a Plan Provider Indemnitee may become subject insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or Prospectus of a Fund, or the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make statements therein not misleading, (ii) any breach by Distributor of any material provision of this Agreement, (iii) Distributor's negligence or willful misconduct in carrying out its duties and responsibilities under this Agreement, or (iv) any breach by Distributor of a representation, warranty or covenant made in this Agreement; and Distributor will reimburse the Plan Provider Indemnitees for any
legal or other expenses reasonably incurred, as incurred, by them, in connection with investigating or defending any such loss, claim or action. This indemnity agreement will be in addition to any liability which Distributor may otherwise have.
(c) If any third party threatens to commence or commences any action for which one party (the "Indemnifying Party") may be required to indemnify another person hereunder (the "Indemnified Party"), the Indemnified Party shall promptly give notice thereof to the Indemnifying Party. The Indemnifying Party shall be entitled, at its own expense and without limiting its obligations to indemnify the Indemnified Party, to assume control of the defense of such action with counsel selected by the Indemnifying Party which counsel shall be reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the control of the defense, the Indemnified Party may participate in the defense of such claim at its own expense. Without the prior written consent of the Indemnified Party, which consent shall not be withheld unreasonably, the Indemnifying Party may not settle or compromise the liability of the Indemnified Party in such action or consent to or permit the entry of any judgment in respect thereof unless in connection with such settlement, compromise or consent each Indemnified Party receives from such claimant an unconditional release from all liability in respect of such claim.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas applicable to agreements fully executed and to be performed therein.
9. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each party represents that it is free to enter into this Agreement and that by doing so it will not breach or otherwise impair any other agreement or understanding with any other person, corporation or other entity. Each party represents that it has full power and authority under applicable law, and has taken all action necessary to enter into and perform this Agreement and the person executing this Agreement on its behalf is duly authorized and empowered to execute and deliver this Agreement. Additionally, each party represents that this Agreement, when executed and delivered, shall constitute its valid, legal and binding obligation, enforceable in accordance with its terms.
Plan Provider further represents, warrants, and covenants that:
(a) it is registered as a transfer agent pursuant to Section 17A of the Securities Exchange Act of 1934, as amended (the "1934 Act"), or is not required to be registered as such;
(b) the arrangements provided for in this Agreement will be disclosed to the Plan Representatives; and
(c) it is registered as a broker-dealer under the 1934 Act or any applicable state securities laws, or, including as a result of entering into and performing the services set forth in this Agreement, is not required to be registered as such.
Distributor further represents, warrants and covenants, that:
(a) it is registered as a broker-dealer under the 1934 Act and any applicable state securities laws; and
(b) the Funds' advisors are registered as investment advisors under the Investment Advisers Act of 1940, the Funds are registered as investment companies under the 1940 Act and Fund Shares are registered under the Securities Act.
10. MODIFICATION
This Agreement and Exhibit A may be amended at any time by Distributor without Plan Provider's consent by Distributor mailing a copy of an amendment to Plan Provider at the address set forth below. Such amendment shall become effective thirty (30) days from the date of mailing unless this Agreement is terminated by the Plan Provider within such thirty (30) days.
11. ASSIGNMENT
This Agreement shall not be assigned by a party hereto, without the prior written consent of the other parties hereto, except that a party may assign this Agreement to an affiliate having the same ultimate ownership as the assigning party without such consent.
12. SURVIVAL
The provisions of Sections 1, 5 and 7 shall survive termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their duly authorized officers as of the date first above written.
A I M DISTRIBUTORS, INC.
