As filed with the Securities and Exchange Commission on October 12, 2001
1933 Act Registration No. 2-27334
1940 Act Registration No. 811-1540
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 86 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 86 X
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(Check appropriate box or boxes.)
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Copy to:
Renee A. Friedli, Esquire Martha J. Hays, Esquire 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 MID CAP BASIC
VALUE FUND
AIM Mid Cap Basic Value Fund seeks to provide long-term growth of capital.
AIM--Registered Trademark--
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--
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - FEE TABLE AND EXPENSE EXAMPLE 2 - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 2 Expense Example 2 FUND MANAGEMENT 3 - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 3 Advisor Compensation 3 Portfolio Managers 3 OTHER INFORMATION 3 - - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 3 Dividends and Distributions 3 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 its objective by investing, normally, at least 80% of its net assets in securities of companies that have market capitalizations, at the time of purchase, within the range of market capitalizations of companies included in the Russell Midcap--Trademark-- Index and that offer potential for capital growth. These securities may include common stocks, convertible bonds, convertible preferred stocks and warrants. The Russell Midcap--Trademark-- Index is an unmanaged index of common stocks that measures the performance of the smallest 800 companies in the Russell 1000--Registered Trademark-- Index. These companies are considered representative of medium-sized companies. Under normal conditions, the top 10 holdings may comprise at least a third of the portfolio's net assets.
The fund may also invest up to 25% of its total assets in foreign securities. The fund may also invest in debt instruments that are consistent with its investment objective of long-term growth of capital. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers purchase securities of companies that they believe are undervalued in relation to long-term earning power or other factors. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential.
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, bonds or other debt securities. As a result, the fund may not achieve its investment objectives.
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 smaller companies, whose prices may go up and down more than equity securities of larger, more-established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more-established companies, it may be difficult or impossible for the portfolio to sell securities at a desirable price. Debt securities are particularly vulnerable to credit risk and interest rate fluctuations. When interest rates rise, bond prices fall; the longer a bond's duration, the more sensitive it is to this risk.
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.
Also, since a large percentage of the fund's assets will be invested in a limited number of securities, any change in the value of those securities could significantly affect the value of your investment in the fund.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
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 [0.80]% [0.80]% [0.80]% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses(3) 0.62 0.63 0.63 Total Annual Fund Operating Expenses 1.77 2.43 2.43 --------------------------------------------------------- |
(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) Other Expenses are based on estimated amounts for the fiscal year ended
December 31, 2002.
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
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Class A $720 $1,077
Class B 746 1,058
Class C 346 758
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS
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Class A $720 $1,077
Class B 246 758
Class C 246 758
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THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the investment advisor. 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
[0.80%] of the first [$1 billion] of average daily net assets, 0.75% of the next
$4 billion of average daily net assets and [0.70%] of average daily net assets
over [$5 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
- Matthew W. Seinsheimer, Portfolio Manager, who has been responsible for the fund since 2001 and has been associated with the advisor and/or its affiliates since 1998. From 1995 to 1998, he was Portfolio Manager for American Indemnity Company.
- Bret W. Stanley, Senior Portfolio Manager, who has been responsible for the fund since 2001 and has been associated with the advisor and/or its affiliates since 1998. From 1994 to 1998, he was Vice President and portfolio manager with Van Kampen American Capital Asset Management, Inc.
SALES CHARGES
Purchases of Class A shares of AIM Mid Cap Basic Value 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
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- 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
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(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
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
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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
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A-1 MCF--08/01
CATEGORY II INITIAL SALES CHARGES
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
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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
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CATEGORY III INITIAL SALES CHARGES
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
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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
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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
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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
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HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
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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.
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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.
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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--Registered 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.
SEC 1940 Act file number: 811-1540 ---------------------------------- [AIM LOGO APPEARS HERE] www.aimfunds.com -PRO-1 INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
Subject to Completion - Dated October 12, 2001
STATEMENT OF
ADDITIONAL INFORMATION
AIM FUNDS GROUP
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION RELATES TO EACH PORTFOLIO (EACH A
"FUND," COLLECTIVELY THE "FUNDS") OF AIM FUNDS GROUP LISTED BELOW. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUSES FOR THE FUNDS LISTED BELOW. YOU MAY
OBTAIN A COPY OF ANY PROSPECTUS FOR ANY FUND LISTED BELOW FROM AN
AUTHORIZED DEALER OR BY WRITING TO:
A I M FUND SERVICES, INC.
P.O. BOX 4739
HOUSTON, TEXAS 77210-4739
OR BY CALLING (800) 347-4246
THIS STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 31, 2001,
RELATES TO THE FOLLOWING PROSPECTUSES:
FUND DATED
---- -----
AIM BALANCED FUND MAY 1, 2001
AIM BASIC BALANCED FUND SEPTEMBER 28, 2001
AIM EUROPEAN SMALL COMPANY FUND MAY 1, 2001
AIM GLOBAL UTILITIES FUND MAY 1, 2001
AIM INTERNATIONAL EMERGING GROWTH FUND MAY 1, 2001
AIM MID CAP BASIC VALUE FUND DECEMBER 31, 2001
AIM NEW TECHNOLOGY FUND MAY 1, 2001
AIM SELECT EQUITY FUND MAY 1, 2001
AIM SMALL CAP EQUITY FUND MAY 1, 2001
AIM VALUE FUND MAY 1, 2001
AIM VALUE II FUND MAY 1, 2001
AIM WORLDWIDE SPECTRUM FUND MAY 1, 2001
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AIM FUNDS GROUP
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 31, 2001
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION ABOUT THE TRUST................................................................................1
Fund History..............................................................................................1
Shares of Beneficial Interest.............................................................................1
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS...........................................................3
Classification............................................................................................3
Investment Strategies and Risks...........................................................................3
Equity Investments...............................................................................4
Foreign Investments..............................................................................4
Debt Investments.................................................................................4
Other Investments................................................................................4
Investment Techniques............................................................................5
Derivatives......................................................................................6
Fund Policies............................................................................................20
Temporary Defensive Positions............................................................................22
MANAGEMENT OF THE TRUST...........................................................................................23
Board of Trustees........................................................................................23
Management Information...................................................................................23
Compensation.............................................................................................23
Codes of Ethics..........................................................................................26
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...............................................................26
INVESTMENT ADVISORY AND OTHER SERVICES............................................................................26
Investment Advisor.......................................................................................26
Service Agreements.......................................................................................28
Other Service Providers..................................................................................29
BROKERAGE ALLOCATION AND OTHER PRACTICES..........................................................................30
Brokerage Transactions...................................................................................30
Commissions..............................................................................................30
Brokerage Selection......................................................................................30
Directed Brokerage.......................................................................................31
Regular Brokers or Dealers...............................................................................32
Allocation of Portfolio Transactions.....................................................................32
Allocation of Equity Offering Transactions...............................................................33
PURCHASE, REDEMPTION AND PRICING OF SHARES........................................................................33
Purchase and Redemption of Shares........................................................................33
Category I Funds................................................................................34
Category II Funds...............................................................................35
Category III Funds..............................................................................35
Offering Price...........................................................................................47
Redemption In Kind.......................................................................................48
Backup Withholding.......................................................................................48
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS..........................................................................49
Dividends and Distributions..............................................................................49
Tax Matters..............................................................................................50
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DISTRIBUTION OF SECURITIES........................................................................................56
Distribution Plans.......................................................................................56
Distributor..............................................................................................58
CALCULATION OF PERFORMANCE DATA...................................................................................60
RATINGS OF DEBT SECURITIES.......................................................................................A-1
TRUSTEES AND OFFICERS............................................................................................B-1
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..............................................................C-1
MANAGEMENT FEES..................................................................................................D-1
ADMINISTRATIVE SERVICES FEES.....................................................................................E-1
BROKERAGE COMMISSIONS............................................................................................F-1
AMOUNTS PAID TO A I M DISTRIBUTORS, INC. PURSUANT TO DISTRIBUTION PLANS..........................................G-1
ALLOCATION OF ACTUAL FEES PAID PURSUANT TO DISTRIBUTION PLANS....................................................H-1
TOTAL SALES CHARGES..............................................................................................I-1
PERFORMANCE DATA.................................................................................................J-1
FINANCIAL STATEMENTS..............................................................................................FS
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GENERAL INFORMATION ABOUT THE TRUST
FUND HISTORY
AIM Funds Group (the "Trust") is a Delaware business trust which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company. The Trust currently consists of twelve separate portfolios: AIM Balanced Fund, AIM Basic Balanced Fund, AIM European Small Company Fund, AIM Global Utilities Fund, AIM International Emerging Growth Fund, AIM Mid Cap Basic Value Fund, AIM New Technology Fund, AIM Select Equity Fund, AIM Small Cap Equity Fund, AIM Value Fund, AIM Value II Fund and AIM Worldwide Spectrum Fund, (each a "Fund" and collectively, the "Funds"). Under the Amended and Restated Agreement and Declaration of Trust, dated November 5, 1998, as amended (the "Trust Agreement"), the Board of Trustees is authorized to create new series of shares without the necessity of a vote of shareholders of the Trust.
The Trust was originally organized on October 30, 1984, as a
Massachusetts business trust. The Trust reorganized as a Delaware business trust
on October 15, 1993. The following Funds were included in the reorganization:
AIM Global Utilities Fund, AIM Select Equity Fund and AIM Value Fund. In
addition, on October 15, 1993, AIM Balanced Fund acquired all the assets and
assumed all of the liabilities of AIM Convertible Securities Fund, Inc., a
Maryland corporation. All historical financial and other information contained
in this Statement of Additional Information for periods prior to October 15,
1993 relating to these Funds (or a class thereof) is that of the predecessor
funds (or the corresponding class thereof). Prior to May 1, 1995, AIM Global
Utilities Fund was known as AIM Utilities Fund. Prior to July 13, 2001, AIM
Select Equity Fund was known as AIM Select Growth Fund, and prior to May 1,
1998, such Fund was known as AIM Growth Fund. Each of the other Funds commenced
operations as a series of the Trust.
SHARES OF BENEFICIAL INTEREST
Shares of beneficial interest of the Trust are redeemable at their net asset value (subject, in certain circumstances, to a contingent deferred sales charge) at the option of the shareholder or at the option of the Trust in certain circumstances.
The Trust allocates moneys and other property it receives from the issue or sale of shares of each of its series of shares, and all income, earnings and profits from such issuance and sales, subject only to the rights of creditors, to the appropriate Fund. These assets constitute the underlying assets of each Fund, are segregated on the Trust's books of account, and are charged with the expenses of such Fund and its respective classes. The Trust allocates any general expenses of the Trust not readily identifiable as belonging to a particular Fund by or under the direction of the Board of Trustees, primarily on the basis of relative net assets, or other relevant factors.
Each share of each Fund represents an equal proportionate interest in that Fund with each other share and is entitled to such dividends and distributions out of the income belonging to such Fund as are declared by the Board. Each Fund offers three separate classes of shares: Class A shares, Class B shares and Class C shares. Each such class represents interests in the same portfolio of investments. Differing sales charges and expenses will result in differing net asset values and dividends and distributions. Upon any liquidation of the Trust, shareholders of each class are entitled to share pro rata in the net assets belonging to the applicable Fund allocable to such class available for distribution after satisfaction of outstanding liabilities of the Fund allocable to such class.
Class A shares, Class B shares and Class C shares of the same Fund 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 B shareholders as well as Class A 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 distribution
plan adopted by the Board of Trustees for the Class A shares pursuant to Rule 12b-1 under the 1940 Act).
Class B shares automatically convert to Class A shares at the end of the month which is eight years after the date of purchase. A pro rata portion of shares from reinvested dividends and distributions convert at the same time. Because Class B shares convert into Class A shares, the holders of Class B shares (as well as the holders of Class A shares) of each Fund must approve any material increase in fees payable with respect to that Fund under the distribution plan for Class A shares. As an alternative, the Trust may establish a new class of shares into which the Class B shares will convert. This class must be identical in all material respects to the Class A shares prior to the material increase in fees.
Except as specifically noted above, shareholders of each Fund are entitled to one vote per share (with proportionate voting for fractional shares), irrespective of the relative net asset value of the shares of a Fund. However, on matters affecting an individual Fund or class of shares, a separate vote of shareholders of that Fund or class is required. Shareholders of a Fund or class are not entitled to vote on any matter which does not affect that Fund or class but that requires a separate vote of another Fund or class. An example of a matter that would be voted on separately by shareholders of each Fund is the approval of the advisory agreement with A I M Advisors, Inc. ("AIM"), and an example of a matter that would be voted on separately by shareholders of each class of shares is approval of the distribution plans. When issued, shares of each Fund are fully paid and nonassessable, have no preemptive or subscription rights, and are freely transferable. Other than the automatic conversion of Class B shares to Class A shares, there are no conversion rights. Shares do not have cumulative voting rights, which means that in situations in which shareholders elect trustees, holders of more than 50% of the shares voting for the election of trustees can elect all of the trustees of the Trust, and the holders of less than 50% of the shares voting for the election of trustees will not be able to elect any trustees.
Under Delaware law, shareholders of a Delaware business trust shall be entitled to the same limitations of liability extended to shareholders of private for-profit corporations. There is a remote possibility, however, that shareholders could, under certain circumstances, be held liable for the obligations of the Trust to the extent 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 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 the trustees to all parties, and each party thereto must expressly waive all rights of action directly against shareholders of the Trust. The Trust Agreement provides for indemnification out of the property of a Fund for all losses and expenses of any shareholder of such Fund held liable on account of being or having been a shareholder. Thus, the risk of a shareholder incurring financial loss due to shareholder liability is limited to circumstances in which a Fund is unable to meet its obligations and the complaining party is not held to be bound by the disclaimer.
The trustees and officers of the Trust will not be liable for any act, omission or obligation of the Trust or any Trustee or officer; however, a trustee or officer is not protected against any liability to the Trust or to the shareholders to which a trustee or officer would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office with the Trust ("Disabling Conduct"). The Trust Agreement provides for indemnification by the Trust of the trustees, the officers and employees or agents of the Trust, provided that such persons have not engaged in Disabling Conduct. The Trust Agreement also authorizes the purchase of liability insurance on behalf of trustees and officers.
SHARE CERTIFICATES. Each Fund will issue share certificates upon written request to A I M Fund Services, Inc. ("AFS"). AFS will not issue certificates for shares held in prototype retirement plans sponsored by AMVESCAP National Trust Company, an affiliate of AIM.
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
CLASSIFICATION
The Trust is an open-end management investment company. Each of the Funds other than AIM European Small Company Fund, AIM Global Utilities Fund and AIM International Emerging Growth Fund is "diversified" for purposes of the 1940 Act.
INVESTMENT STRATEGIES AND RISKS
The table on the following pages identifies various securities and investment techniques used by AIM in managing The AIM Family of Funds--Registered Trademark--. The table has been marked to indicate those securities and investment techniques that AIM may use to manage a Fund. A Fund may not use all of these techniques at any one time. A Fund's transactions in a particular security or use of a particular technique is subject to limitations imposed by a Fund's investment objective, policies and restrictions described in that Fund's Prospectus and/or this Statement of Additional Information, as well as federal securities laws. The Funds' investment objectives, policies, strategies and practices are non-fundamental. A more detailed description of the securities and investment techniques, as well as the risks associated with those securities and investment techniques that the Funds utilize, follows the table. The descriptions of the securities and investment techniques in this section supplement the discussion of principal investment strategies contained in each Fund's Prospectus; where a particular type of security or investment technique is not discussed in a Fund's Prospectus, that security or investment technique is not a principal investment strategy.