(DISTRIBUTOR)
EXHIBIT A
For the term of this Agreement, Distributor, or its affiliates, shall pay Plan Provider the following amounts for each of the following Funds with respect to the average daily net asset value of the Class A Shares of the Plans' balances for the prior quarter:
FUND ANNUAL FEE
---- ----------
AIM Advisor Funds (Class A Shares Only)
AIM International Value Fund .25%
AIM Real Estate Fund .25%
AIM Equity Funds (Class A Shares Only)
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Dent Demographic Trends Fund .25%
AIM Emerging Growth Fund .25%
AIM Large Cap Basic Value Fund .25%
AIM Large Cap Growth Fund .25%
AIM Mid Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Floating Rate Fund (Class C Shares Only) Up to .25%
AIM Funds Group (Class A Shares Only)
AIM Balanced Fund .25%
AIM Basic Balanced Fund .25%
AIM European Small Company Fund .25%
AIM Global Utilities Fund .25%
AIM International Emerging Growth Fund .25%
AIM New Technology Fund .25%
AIM Select Equity Fund .25%
AIM Small Cap Equity Fund .25%
AIM Value Fund .25%
AIM Value II Fund .25%
AIM Worldwide Spectrum Fund .25%
AIM Growth Series (Class A Shares Only)
AIM Basic Value Fund .25%
AIM Euroland Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM Small Cap Growth Fund .25%
|
09/01
AIM International Funds, Inc. (Class A Shares Only)
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Funds (Class A Shares Only)
AIM Developing Markets Fund .25%
AIM Global Biotech Fund .25%
AIM Global Energy Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Telecommunications and Technology Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A Shares Only)
AIM High Yield Fund II .25%
AIM Limited Maturity Treasury Fund(1) .15%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Total Return Bond Fund .25%
AIM Series Trust (Class A Shares Only)
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A Shares Only)
AIM Small Cap Opportunities Fund(2) .25%
AIM Large Cap Opportunities Fund(2) .25%
AIM Mid Cap Opportunities Fund(2) .25%
|
Distributor or its affiliates shall calculate the amount of quarterly payment and shall deliver to Plan Provider a quarterly statement showing the calculation of the quarterly amounts payable to Plan Provider. Distributor reserves the right at any time to impose minimum fee payment requirements before any quarterly payments will be made to Plan Provider. Payment to Plan Provider shall occur within 30 days following the end of each quarter. All parties agree that the payments referred to herein are for record keeping and administrative services only and are not for legal, investment advisory or distribution services.
Minimum Payments: $50 (with respect to all Funds in the aggregate.)
09/01
EXHIBIT m(7)
[AIM LOGO APPEARS HERE] A I M DISTRIBUTORS, INC.
A I M Distributors, Inc. SHAREHOLDER SERVICE AGREEMENT
(BANK TRUST DEPARTMENTS)
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM Distributors") as agent on behalf of the funds listed on Schedule A hereto (the "Funds"), for the servicing of our clients who are shareholders of, and the administration of accounts in, the Funds. We understand that this Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable rules of the National Association of Securities Dealers, Inc. ("NASD"). This Agreement defines the services to be provided by us for which we are to receive payments pursuant to the Plan. The Plan and the Agreement have been approved by a majority of the directors or trustees of the applicable Fund, including a majority of directors or trustees who are not interested persons of the applicable Fund, and who have no direct or indirect financial interest in the operation of the Plan or related agreements, by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination by the directors or trustees of the applicable Fund, in the exercise of their reasonable business judgement and in light of their fiduciary duties, that there is a reasonable likelihood that the Plan will benefit the Fund and the holders of its Shares. The terms and conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services and administrative support services to our customers who may from time to time own shares of the Funds of record or beneficially, including but not limited to, forwarding sales literature, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares of the Funds and providing such other services as AIM Distributors or the customer may reasonably request, you shall pay us a fee periodically. We represent that we shall accept fees hereunder only so long as we continue to provide such personal shareholder services.
07/00
Shareholder Service Agreement Page 2
(Bank Trust Departments)
2. We agree to transmit to AIM Distributors in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client all proxy statements, periodic shareholder reports and other communications received from AIM Distributors by us relating to shares of the Funds owned by our clients. AIM Distributors, on behalf of the Funds, agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required under applicable laws or regulations.
3. We agree to make available upon AIM Distributors' request, such information relating to our clients who are beneficial owners of Fund shares and their transactions in such shares as may be required by applicable laws and regulations or as may be reasonably requested by AIM Distributors.
4. We agree to transfer record ownership of a client's Fund shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client.
5. Neither we nor any of our employees or agents are authorized to make any representation to our clients concerning the Funds except those contained in the then current prospectuses applicable to the Funds, copies of which will be supplied to us by AIM Distributors; and we shall have no authority to act as agent for any Fund or AIM Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients and neither a Fund nor AIM shall participate, directly or indirectly, in any compensation that we may receive from our clients in connection with our acting on their behalf with respect to this Agreement.
6. In consideration of the services and facilities described herein, we shall receive a maximum annual service fee and asset-based sales charge, payable monthly, as set forth on Schedule A hereto. We understand that this Agreement and the payment of such service fees and asset-based sales charge has been authorized and approved by the Board of Directors or Trustees of the applicable Fund, and that the payment of fees thereunder is subject to limitations imposed by the rules of the NASD.
7. AIM Distributors reserves the right, in its discretion and without notice, to suspend the sale of any Fund or withdraw the sale of shares of a Fund, or upon notice to us, to amend this Agreement. We agree that any order to purchase shares of the Funds placed by us after notice of any amendment to this Agreement has been sent to us shall constitute our agreement to any such amendment.
8. All communications to AIM Distributors shall be duly given if mailed to A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any notice to us shall be duly given if mailed to us at the address specified by us in this Agreement or to such other address as we shall have designated in writing to AIM Distributors.
9. This Agreement may be terminated at any time by AIM Distributors on not less than 60 days' written notice to us at our principal place of business. We, on 60 days' written notice addressed to AIM Distributors at its principal place of business, may terminate this Agreement. AIM Distributors may also terminate this Agreement for cause on violation by us of any of the provisions of this Agreement, said termination to become effective on the date of
07/00
Shareholder Service Agreement Page 3
(Bank Trust Departments)
mailing notice to us of such termination. AIM Distributors' failure to terminate for any cause shall not constitute a waiver of AIM Distributors' right to terminate at a later date for any such cause. This Agreement may be terminated with respect to any Fund at any time by the vote of a majority of the directors or trustees of such Fund who are disinterested directors or by a vote of a majority of the Fund's outstanding shares, on not less than 60 days' written notice to us at our principal place of business. This Agreement will be terminated by any act which terminates the Agreement for Purchase of Shares of The AIM Family of Funds" between us and AIM Distributors or a Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment by us, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
10. We represent that our activities on behalf of our clients and pursuant to
this Agreement either (i) are not such as to require our registration as a
broker-dealer in the state(s) in which we engage in such activities, or
(ii) we are registered as a broker-dealer in the state(s) in which we
engage in such activities. We represent that we are registered as a
broker-dealer with the NASD if required under applicable law.
11. This Agreement and the Agreement for Purchase of Shares of The AIM Family of Funds--Registered Trademark-- through Bank Trust Departments constitute the entire agreement between us and AIM Distributors and supersede all prior oral or written agreements between the parties hereto. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute the same instrument.
12. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas.
13. This Agreement shall become effective as of the date when it is executed and dated by AIM Distributors.
07/00
Shareholder Service Agreement Page 4
(Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
ACCEPTED:
A I M DISTRIBUTORS, INC.
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
07/00
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Advisor Funds
AIM International Value Fund
AIM Real Estate Fund
AIM Equity Funds
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Dent Demographic Trends Fund
AIM Emerging Growth Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Floating Rate Fund
AIM Funds Group
AIM Balanced Fund
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Equity Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund
AIM Growth Series
AIM Basic Value Fund
AIM Euroland Growth Fund
AIM Mid Cap Equity Fund
AIM Small Cap Growth Fund
|
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
09/01
Shareholder Service Agreement Page 6
(Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Global Biotech Fund
AIM Global Energy Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Telecommunications and Technology Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund(1)
AIM High Yield Fund II
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Total Return Bond Fund
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund(2)
AIM Large Cap Opportunities Fund(2)
AIM Mid Cap Opportunities Fund(2)
AIM Tax-Exempt Funds
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
09/01
[AIM LOGO APPEARS HERE] A I M DISTRIBUTORS, INC.
A I M Distributors, Inc. SHAREHOLDER SERVICE AGREEMENT
(BROKERS FOR BANK TRUST DEPARTMENTS)
|
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM Distributors") as agent on behalf of the funds listed on Schedule A hereto, which may be amended from time to time by AIM Distributors (the "Funds"), for the servicing of our clients who are shareholders of, and the administration of accounts in, the Funds. We understand that this Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable rules of the National Association of Securities Dealers, Inc. ("NASD"). This Agreement defines the services to be provided by us for which we are to receive payments pursuant to the Plan. The Plan and the Agreement have been approved by a majority of the directors or trustees of the applicable Fund, including a majority of directors or trustees who are not interested persons of the applicable Fund, and who have no direct or indirect financial interest in the operation of the Plan or related agreements, by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination by the directors or trustees of the applicable Fund, in the exercise of their reasonable business judgement and in light of their fiduciary duties, that there is a reasonable likelihood that the Plan will benefit the Fund and the holders of its Shares. The terms and conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services and administrative support services to our customers who may from time to time own shares of the Funds of record or beneficially, including but not limited to, forwarding sales literature, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares of the Funds and providing such other services as AIM Distributors or the customer may reasonably request, you shall pay us a fee periodically. We represent that
07/00
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
we shall accept fees hereunder only so long as we continue to provide such personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client all proxy statements, periodic shareholder reports and other communications received from AIM Distributors by us relating to shares of the Funds owned by our clients. AIM Distributors, on behalf of the Funds, agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required under applicable laws or regulations.