AIM FUNDS GROUP
SUMMARY OF SECURITIES AND INVESTMENT TECHNIQUES
FUND AIM
EUROPEAN AIM AIM AIM
SECURITY/ AIM AIM BASIC SMALL GLOBAL INTERNATIONAL AIM MID AIM NEW SELECT
INVESTMENT BALANCED BALANCED COMPANY UTILITIES EMERGING CAP BASIC TECHNOLOGY EQUITY
TECHNIQUE FUND FUND FUND FUND GROWTH FUND VALUE FUND FUND FUND
---------- ----------- ------------- ------------ ----------- -------------- ------------ ------------- ----------
EQUITY INVESTMENTS
Common Stock X X X X X X X X
Preferred Stock X X X X X X X X
Convertible X X X X X X X X
Securities
Alternative X X X X X X X X
Entity Securities
FOREIGN INVESTMENTS
Foreign Securities X X X X X X X X
Foreign Exchange X X X X X X X X
Transactions
DEBT INVESTMENTS
U.S. Government X X X X X X X X
Obligations
Mortgage-Backed and X X X X X X X X
Asset-Backed
Securities
Other Debt X X X X X X X X
Obligations
Junk Bonds X
Municipal Securities
OTHER INVESTMENTS
REITs X X X X X X X X
Other Investment X X X X X X X X
Companies
Delayed Delivery X X X X X X X X
Transactions
FUND AIM
SMALL AIM
SECURITY/ CAP AIM WORLDWIDE
INVESTMENT EQUITY AIM VALUE VALUE II SPECTRUM
TECHNIQUE FUND FUND FUND FUND
---------- ---------- ----------- ---------- ------------
Common Stock X X X X
Preferred Stock X X X X
Convertible X X X X
Securities
Alternative X X X X
Entity Securities
Foreign Securities X X X X
Foreign Exchange X X X X
Transactions
U.S. Government X X X X
Obligations
Mortgage-Backed and X X X X
Asset-Backed
Securities
Other Debt X X X X
Obligations
Junk Bonds
Municipal Securities
REITs X X X X
Other Investment X X X X
Companies
Delayed Delivery X X X X
Transactions
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AIM FUNDS GROUP
SUMMARY OF SECURITIES AND INVESTMENT TECHNIQUES
FUND AIM
EUROPEAN AIM AIM AIM
SECURITY/ AIM AIM BASIC SMALL GLOBAL INTERNATIONAL AIM MID AIM NEW SELECT
INVESTMENT BALANCED BALANCED COMPANY UTILITIES EMERGING CAP BASIC TECHNOLOGY EQUITY
TECHNIQUE FUND FUND FUND FUND GROWTH FUND VALUE FUND FUND FUND
---------- ----------- ------------- ------------ ----------- -------------- ------------ ------------- ----------
X X X X X X X X
When-Issued
Securities
Defaulted Securities
Municipal Forward
Contracts
Variable or Floating
Rate Instruments
Indexed Securities
Zero-Coupon and
Pay-in-Kind
Securities
Synthetic Municipal
Instruments
INVESTMENT TECHNIQUES
Short Sales X X X X X X X X
Margin Transactions
Interfund Loans X X X X X X X X
Lending Portfolio X X X X X X X X
Securities
Repurchase Agreements X X X X X X X X
Reverse Repurchase X X X X X X X X
Agreements
Dollar Rolls X
Illiquid Securities X X X X X X X X
Rule 144A Securities X X X X X X X X
Unseasoned Issuers X X X X X X X X
Standby Commitments
FUND AIM
SMALL AIM
SECURITY/ CAP AIM WORLDWIDE
INVESTMENT EQUITY AIM VALUE VALUE II SPECTRUM
TECHNIQUE FUND FUND FUND FUND
---------- ---------- ----------- ---------- ------------
X X X X
When-Issued
Securities
Defaulted Securities
Municipal Forward
Contracts
Variable or Floating
Rate Instruments
Indexed Securities
Zero-Coupon and
Pay-in-Kind
Securities
Synthetic Municipal
Instruments
Short Sales X X X X
Margin Transactions
Interfund Loans X X X X
Lending Portfolio X X X X
Securities
Repurchase Agreements X X X X
Reverse
Repurchase X X X X
Agreements
Dollar Rolls
Illiquid Securities X X X X
Rule 144A Securities X X X X
Unseasoned Issuers X X X X
Standby Commitments
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AIM FUNDS GROUP
SUMMARY OF SECURITIES AND INVESTMENT TECHNIQUES
FUND AIM
EUROPEAN AIM AIM AIM
SECURITY/ AIM AIM BASIC SMALL GLOBAL INTERNATIONAL AIM MID AIM NEW SELECT
INVESTMENT BALANCED BALANCED COMPANY UTILITIES EMERGING CAP BASIC TECHNOLOGY EQUITY
TECHNIQUE FUND FUND FUND FUND GROWTH FUND VALUE FUND FUND FUND
---------- ----------- ------------- ------------ ----------- -------------- ------------ ------------- ----------
DERIVATIVES
Equity-Linked X X X X X X X X
Derivatives
Put Options X X X X X X X X
Call Options X X X X X X X X
Straddles
Warrants X X X X X X X X
Futures Contracts X X X X X X X X
and Options on
Futures Contracts
Forward Contracts X X X X X X X X
Cover X X X X X X X X
FUND AIM
SMALL AIM
SECURITY/ CAP AIM WORLDWIDE
INVESTMENT EQUITY AIM VALUE VALUE II SPECTRUM
TECHNIQUE FUND FUND FUND FUND
---------- ---------- ----------- ---------- ------------
Equity-Linked X X X X
Derivatives
Put Options X X X X
Call Options X X X X
Straddles
Warrants X X X X
Futures Contracts X X X X
and Options on
Futures Contracts
Forward Contracts X X X X
Cover X X X X
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Equity Investments
COMMON STOCK. Common stock is issued by companies principally to raise cash for business purposes and represents a residual interest in the issuing company. A Fund participates in the success or failure of any company in which it holds stock. 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.
PREFERRED STOCK. Preferred stock, unlike common stock, often offers a stated dividend rate payable from a corporation's earnings. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, a negative feature when interest rates decline. Dividends on some preferred stock may be "cumulative," requiring all or a portion of prior unpaid dividends to be paid before dividends are paid on the issuer's common stock. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation, and may be "participating," which means that it may be entitled to a dividend exceeding the stated dividend in certain cases. In some cases an issuer may offer auction rate preferred stock, which means that the interest to be paid is set by auction and will often be reset at stated intervals. The rights of preferred stocks on the distribution of a corporation's assets in the event of a liquidation are generally subordinate to the rights associated with a corporation's debt securities.
CONVERTIBLE SECURITIES. Convertible securities include bonds, debentures, notes, preferred stocks and other securities that may be converted into a prescribed amount of common stock or other equity securities at a specified price and time. The holder of convertible securities is entitled to receive interest paid or accrued on debt, or dividends paid or accrued on preferred stock, until the security matures or is converted.
The value of a convertible security depends on interest rates, the yield of similar nonconvertible securities, the financial strength of the issuer and the seniority of the security in the issuer's capital structure. Convertible securities may be illiquid, and may be required to convert at a time and at a price that is unfavorable to the Fund.
The Funds will invest in a convertible debt security based primarily on the characteristics of the equity security into which it converts, and without regard to the credit rating of the convertible security (even if the credit rating is below investment grade). To the extent that a Fund invests in convertible debt securities with credit ratings below investment grade, such securities may have a higher likelihood of default, although this may be somewhat offset by the convertibility feature. See also "Junk Bonds" below.
ALTERNATIVE ENTITY SECURITIES. Companies that are formed as limited partnerships, limited liability companies, business trusts or other non-corporate entities may issue equity securities that are similar to the equivalent of common or preferred stock of corporations.
Foreign Investments
FOREIGN SECURITIES. Foreign securities are equity or debt securities issued by issuers outside the United States, and include securities in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), or other securities representing underlying securities of foreign issuers.
Each Fund may invest up to 25% of its total assets (at least 65% for AIM European Small Company Fund and AIM International Emerging Growth Fund, and up to 80% for AIM Global Utilities Fund and AIM Worldwide Spectrum Fund) in foreign securities.
Investments by a Fund in foreign securities, whether denominated in U.S. dollars or foreign currencies, may entail all of the risks set forth below. Investments by a Fund in ADRs, EDRs or similar securities also may entail some or all of the risks described below.
Currency Risk. The value of the Funds' foreign investments will be affected by changes in currency exchange rates. The U.S. dollar value of a foreign security decreases when the value of the U.S. dollar rises against the foreign currency in which the security is denominated, and increases when the value of the U.S. dollar falls against such currency.
Political and Economic Risk. The economies of many of the countries in which the Funds may invest may not be as developed as the United States' economy and may be subject to significantly different forces. Political or social instability, expropriation or confiscatory taxation, and limitations on the removal of funds or other assets could also adversely affect the value of the Funds' investments.
Regulatory Risk. Foreign companies are not registered with the Securities and Exchange Commission ("SEC") and are generally not subject to the regulatory controls imposed on United States issuers and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic securities. Foreign companies are not subject to uniform accounting, auditing and financial reporting standards, corporate governance practices and requirements comparable to those applicable to domestic companies. Income from foreign securities owned by the Funds may be reduced by a withholding tax at the source, which tax would reduce dividend income payable to the Funds' shareholders.
Market Risk. The securities markets in many of the countries in which the Funds invest will have substantially less trading volume than the major United States markets. As a result, the securities of some foreign companies may be less liquid and experience more price volatility than comparable domestic securities. Increased custodian costs as well as administrative costs (such as the need to use foreign custodians) may be associated with the maintenance of assets in foreign jurisdictions. There is generally less government regulation and supervision of foreign stock exchanges, brokers and issuers which may make it difficult to enforce contractual obligations. In addition, transaction costs in foreign securities markets are likely to be higher, since brokerage commission rates in foreign countries are likely to be higher than in the United States.
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. On January 2, 2001, Greece became a member of the EMU. It is anticipated that each participating country will replace its local currency with the euro on July 1, 2002. 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.
FOREIGN EXCHANGE TRANSACTIONS. Foreign exchange transactions include direct purchases of futures contracts with respect to foreign currency, and contractual agreements to purchase or sell a specified currency at a specified future date (up to one year) at a price set at the time of the contract. Such contractual commitments may be forward contracts entered into directly with another party or exchange traded futures contracts.
Each Fund has authority to deal in foreign exchange between currencies of the different countries in which it will invest as a hedge against possible variations in the foreign exchange rates between those currencies. A Fund may commit the same percentage of its total assets to foreign exchange hedges as it can invest in foreign securities.
The Funds may utilize either specific transactions ("transaction hedging") or portfolio positions ("position hedging") to hedge foreign currency exposure through foreign exchange transactions. Transaction hedging is the purchase or sale of foreign currency with respect to specific receivables or
payables of a Fund accruing in connection with the purchase or sale of its portfolio securities, the sale and redemption of shares of the Fund, or the payment of dividends and distributions by the Fund. Position hedging is the purchase or sale of foreign currency with respect to portfolio security positions (or underlying portfolio security positions, such as in an ADR) denominated or quoted in a foreign currency. Additionally, foreign exchange transactions may involve some of the risks of investments in foreign securities.
Debt Investments
U.S. GOVERNMENT OBLIGATIONS. Obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities include bills, notes and bonds issued by the U.S. Treasury, as well as "stripped" or "zero coupon" U.S. Treasury obligations representing future interest or principal payments on U.S. Treasury notes or bonds. Stripped securities are sold at a discount to their "face value," and may exhibit greater price volatility than interest-bearing securities since investors receive no payment until maturity. Obligations of certain agencies and instrumentalities of the U.S. Government, such as the Government National Mortgage Association ("GNMA"), are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal National Mortgage Association ("FNMA"), are supported by the right of the issuer to borrow from the Treasury; others, such as those of the Student Loan Marketing Association ("SLMA"), are supported by the discretionary authority of the U.S. Government to purchase the agency's obligations; still others, though issued by an instrumentality chartered by the U.S. Government, like the Federal Farm Credit Bureau ("FFCB"), are supported only by the credit of the instrumentality. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES - Mortgage backed securities are mortgage-related securities issued or guaranteed by the U.S. Government, its agencies and instrumentalities, or issued by nongovernment entities. Mortgage-related securities represent pools of mortgage loans assembled for sale to investors by various government agencies such as GNMA and government-related organizations such as FNMA and the Federal Home Loan Mortgage Corporation ("FHLMC"), as well as by nongovernment issuers such as commercial banks, savings and loan institutions, mortgage bankers and private mortgage insurance companies. Although certain mortgage-related securities are guaranteed by a third party or otherwise similarly secured, the market value of the security, which may fluctuate, is not so secured.
There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities they issue. Mortgage-related securities issued by GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as to the timely payment of principal and interest. That guarantee is backed by the full faith and credit of the U.S. Treasury. GNMA is a corporation wholly owned by the U.S. Government within the Department of Housing and Urban Development. Mortgage-related securities issued by FNMA include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes") and are guaranteed as to payment of principal and interest by FNMA itself and backed by a line of credit with the U.S. Treasury. FNMA is a government-sponsored entity wholly owned by public stockholders. Mortgage-related securities issued by FHLMC include FHLMC Mortgage Participation Certificates (also known as "Freddie Macs") guaranteed as to payment of principal and interest by FHLMC itself and backed by a line of credit with the U.S. Treasury. FHLMC is a government-sponsored entity wholly owned by public stockholders.
Other asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card agreements. Regular payments received in respect of such securities include both interest and principal. Asset-backed securities typically have no U.S. Government backing. Additionally, the ability of an issuer of asset-backed securities to enforce its security interest in the underlying assets may be limited.
If a Fund purchases a mortgage-backed or other asset-backed security at a premium, that portion may be lost if there is a decline in the market value of the security whether resulting from changes in interest rates or prepayments in the underlying collateral. As with other interest-bearing securities, the prices of such securities are inversely affected by changes in interest rates. However, though the value of a mortgage-backed or other asset-backed security may decline when interest rates rise, the converse is not necessarily true, since in periods of declining interest rates the mortgages and loans underlying the securities are prone to prepayment, thereby shortening the average life of the security and shortening the period of time over which income at the higher rate is received. When interest rates are rising, though, the rate of prepayment tends to decrease, thereby lengthening the period of time over which income at the lower rate is received. For these and other reasons, a mortgage-backed or other asset-backed security's average maturity may be shortened or lengthened as a result of interest rate fluctuations and, therefore, it is not possible to predict accurately the security's return.
OTHER DEBT OBLIGATIONS. Each Fund may invest in U.S. dollar-denominated
debt obligations issued or guaranteed by U.S. corporations or U.S. commercial
banks, U.S. dollar-denominated obligations of foreign issuers and debt
obligations of foreign issuers denominated in foreign currencies. Such debt
obligations include, among others, bonds, notes, debentures and variable rate
demand notes. In choosing corporate debt securities on behalf of a Fund, its
investment adviser may consider (i) general economic and financial conditions;
(ii) the specific issuer's (a) business and management, (b) cash flow, (c)
earnings coverage of interest and dividends, (d) ability to operate under
adverse economic conditions, (e) fair market value of assets, and (f) in the
case of foreign issuers, unique political, economic or social conditions
applicable to such issuer's country; and, (iii) other considerations deemed
appropriate. The Funds, other than AIM Global Utilities Fund, will purchase only
investment grade corporate debt securities.
JUNK BONDS. Junk bonds are lower-rated or non-rated debt securities. Junk bonds are considered speculative with respect to their capacity to pay interest and repay principal in accordance with the terms of the obligation. While generally providing greater income and opportunity for gain, non-investment grade debt securities are subject to greater risks than higher-rated securities.
Companies that issue junk bonds are often highly leveraged, and may not have more traditional methods of financing available to them. During an economic downturn or recession, highly leveraged issuers of high yield securities may experience financial stress, and may not have sufficient revenues to meet their interest payment obligations. Economic downturns tend to disrupt the market for junk bonds, lowering their values, and increasing their price volatility. The risk of issuer default is higher with respect to junk bonds because such issues are generally unsecured and are often subordinated to other creditors of the issuer.
The credit rating of a junk bond does not necessarily address its market value risk, and ratings may from time to time change to reflect developments regarding the issuer's financial condition. The lower the rating of a junk bond, the more speculative its characteristics.
AIM Global Utilities Fund may have difficulty selling certain junk bonds because it may have a thin trading market. The lack of a liquid secondary market may have an adverse effect on the market price and the Fund's ability to dispose of particular issues and may also make it more difficult for the Fund to obtain accurate market quotations of valuing these assets. In the event the Fund experiences an unexpected level of net redemptions, the Fund could be forced to sell its junk bonds at an unfavorable price. Prices of junk bonds have been found to be less sensitive to fluctuations in interest rates, and more sensitive to adverse economic changes and individual corporate developments than those of higher-rated debt securities.
Descriptions of debt securities ratings are found in Exhibit A.
Other Investments
REAL ESTATE INVESTMENT TRUSTS ("REITS"). REITs are trusts that sell equity or debt securities to investors and use the proceeds to invest in real estate or interests therein. A REIT may focus on particular projects, such as apartment complexes, or geographic regions, such as the southeastern United States, or both.
To the extent consistent with their respective investment objectives and policies, each Fund may invest up to 15% of its total assets in equity and/or debt securities issued by REITs.
To the extent that a Fund has the ability to invest in REITs, the Fund could conceivably own real estate directly as a result of a default on the securities it owns. A Fund, therefore, may be subject to certain risks associated with the direct ownership of real estate including difficulties in valuing and trading real estate, declines in the value of real estate, risks related to general and local economic conditions, adverse changes in the climate for real estate, environmental liability risks, increases in property taxes and operating expenses, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and increases in interest rates.
In addition to the risks described above, equity REITs may be affected by any changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are dependent upon management skill, are not diversified, and are therefore subject to the risk of financing single or a limited number of projects. Such trusts are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to maintain an exemption from the 1940 Act. Changes in interest rates may also affect the value of debt securities held by a Fund. By investing in REITs indirectly through a Fund, a shareholder will bear not only his/her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs.
OTHER INVESTMENT COMPANIES. With respect to a Fund's purchase of shares of another investment company, including Affiliated Money Market Funds (defined below), 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 money market funds that have AIM or an affiliate of AIM as an investment advisor (the "Affiliated Money Market Funds"), provided that investments in Affiliated Money Market Funds do not exceed 25% of the total assets of the investing Fund.
DELAYED DELIVERY TRANSACTIONS. Delayed delivery transactions involve commitments by a Fund to dealers or issuers to acquire or sell securities at a specified future date beyond the customary settlement for such securities. These commitments may fix the payment price and interest rate to be received or paid on the investment. A Fund may purchase securities on a delayed delivery to the extent it can anticipate having available cash on settlement date.