3. We agree to transfer to AIM Distributors in a timely manner as set forth in the applicable prospectus, federal funds in an amount equal to the amount of all purchase orders placed by us and accepted by AIM Distributors. In the event that AIM Distributors fails to receive such federal funds on such date (other than through the fault of AIM Distributors), we shall indemnify the applicable Fund and AIM Distributors against any expense (including overdraft charges) incurred by the applicable Fund and/or AIM Distributors as a result of the failure to receive such federal funds.
4. We agree to make available upon AIM Distributors' request, such information relating to our clients who are beneficial owners of Fund shares and their transactions in such shares as may be required by applicable laws and regulations or as may be reasonably requested by AIM Distributors.
5. We agree to transfer record ownership of a client's Fund shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client.
6. Neither we nor any of our employees or agents are authorized to make any representation to our clients concerning the Funds except those contained in the then current prospectuses applicable to the Funds, copies of which will be supplied to us by AIM Distributors; and we shall have no authority to act as agent for any Fund or AIM Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients and neither a Fund nor AIM shall participate, directly or indirectly, in any compensation that we may receive from our clients in connection with our acting on their behalf with respect to this Agreement.
7. In consideration of the services and facilities described herein, we shall receive a maximum annual service fee and asset-based sales charge, payable monthly, as set forth on Schedule A hereto. We understand that this Agreement and the payment of such service fees and asset-based sales charge has been authorized and approved by the Board of Directors or Trustees of the applicable Fund, and that the payment of fees thereunder is subject to limitations imposed by the rules of the NASD.
8. AIM Distributors reserves the right, in its discretion and without notice, to suspend the sale of any Fund or withdraw the sale of shares of a Fund, or upon notice to us, to amend this Agreement. We agree that any order to purchase shares of the Funds placed by us after notice of any amendment to this Agreement has been sent to us shall constitute our agreement to any such amendment.
07/00
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
9. All communications to AIM Distributors shall be duly given if mailed to A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. Any notice to us shall be duly given if mailed to us at the address specified by us in this Agreement or to such other address as we shall have designated in writing to AIM Distributors.
10. This Agreement may be terminated at any time by AIM Distributors on not less than 60 days' written notice to us at our principal place of business. We, on 60 days' written notice addressed to AIM Distributors at its principal place of business, may terminate this Agreement. AIM Distributors may also terminate this Agreement for cause on violation by us of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to us of such termination. AIM Distributors' failure to terminate for any cause shall not constitute a waiver of AIM Distributors' right to terminate at a later date for any such cause. This Agreement may be terminated with respect to any Fund at any time by the vote of a majority of the directors or trustees of such Fund who are disinterested directors or by a vote of a majority of the Fund's outstanding shares, on not less than 60 days' written notice to us at our principal place of business. This Agreement will be terminated by any act which terminates the Selected Dealer Agreement between us and AIM Distributors or a Fund's Distribution Plan, and in any event, shall terminate automatically in the event of its assignment by us, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
11. We represent that our activities on behalf of our clients and pursuant to
this Agreement either (i) are not such as to require our registration as a
broker-dealer in the state(s) in which we engage in such activities, or
(ii) we are registered as a broker-dealer in the state(s) in which we
engage in such activities. We represent that we are registered as a
broker-dealer with the NASD if required under applicable law.
12. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute the same instrument. This Agreement shall not relieve us or AIM Distributors from any obligations either may have under any other agreements between us.
13. This Agreement shall become effective as of the date when it is executed and dated by AIM Distributors.
07/00
Shareholder Service Agreement Page 4
(Brokers for Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
ACCEPTED:
A I M DISTRIBUTORS, INC.