Investment in securities on a delayed delivery basis may increase a Fund's exposure to market fluctuation and may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must engage in portfolio transactions in order to honor a delayed delivery commitment. Until the settlement date, a Fund will segregate liquid assets of a dollar value sufficient at all times to make payment for the delayed delivery transactions. Such segregated liquid assets will be marked-to-market daily, and the amount segregated will be increased if necessary to maintain adequate coverage of the delayed delivery commitments. No additional delayed delivery agreements or when-issued commitments (as described below) will be made by a Fund if, as a result, more than 25% of the Fund's total assets would become so committed.
The delayed delivery securities, which will not begin to accrue interest or dividends until the settlement date, will be recorded as an asset of a Fund and will be subject to the risk of market fluctuation. The purchase price of the delayed delivery securities is a liability of a Fund until settlement.
Absent extraordinary circumstances, a Fund will not sell or otherwise transfer the delayed delivery securities prior to settlement.
WHEN-ISSUED SECURITIES. Purchasing securities on a "when-issued" basis means that the date for delivery of and payment for the securities is not fixed at the date of purchase, but is set after the securities are issued. The payment obligation and, if applicable, the interest rate that will be received on the securities are fixed at the time the buyer enters into the commitment. A Fund will only make commitments to purchase such securities with the intention of actually acquiring such securities, but the Fund may sell these securities before the settlement date if it is deemed advisable.
Securities purchased on a when-issued basis and the securities held in a Fund's portfolio are subject to changes in market value based upon the public's perception of the creditworthiness of the issuer and, if applicable, changes in the level of interest rates. Therefore, if a Fund is to remain substantially fully invested at the same time that it has purchased securities on a when-issued basis, there will be a possibility that the market value of the Fund's assets will fluctuate to a greater degree. Furthermore, when the time comes for the Fund to meet its obligations under when-issued commitments, the Fund will do so by using then available cash flow, by sale of the segregated liquid assets, by sale of other securities or, although it would not normally expect to do so, by directing the sale of the when-issued securities themselves (which may have a market value greater or less than the Fund's payment obligation).
Investment in securities on a when-issued basis may increase a Fund's exposure to market fluctuation and may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must engage in portfolio transactions in order to honor a when-issued commitment. A Fund will employ techniques designed to reduce such risks. If a Fund purchases a when-issued security, the Fund's custodian bank will segregate liquid assets in an amount equal to the when-issued commitment. If the market value of such segregated assets declines, additional liquid assets will be segregated on a daily basis so that the market value of the segregated assets will equal the amount of the Fund's when-issued commitments. No additional delayed delivery agreements (as described above) or when-issued commitments will be made by a Fund if, as a result, more than 25% of the Fund's total assets would become so committed.
Investment Techniques
SHORT SALES. In a short sale, a Fund does not immediately deliver the securities sold and does not receive the proceeds from the sale. A Fund is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. A Fund will make a short sale, as a hedge, when it believes that the price of a security may decline, causing a decline in the value of a security owned by the Fund or a security convertible into or exchangeable for such security, or when the Fund does not want to sell the security it owns, because it wishes to defer recognition of gain or loss for federal income tax purposes. In such case, any future losses in a Fund's long position should be reduced by a gain in the short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such gains or losses are reduced will depend upon the amount of the security sold short relative to the amount a Fund owns, either directly or indirectly, and, in the case where the Fund owns convertible securities, changes in the conversion premium. In determining the number of shares to be sold short against a Fund's position in a convertible security, the anticipated fluctuation in the conversion premium is considered. A Fund may also make short sales to generate additional income from the investment of the cash proceeds of short sales.
A Fund will only make short sales "against the box," meaning that at all times when a short position is open, the Fund owns an equal amount of such securities or securities convertible into or exchangeable, without payment of any further consideration, for securities of the same issue as, and equal in amount to, the securities sold short. To secure its obligation to deliver the securities sold short, a Fund will segregate with its custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. A Fund may pledge no more than 10% of its total assets as collateral for short sales at any time.
MARGIN TRANSACTIONS. None of the Funds will purchase any security on margin, except that each Fund may obtain such short-term credits as may be necessary for the clearance of purchases and sales of portfolio securities. The payment by a Fund of initial or variation margin in connection with futures or related options transactions will not be considered the purchase of a security on margin.
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 Fund to lend their securities to other AIM Funds is subject to certain other terms and conditions.
LENDING PORTFOLIO SECURITIES. The Funds may each lend their portfolio securities (principally to broker-dealers) where such loans are callable at any time and are continuously secured by segregated collateral equal to no less than the market value, determined daily, of the loaned securities. Such collateral will be cash, letters of credit, or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Each Fund may lend portfolio securities to the extent of one-third of its total assets.
The Funds would continue to receive the income on loaned securities and would, at the same time, earn interest on the loan collateral or on the investment of any cash collateral. Any cash collateral pursuant to these loans would be invested in short-term money market instruments or Affiliated Money Market Funds. Lending securities entails a risk of loss to the Funds if and to the extent that the market value of the securities loaned increases and the collateral is not increased accordingly.
REPURCHASE AGREEMENTS. Repurchase agreements are agreements under which a Fund acquires ownership of a security from a broker-dealer or bank that agrees to repurchase the security at a mutually agreed upon time and price (which is higher than the purchase price), thereby determining the yield during the Fund's holding period. A Fund may, however, enter into a "continuing contract" or "open" repurchase agreement under which the seller is under a continuing obligation to repurchase the underlying obligation from the Fund on demand and the effective interest rate is negotiated on a daily basis. Each of the Funds may engage in repurchase agreement transactions involving the types of securities in which it is permitted to invest.
If the seller of a repurchase agreement fails to repurchase the security in accordance with the terms of the agreement, the Fund might incur expenses in enforcing its rights, and could experience losses, including a decline in the value of the underlying security and loss of income. The securities underlying a repurchase agreement will be marked to market every business day so that the value of such securities is at least equal to the investment value of the repurchase agreement, including any accrued interest thereon.
The Funds have obtained an exemptive order from the SEC allowing them to invest their cash balances in joint accounts for the purpose of investing in repurchase agreements with maturities not to exceed 60 days, and in certain other money market instruments with remaining maturities not to exceed 90 days.
REVERSE REPURCHASE AGREEMENTS. Reverse repurchase agreements are
agreements which involve the sale of securities held by a Fund to financial
institutions such as banks and broker-dealers, with an agreement that the Fund
will repurchase the securities at an agreed upon price and date. A Fund may
employ reverse repurchase agreements (i) for temporary emergency purposes, such
as to meet unanticipated net redemptions so as to avoid liquidating other
portfolio securities during unfavorable market conditions; (ii) to cover
short-term cash requirements resulting from the timing of trade settlements; or
(iii) to take advantage of market situations where the interest income to be
earned from the investment of the proceeds of the transaction is greater than
the interest expense of the transaction. At the time it enters into a reverse
repurchase agreement, a Fund will segregate liquid assets having a
dollar value equal to the repurchase price, and will subsequently continually monitor the account to ensure that such equivalent value is maintained at all times. Reverse repurchase agreements involve the risk that the market value of securities to be purchased by the Fund may decline below the price at which it is obligated to repurchase the securities, or that the other party may default on its obligation, so that the Fund is delayed or prevented from completing the transaction.
DOLLAR ROLLS. A dollar roll involves the sale of a security, with an agreement to repurchase a substantially similar security at an agreed upon price and date. Whether such a transaction produces a gain for AIM Balanced Fund and AIM Basic Balanced Fund depends upon the costs of the agreement and the income and gains of the investments purchased with the proceeds received from the sale of the dollar roll security. At the time the Fund enters into a dollar roll, it will segregate liquid assets having a dollar value equal to the repurchase price, and will monitor the account to ensure that such equivalent value is maintained. The Fund typically enters into dollar roll transactions to enhance the Fund's return either on an income or total return basis.
ILLIQUID SECURITIES. Illiquid securities are securities that cannot be disposed of within seven days in the normal course of business at the price at which they are valued. Illiquid securities may include securities that are subject to restrictions on resale because they have not been registered under the Securities Act of 1933 (the "1933 Act"). Restricted securities may, in certain circumstances, be resold pursuant to Rule 144A, and thus may or may not constitute illiquid securities.
Each Fund may invest up to 15% of its net assets in securities that are illiquid. Limitations on the resale of restricted securities may have an adverse effect on their marketability, which may prevent a Fund from disposing of them promptly at reasonable prices. A Fund may have to bear the expense of registering such securities for resale, and the risk of substantial delays in effecting such registrations.
RULE 144A SECURITIES. Rule 144A securities are securities which, while privately placed, are eligible for purchase and resale pursuant to Rule 144A under the 1933 Act. This Rule permits certain qualified institutional buyers, such as the Funds, to trade in privately placed securities even though such securities are not registered under the 1933 Act. AIM, under the supervision of the Board of Trustees, will consider whether securities purchased under Rule 144A are illiquid and thus subject to the Funds' restriction of investing no more than 15% of their respective net assets in illiquid securities. Determination of whether a Rule 144A security is liquid or not is a question of fact. In making this determination AIM will consider the trading markets for the specific security taking into account the unregistered nature of a Rule 144A security. In addition, AIM could consider the (i) frequency of trades and quotes, (ii) number of dealers and potential purchasers, (iii) dealer undertakings to make a market, and (iv) nature of the security and of market place trades (for example, the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). AIM will also monitor the liquidity of Rule 144A securities and, if as a result of changed conditions, AIM determines that a Rule 144A security is no longer liquid, AIM will review a Fund's holdings of illiquid securities to determine what, if any, action is required to assure that such Fund does not invest more than 15% of its net assets in illiquid securities. Investing in Rule 144A securities could increase the amount of each Fund's investments in illiquid securities if qualified institutional buyers are unwilling to purchase such securities.
UNSEASONED ISSUERS. Investments in the equity securities of companies having less than three years' continuous operations (including operations of any predecessor) involve more risk than investments in the securities of more established companies because unseasoned issuers have only a brief operating history and may have more limited markets and financial resources. As a result, securities of unseasoned issuers tend to be more volatile than securities of more established companies.
Derivatives
The Funds may each invest in forward 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 each Fund's investments. The Funds may also invest in equity-linked derivative products designed to replicate the composition and performance of particular indices. 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).
EQUITY-LINKED DERIVATIVES. Equity-Linked Derivatives represent interests in trusts that are structured to provide investors proportionate undivided interests in a securities portfolio constituting substantially all the common stocks (in substantially the same weighting) as the component common stocks of a particular securities index. Generally, these Equity-Linked Derivatives are only redeemable in large blocks of shares. These Equity-Linked Derivatives are exchange traded. The performance results of Equity-Linked Derivatives will not replicate exactly the performance of the pertinent index due to reductions in the Equity-Linked Derivatives' performance attributable to transaction and other expenses, including fees to service providers, borne by the Equity-Linked Derivatives. 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, and therefore, a Fund may be subject to the same investment restrictions with Equity-Linked Derivatives as with other investment companies. See "Other Investment Companies."
PUT AND CALL OPTIONS. A call option gives the purchaser the right to buy the underlying security, contract or foreign currency at the stated exercise price at any time prior to the expiration of the option (or on a specified date if the option is a European style option), regardless of the market price or exchange rate of the security, contract or foreign currency, as the case may be at the time of exercise. If the purchaser exercises the call option, the writer of a call option is obligated to sell the underlying security, contract or foreign currency. A put option gives the purchaser the right to write (sell) the underlying security, contract or foreign currency at the stated exercise price at any time prior to the expiration date of the option (or on a specified date if the option is a European style option), regardless of the market price or exchange rate of the security, contract or foreign currency, as the case may be at the time of exercise. If the purchaser exercises the put option, the writer of a put option is obligated to buy the underlying security, contract or foreign currency. The premium paid to the writer is consideration for undertaking the obligations under the option contract. Until an option expires or is offset, the option is said to be "open." When an option expires or is offset, the option is said to be "closed."
A Fund will not write (sell) options if, immediately after such sale, the aggregate value of securities or obligations underlying the outstanding options exceeds 20% of the Fund's total assets. A Fund will not purchase options if, at any time of the investment, the aggregate premiums paid for the options will exceed 5% of the Fund's total assets.
Pursuant to federal securities rules and regulations, a Fund's use of options may require that Fund to set aside assets to reduce the risks associated with using those options. This process is described in more detail below in the section "Cover."
Writing Options. A Fund may write put and call options in an attempt to realize, through the receipt of premiums, a greater current return than would be realized on the underlying security, contract, or foreign currency alone. In return for the premium received for writing a call option, the Fund foregoes
the opportunity for profit from a price increase in the underlying security, contract, or foreign currency above the exercise price so long as the option remains open, but retains the risk of loss should the price of the security, contract, or foreign currency decline. In return for the premium received for writing a put option, the Fund assumes the risk that the price of the underlying security, contract, or foreign currency will decline below the exercise price, in which case the put would be exercised and the Fund would suffer a loss.
If an option that a Fund has written expires, it 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, contract or currency during the option period. If the call option is exercised, a Fund will realize a gain or loss from the sale of the underlying security, contract or currency, which will be increased or offset by the premium received. A Fund would write a put option at an exercise price that, reduced by the premium received on the option, reflects the lowest price it is willing to pay for the underlying security, contract or currency. The obligation imposed upon the writer of an option is terminated upon the expiration of the option, or such earlier time at which a Fund effects a closing purchase transaction by purchasing an option (put or call as the case may be) identical to that previously sold.
Writing call options can serve as a limited hedge because declines in the value of the hedged investment would be offset to the extent of the premium received for writing the option. Closing transactions may be effected in order to realize a profit on an outstanding call option, to prevent an underlying security, contract or currency from being called or to permit the sale of the underlying security, contract or currency. Furthermore, effecting a closing transaction will permit a Fund to write another call option on the underlying security, contract or currency with either a different exercise price or expiration date, or both.
Purchasing Options. A Fund may purchase a call option for the purpose of acquiring the underlying security, contract or currency for its portfolio. Utilized in this fashion, the purchase of call options would enable a Fund to acquire the security, contract or currency at the exercise price of the call option plus the premium paid. 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 increase in the market price of the underlying security, contract or currency. If the market price does not exceed the exercise price, the Fund could purchase the security on the open market and could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option. Each of the Funds may also purchase call options on underlying securities, contracts or currencies against which it has written other call options. For example, where a Fund has written a call option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a call option with a different exercise strike and/or expiration date that would eliminate some or all of the risk associated with the written call. Used in combinations, these strategies are commonly referred to as "call spreads."
A Fund may purchase a put option on an underlying security, contract or currency ("protective put") owned by the Fund in order to protect against an anticipated decline in the value of the security, contract or currency. Such hedge protection is provided only during the life of the put option. The premium paid for the put option and any transaction costs would reduce any profit realized when the security, contract or currency is delivered upon the exercise of the put option. Conversely, if the underlying security, contract or currency does not decline in value, the option may expire worthless and the premium paid for the protective put would be lost. A Fund may also purchase put options on underlying securities, contracts or currencies against which it has written other put options. For example, where a Fund has written a put option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a put option with a different exercise price and/or expiration date that would eliminate some or all of the risk associated with the written put. Used in combinations, these strategies are commonly referred to as "put spreads." Likewise, a Fund may write call options on underlying securities, contracts or currencies against which it has purchased protective put options. This strategy is commonly referred to as a "collar."
Over-The-Counter Options. 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. Because OTC options in certain cases may be difficult to dispose of in a timely manner, the Fund may be required to treat some or all of these options as illiquid securities. Although a Fund will enter into OTC options only with dealers that are expected to be capable of entering into closing transactions with it, 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 dealer, a Fund might be unable to close out an OTC option position at any time prior to its expiration.
Index Options. Index options (or options on securities indices) are similar in many respects to options on securities, except that an index option gives the holder the right to receive, upon exercise, cash instead of securities, if the closing level of the securities index upon which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. The amount of cash is equal to the difference between the closing price of the index and the exercise price of the call or put times a specified multiple (the "multiplier"), which determines the total dollar value for each point of such difference.
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, the 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 not be perfectly correlated with the value of the index.
WARRANTS. Warrants are, in effect, longer-term call options. They give the holder the right to purchase a given number of shares of a particular company at specified prices within certain periods of time. The purchaser of a warrant expects that the market price of the security will exceed the purchase price of the warrant plus the exercise price of the warrant, thus giving him a profit. Since the market price may never exceed the exercise price before the expiration date of the warrant, the purchaser of the warrant risks the loss of the entire purchase price of the warrant. Warrants generally trade in the open market and may be sold rather than exercised. Warrants are sometimes sold in unit form with other securities of an issuer. Units of warrants and common stock may be employed in financing young, unseasoned companies. The purchase price of a warrant varies with the exercise price of the warrant, the current market value of the underlying security, the life of the warrant and various other investment factors.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. A Futures Contract is a two party agreement to buy or sell a specified amount of a specified security or currency (or delivery of a cash settlement price, in the case of an index future) for a specified price at a designated date, time and place (collectively, "Futures Contracts"). 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 agreed upon in the Futures Contract; 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 when a Futures Contract is outstanding.
A Fund will enter into Futures Contracts for hedging purposes only; that is, Futures Contracts will be sold to protect against a decline in the price of securities or currencies that the Fund owns, or Futures Contracts will be purchased to protect the Fund against an increase in the price of securities or currencies it has committed to purchase or expects to purchase. A Fund's hedging may include sales of Futures Contracts 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 Contracts as an offset against the effect of expected declines in interest rates, and increases in currency exchange rates or stock prices.