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
07/00
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Advisor Funds
AIM International Value Fund
AIM Real Estate Fund
AIM Equity Funds
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Dent Demographic Trends Fund
AIM Emerging Growth Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Floating Rate Fund
AIM Funds Group
AIM Balanced Fund
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Equity Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund
AIM Growth Series
AIM Basic Value Fund
AIM Euroland Growth Fund
AIM Mid Cap Equity Fund
AIM Small Cap Growth Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
|
09/01
Shareholder Service Agreement Page 6
(Brokers for Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Global Biotech Fund
AIM Global Energy Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Telecommunications and Technology Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund(1)
AIM High Yield Fund II
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Total Return Bond Fund
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund(2)
AIM Large Cap Opportunities Fund(2)
AIM Mid Cap Opportunities Fund(2)
AIM Tax-Exempt Funds
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
09/01
EXHIBIT m(8)
[AIM LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT FOR
A I M Distributors, Inc. SHARES OF THE AIM MUTUAL FUNDS
(A I M Distributors, Inc. as Principal)
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, by each of the AIM-managed mutual funds (or designated classes of such funds) listed in Schedule A to this Agreement (the "Funds"), which may be amended from time to time by the Funds acting through A I M Distributors, Inc. ("Distributors") as the Funds' agent under a Distribution Plan (the "Plan") adopted pursuant to said Rule. This Agreement, being made between Distributors as agent for such Funds on the one hand and Distributors acting as principal on the other hand, defines the services to be provided by Distributors acting as principal for which it is to receive shareholder service payments pursuant to the Plan adopted by each of the Funds. The Plan and the Agreement have been approved by a majority of the directors of each of the Funds, including a majority of the directors who are not interested persons of such Funds, and who have no direct or indirect financial interest in the operation of the Plan or related agreements (the "Dis-interested Directors"), by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination that in the exercise of their reasonable business judgement and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit such Fund and its shareholders.
1. To the extent that Distributors, acting as principal, provides continuing personal shareholder services to Fund shareholders for whom Distributors is the broker of record, including but not limited to, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares and providing such other services as the Funds or the customer may reasonably request, Distributors as agent for the Funds, shall pay Distributors as principal a service fee (as that term is defined in NASD Conduct Rule 28-30(b)(9)), periodically or arrange for such fee to be paid to you.
2. The service fee paid with respect to each Fund will be calculated at the end of each payment period (as indicated in Schedule A) for each business day of the Fund during such payment period at the annual rate set forth in Schedule A as applied to the average net asset value of the shares of such Fund for which Distributors is broker of record and which shares were purchased or acquired through exchange on or after the Plan Calculation Date shown for such Fund on Schedule A. Fees calculated in this manner shall be paid to Distributors as principal only if Distributors is the dealer of record at the close of business on the last business day of the applicable payment period, for the account in which such shares are held (the "Subject Shares").
3. The total of the fees calculated for all of the Funds listed on Schedule A for any period with respect to which calculations are made shall be paid within 45 days after the close of such period.
4. This Agreement and Schedule A does not require Distributors, as principal to provide transfer agency and recordkeeping related services.
5. Distributors, shall furnish the Funds with such information as shall reasonably be requested by the directors of the Funds with respect to the fees paid pursuant to this Agreement.
07/00
Shareholder Service Agreement 2
6. This Agreement may be terminated with respect to any Fund at any time without payment of any penalty by the vote of a majority of the directors of such Fund who are Dis-interested Directors or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Master Distribution Agreement between the Fund and Distributors or the Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
7. This Agreement shall become effective upon execution and delivery hereof and shall continue in full force and effect as long as the continuance of the Plan and this related Agreement are approved at least annually by a vote of the directors, including a majority of the Dis-interested Directors, cast in person at a meeting called for the purpose of voting thereon. All communications should be sent to the address of Distributors as shown at the bottom of this Agreement.
8. Distributors, acting as principal represents that it provides to shareholders for which it is broker of record personal services as such term is used from time to time in applicable regulations of the National Association of Securities Dealers, Inc., and that it will continue to accept payments under this Agreement only so long as it provides such services.