The Funds will only enter into Futures Contracts that are traded (either domestically or internationally) 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 and by the Commodity Futures Trading Commission ("CFTC"). Foreign futures exchanges and trading thereon are not regulated by the CFTC and are not subject to the same regulatory controls. For a further discussion of the risks associated with investments in foreign securities, see "Foreign Investments" in this Statement of Additional Information.
Closing out an open Futures Contract is effected by entering into an offsetting Futures Contract for the same aggregate amount of the identical financial instrument or currency and the same delivery date. 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, it will continue to be required to maintain the margin deposits on the Futures Contract.
"Margin" with respect to Futures Contracts is the amount of funds that must be deposited by a Fund in order to initiate Futures Contracts trading and maintain its open positions in Futures Contracts. A margin deposit made when the Futures Contract is entered ("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 a 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.
If a Fund were unable to liquidate a Futures Contract or an option on a Futures Contract 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 Futures Contract or option or to maintain cash or securities in a segregated account.
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 Contract 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 Contract margin account.
Limitations on Futures Contracts and Options on Futures Contracts and on 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 it has entered into. This guideline may be modified by the Board, without a shareholder vote. This limitation does not limit the percentage of the Fund's assets at risk to 5%.
Pursuant to federal securities rules and regulations, a Fund's use of Futures Contracts and options on Futures Contracts may require that Fund to set aside assets to reduce the risks associated with using Futures Contracts and options on Futures Contracts. This process is described in more detail below in the section "Cover."
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. Forward contracts are traded over-the-counter, and not on organized commodities or securities exchanges. As a result, it may be more difficult to value such contracts, and it may be difficult to enter into closing transactions.
Each of the Funds may engage in forward currency transactions in anticipation of, or to protect itself against, fluctuations in exchange rates. A Fund may enter into forward contracts with respect to a specific purchase or sale of a security, or with respect to its portfolio positions generally. When a Fund purchases a security denominated in a foreign currency for settlement in the near future, it may immediately purchase in the forward market the currency needed to pay for and settle the purchase. By entering into a forward contract with respect to the specific purchase or sale of a security denominated in a foreign currency, the Fund can secure an exchange rate between the trade and settlement dates for that purchase or sale transaction. This practice is sometimes referred to as "transaction hedging." Position hedging is the purchase or sale of foreign currency with respect to portfolio security positions denominated or quoted in a foreign currency.
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.
Pursuant to federal securities rules and regulations, a Fund's use of forward contracts may require that Fund to set aside assets to reduce the risks associated with using forward contracts. This process is described in more detail below in the section "Cover."
COVER. Transactions using forward contracts, futures contracts and options (other than options purchased by a Fund) expose a 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, liquid assets and/or 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. To the extent that a futures contract, forward contract or option is deemed to be illiquid, the assets used to "cover" the Fund's obligation will also be treated as illiquid for purposes of determining the Fund's maximum allowable investment in illiquid securities.
Even though options purchased by the Funds do not expose the Funds to an obligation to another party, but rather provide the Funds with a right to exercise, the Funds intend to "cover" the cost of any such exercise. To the extent that a purchased option is deemed illiquid, the Fund will treat the market value of the option (i.e., the amount at risk to the Fund) as illiquid, but will not treat the assets used as cover on such transactions as illiquid.
Assets used as cover 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.
GENERAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES. The use by the Funds of options, futures contracts and forward currency contracts involves special considerations and risks, as described below. Risks pertaining to particular strategies are described in the sections that follow.
(1) Successful use of hedging transactions depends upon AIM's ability to correctly predict the direction of changes in the value of the applicable markets and securities, contracts and/or currencies. While AIM is experienced in the use of these instruments, there can be no assurance that any particular hedging strategy will succeed.
(2) There might be imperfect correlation, or even no correlation, between the price movements of an instrument (such as an option contract) and the price movements of the investments being hedged. For example, if a "protective put" is used to hedge a potential decline in a security and the security does decline in price, the put option's increased value may not completely offset the loss in the underlying security. Such a lack of correlation might occur due to factors unrelated to the value of the investments being hedged, such as changing interest rates, market liquidity, and speculative or other pressures on the markets in which the hedging instrument is traded.
(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.
(4) There is no assurance that a liquid secondary market will exist for any particular option, futures contract or option thereon or, forward contract at any particular time.
(5) As described above, a 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. If a 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.
(6) There is no assurance that a Fund will use hedging transactions. For example, if a Fund determines that the cost of hedging will exceed the potential benefit to the Fund, the Fund will not enter into such transaction.
FUND POLICIES
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 AIM European Small Company Fund and AIM International Emerging Growth Fund are not subject to restriction (1) and AIM Global Utilities Fund is not subject to restrictions (1) or (4). Fundamental restrictions may be changed only by a vote of the lesser of (i) 67% or more of the Fund's shares present at a meeting if the holders of more than 50% of the outstanding shares are present in person or represented by proxy, or (ii) more than 50% of the Fund's outstanding shares.
(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 1933 Act.
(4) The Fund will not make investments that will result in the concentration (as that term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) of its investments in the securities of issuers primarily engaged in the same industry. This restriction does not limit the Fund's investments in (i) obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, or (ii) tax-exempt obligations issued by governments or political subdivisions of governments. In complying with this restriction, the Fund will not consider a bank-issued guaranty or financial guaranty insurance as a separate security.
(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 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.
AIM Global Utilities 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 public utility companies.
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 has 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 AIM European Small Company Fund and AIM International Emerging Growth Fund are not subject to restriction (1) and AIM Global Utilities Fund is not subject to restrictions (1) or (3).
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 or 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) In complying with the fundamental restriction regarding industry concentration, the Fund may invest up to 25% of its total assets in the securities of issuers whose principal business activities are in the same industry.
(4) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33"% 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.
For purposes of AIM Global Utilities Fund's fundamental restriction regarding industry concentration, public utility companies shall consist of companies that produce or supply electricity, natural gas, water, sanitary services, and telephone, cable, satellite, telegraph or other communication or information transmission services, as well as developing utility technology companies and holding companies which derive at least 40% of their revenues from utility-related activities.
TEMPORARY DEFENSIVE POSITIONS
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, money market instruments, bonds, or other debt securities. Each of the Funds may also invest up to 25% of its total assets in Affiliated Money Market Funds for these purposes.
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Funds and the Trust is vested in the Board of Trustees. The Board of Trustees approves all significant agreements between the Trust, on behalf of one or more of the Funds, and persons or companies furnishing services to the Funds. The day-to-day operations of each Fund are delegated to the officers of the Trust and to AIM, subject always to the objective(s), restrictions and policies of the applicable Fund and to the general supervision of the Board of Trustees. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. All of the Trust's executive officers hold similar offices with some or all of the other AIM Funds.
MANAGEMENT INFORMATION
The trustees and officers of the Trust and their principal occupations during at least the last five years are set forth in Appendix B.
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 Frank S. Bayley, Bruce L.
Crockett, Owen Daly II, Albert R. Dowden (Vice Chair), Edward K. Dunn, Jr.
(Chair), Jack M. Fields, Carl Frischling (on leave of absence), Lewis F. Pennock
and Louis S. Sklar, Dr. Prema Mathai-Davis and Ruth H. Quigley. The Audit
Committee is responsible for: (i) considering management's recommendations of
independent accountants for each Fund and evaluating such accountants'
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
(ii) that the Committee on Directors/Trustees or the Board, as applicable, shall
make the final determination of persons to be nominated.
COMPENSATION
Each trustee who is not affiliated with AIM is compensated for his or her services according to a fee schedule which recognizes the fact that such trustee also serves as a director or trustee of other AIM
Funds. Each such trustee receives a fee, allocated among the AIM Funds for which he or she serves as a director or trustee, which consists of an annual retainer component and a meeting fee component.
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 FROM ACCRUED COMPENSATION
THE BY ALL FROM ALL AIM
TRUSTEE TRUST(1) AIM FUNDS(2) FUNDS(3)
------- ----------------- ------------ ------------
Frank S. Bayley(4) -0- -0- $ 105,000
Bruce L. Crockett $ 17,307 $ 60,951 111,500
Owen Daly II 17,307 97,195 111,500
Albert R. Dowden(5) 2,275 -0- 13,435
Edward K. Dunn, Jr. 17,307 22,138 111,500
Jack M. Fields 16,779 23,019 108,500
Carl Frischling(6) 17,307 107,507 111,500
Prema Mathai-Davis 17,307 22,606 111,500
Lewis F. Pennock 17,307 67,995 111,500
Ruth H. Quigley(4) -0- -0- 105,000
Louis S. Sklar 17,282 87,538 111,500
|
(1) The total amount of compensation deferred by all trustees of the Trust during the fiscal year ended December 31, 2000, including earnings, was $146,194.