9. This Agreement shall be construed in accordance with the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
(Acting as Agent for the Funds)
07/00
Shareholder Service Agreement 3
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
--------------------------- -----------------------------------
Signature
|
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
07/00
Shareholder Service Agreement 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
-------------------------------------------------------------------------------
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Basic Balanced Fund A Shares 0.25 September 28, 2001
AIM Basic Balanced Fund B Shares 0.25 September 28, 2001
AIM Basic Balanced Fund C Shares 1.00** September 28, 2001
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM Dent Demographic Trends Fund A Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund B Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund C Shares 1.00** June 7, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Emerging Growth Fund A Shares 0.25 March 31, 2000
AIM Emerging Growth Fund B Shares 0.25 March 31, 2000
AIM Emerging Growth Fund C Shares 1.00** March 31, 2000
AIM Euroland Growth Fund A Shares 0.25 May 29, 1998
AIM Euroland Growth Fund B Shares 0.25 May 29, 1998
AIM Euroland Growth Fund C Shares 1.00** May 3, 1999
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM European Small Company Fund A Shares 0.25 August 31, 2000
AIM European Small Company Fund B Shares 0.25 August 31, 2000
AIM European Small Company Fund C Shares 1.00** August 31, 2000
|
09/01
Shareholder Service Agreement 5
Fund Fee Rate* Plan Calculation Date
-------------------------------------------------------------------------------
AIM Floating Rate Fund B Shares 0.25*** April 3, 2000
AIM Floating Rate Fund C Shares 0.50** April 3, 2000
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Biotech Fund A Shares 0.25 December __, 2001
AIM Global Biotech Fund B Shares 0.25 December __, 2001
AIM Global Biotech Fund C Shares 1.00** December __, 2001
AIM Global Energy Fund A Shares 0.40** May 29, 1998
AIM Global Energy Fund B Shares 0.25 May 29, 1998
AIM Global Energy Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Growth Fund A Shares 0.50** September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Global Income Fund A Shares 0.50** September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications and
Technology Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications and
Technology Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications and
Technology Fund C Shares 1.00** March 1, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
|
09/01
Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
-------------------------------------------------------------------------------
AIM International Emerging Growth Fund A Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund B Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund C Shares 1.00** August 31, 2000
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM International Value Fund A Shares 0.25 August 4, 1997
AIM International Value Fund B Shares 0.25 March 3, 1998
AIM International Value Fund C Shares 1.00** August 4, 1997
AIM Large Cap Basic Value Fund A Shares 0.25 July 15, 1999
AIM Large Cap Basic Value Fund B Shares 0.25 August 1, 2000
AIM Large Cap Basic Value Fund C Shares 1.00** August 1, 2000
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 April 5, 1999
AIM Large Cap Growth Fund C Shares 1.00** April 5, 1999
AIM Large Cap Opportunities Fund A Shares(1) 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares(1) 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares(1) 1.00** March 31, 2000
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Mid Cap Growth Fund A Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund B Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund C Shares 1.00** November 1, 1999
AIM Mid Cap Opportunities Fund A Shares(1) 0.25 December 30, 1998
AIM Mid Cap Opportunities Fund B Shares(1) 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares(1) 1.00** November 12, 1999
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM New Technology Fund A Shares 0.25 August 31, 2000
AIM New Technology Fund B Shares 0.25 August 31, 2000
AIM New Technology Fund C Shares 1.00** August 31, 2000
AIM Real Estate Fund A Shares 0.25 August 4, 1997
AIM Real Estate Fund B Shares 0.25 March 3, 1998
AIM Real Estate Fund C Shares 1.00** August 4, 1997
AIM Select Equity Fund A Shares 0.25 July 1, 1992
AIM Select Equity Fund B Shares 0.25 September 1,1993
AIM Select Equity Fund C Shares 1.00** August 4, 1997
AIM Small Cap Equity Fund A Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund B Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund C Shares 1.00** August 31, 2000
|
09/01
Shareholder Service Agreement 7
Fund Fee Rate* Plan Calculation Date
-------------------------------------------------------------------------------
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Opportunities Fund A Shares(1) 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares(1) 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares(1) 1.00** December 30, 1998
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Total Return Bond Fund A Shares 0.25 December __, 2001
AIM Total Return Bond Fund B Shares 0.25 December __, 2001
AIM Total Return Bond Fund C Shares 1.00** December __, 2001
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Value II Fund A Shares 0.25 August 31, 2000
AIM Value II Fund B Shares 0.25 August 31, 2000
AIM Value II Fund C Shares 1.00** August 31, 2000
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
AIM Worldwide Spectrum Fund A Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund B Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund C Shares 1.00** December 29, 2000
|
*Frequency of Payments: Quarterly, where Class A share payments begin immediately (unless your customer purchases at net asset value and you receive a commission, in which case it will begin after an initial 12-month holding period) and Class B and C share payments begin after an initial 12 month holding period. Where the broker dealer or financial institution waives, pursuant to the terms of the prospectus, the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder is paid as an asset-based sales charge, as those terms are defined under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other service provider for the first year with respect to sales of $1 million or more, at no load, in cases where A I M Distributors, Inc. has advanced the service fee to the dealer, bank or other service provider.
***Based on number of years outstanding. First year - 0.00%; Second year - 0.10%; Third year - 0.15%; Fourth year - 0.20%; Fifth and following years - 0.25%.
09/01