(2) During the fiscal year ended December 31, 2000, the total amount of expenses allocated to the Trust in respect of such retirement benefits was $128,135.
(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. Bayley and Miss Quigley were elected to serve as trustees on September 28, 2001.
(5) Mr. Dowden was elected to serve as a trustee on December 12, 2000.
(6) During the fiscal year ended December 31, 2000, the Trust paid $80,374 in legal fees to Kramer Levin Naftalis & Frankel LLP for services rendered by such firm as counsel to the independent trustees of the Trust. Mr. Frischling is a partner in such firm.
Retirement Plan For Trustees
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. The retirement benefit will equal 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. The annual retirement benefits are
payable in quarterly installments for a number of years equal to the lesser of
(i) ten or (ii) the number of such trustee's credited years of service. 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 non-AIM-affiliated trustee as of December 31, 2000.
TABLE #1
ESTIMATED CREDITED
TRUSTEE YEARS 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.
CODES OF ETHICS
AIM, the Trust and A I M Distributors, Inc. ("AIM Distributors") have each adopted a Code of Ethics governing, as applicable, personal trading activities of all Directors/Trustees, officers of the Trust, persons who, in connection with their regular functions, play a role in the recommendation of any purchase or sale of a security by any of the Funds or obtain information pertaining to such purchase or sale, and certain other employees. The Codes of Ethics are intended to prohibit conflicts of interest with the Trust that may arise from personal trading. Personal trading, including personal trading involving securities that may be purchased or held by a Fund, is permitted by persons covered under the relevant Codes subject to certain restrictions; however those persons are generally required to pre-clear all security transactions with the Compliance Officer or his designee and to report all transactions on a regular basis.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Information about the ownership of each class of each Fund's shares by beneficial or record owners of such Fund and by trustees and officers as a group is found in Appendix C. A shareholder who owns beneficially 25% or more of the outstanding shares of a Fund is presumed to "control" that Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISOR
AIM, the Funds' investment advisor, was organized in 1976, and along with its subsidiaries, manages or advises over 135 investment portfolios encompassing a broad range of investment objectives. 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 Management is an indirect, wholly-owned subsidiary of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent global investment management group. Certain of the directors and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Management Information" herein.
As investment advisor, 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, 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.
Pursuant to its advisory agreement with the Trust, AIM receives a monthly fee from each Fund calculated at the following annual rates, based on the average daily net assets of each Fund during the year:
ANNUAL
FUND NAME NET ASSETS RATE
--------- ---------- ------
AIM Balanced Fund First $150 million 0.75%
Amount over $150 million 0.50%
AIM Basic Balanced Fund First $1 billion 0.65%
Next $4 billion 0.60%
Amount over $5 billion 0.55%
AIM European Small Company Fund All Assets 0.95%
AIM International Emerging Growth Fund
AIM Global Utilities Fund First $200 million 0.60%
Next $300 million 0.50%
Next $500 million 0.40%
Amount over $1 billion 0.30%
AIM Mid Cap Basic Value Fund [First $1 billion [0.80%
Next $4 billion 0.75%
Over $5 billion] 0.70%]
AIM Select Equity Fund First $150 million 0.80%
AIM Value Fund* Amount over $150 million 0.625%
AIM New Technology Fund All Assets 1.00%
AIM Small Cap Equity Fund All Assets 0.85%
AIM Value II Fund All Assets 0.75%
AIM Worldwide Spectrum Fund First $1 billion 0.85%
Amount over $1 billion 0.80%
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* See currently effective fee schedule below
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.
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 "Other Investments - Other Investment Companies."
AIM has voluntarily agreed, effective July 1, 2001, to waive advisory fees payable by AIM Value Fund in an amount equal to 0.025% for each $5 billion increment in net assets over $5 billion, up to a maximum waiver of 0.175% on net assets in excess of $35 billion.
Pursuant to a prior voluntary fee waiver arrangement, AIM waived through June 30, 2000 a portion of its advisory fees payable by AIM Value Fund so that the effective fee schedule was as follows:
NET ASSETS ANNUAL
RATE
First $150 million 0.80%
Over $150 million to and including $2 billion 0.625%
Over $2 billion 0.60%
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The management fees payable by each Fund, the amounts waived by AIM and the net fee paid by each Fund for the last three fiscal years ended December 31 are found in Appendix D.
SECURITIES LENDING ARRANGEMENTS. If a Fund engages in securities lending, AIM will provide the Fund investment advisory services and related administrative services. The 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.
SERVICE AGREEMENTS
ADMINISTRATIVE SERVICES AGREEMENT. AIM and the Trust have entered into a Master Administrative Services Agreement ("Administrative Services Agreement") pursuant to which 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 advisory agreement. The Administrative Services Agreement provides that it will remain in effect and continue from year to year only if such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the independent trustees, by votes cast in person at a meeting called for such purpose. Under the Administrative Services Agreement, AIM is entitled to receive from the Funds reimbursement of its costs or such reasonable compensation as may be approved by the Board of Trustees. Currently, AIM is reimbursed for the services of the Trust's principal financial officer and her staff, and any expenses related to fund accounting services.
Administrative services fees paid to AIM by each Fund for the last three fiscal years ended December 31 are found in Appendix E.
OTHER SERVICE PROVIDERS
TRANSFER AGENT. A I M Fund Services, Inc. ("AFS"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046, a registered transfer agent and wholly-owned subsidiary of AIM, acts as transfer and dividend disbursing agent for the Funds.
The Transfer Agency and Service Agreement between the Trust and AFS provides that AFS will perform certain shareholder services for the Funds. 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. AFS 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.
In addition, 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 is paid a per account fee to perform certain shareholder sub-accounting services for its customers who beneficially own shares of the Fund(s).
CUSTODIANS. State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110, is custodian of all securities and cash of the Funds. Chase Bank of Texas, N.A., 712 Main, Houston, Texas 77002, serves as Sub-Custodian for retail purchases. The Bank of New York, 100 Church Street, New York, New York 10286, also serves as Sub-Custodian to facilitate cash management.
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 States in branches of U.S. banks and, to the extent permitted by applicable regulations, in certain foreign banks and securities depositories. AIM is responsible for selecting eligible foreign securities depositories; the Custodian is responsible for monitoring eligible foreign securities depositories.
Under its contract with the Trust, the Custodian maintains the portfolio securities of the Funds, administers the purchases and sales of portfolio securities, collects interest and dividends and other distributions made on the securities held in the portfolios of the Funds and performs other ministerial duties. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets.
AUDITORS. The Funds' independent public accountants are responsible for auditing the financial statements of the Funds. Due to an investment in another AIM Fund, which KPMG LLP represented to the AIM Fund was inadvertent, and new SEC rules regarding auditor independence, KPMG LLP resigned as independent public accountants for the Trust. The Board of Trustees has selected PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110, as the independent public accountants to audit the financial statements of the Funds.
COUNSEL TO THE TRUST. Legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103.
BROKERAGE ALLOCATION AND OTHER PRACTICES
BROKERAGE TRANSACTIONS
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 "Brokerage Selection" 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 effected 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.
Brokerage commissions paid by each of the Funds for the last three fiscal years ended December 31 are found in Appendix F.
COMMISSIONS
During the last three fiscal years, none of the Funds paid brokerage commissions to brokers affiliated with the Funds, AIM, AIM Distributors, or any affiliates of such entities.
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 an AIM Fund, provided the conditions of an exemptive order received by the AIM Funds from the SEC are met. In addition, a Fund may purchase or sell a security from or to another AIM Fund or account (and may invest in Affiliated Money Market Funds) provided the Funds follow procedures adopted by the Boards 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.
BROKERAGE SELECTION
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 Trust's trustees 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.
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. (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, consistent with obtaining best execution. AIM will not use a specific formula in connection with any of these considerations to determine the target levels.
DIRECTED BROKERAGE
For the fiscal year ended December 31, 2000, each Fund allocated the following amount of transactions to broker-dealers that provided AIM with certain research, statistics and other information:
Related
Fund Transactions Brokerage Commissions
---- -------------- ---------------------
AIM Balanced Fund $ 102,517,095 $ 132,437
AIM Basic Balanced Fund N/A N/A
AIM European Small Company Fund N/A N/A
AIM Global Utilities Fund 36,929,232 58,450
AIM International Emerging Growth Fund N/A N/A
AIM Mid Cap Basic Value Fund N/A N/A
AIM New Technology Fund 578,573 1,008
AIM Select Equity Fund 82,154,945 132,407
AIM Small Cap Equity Fund 75,953 390
AIM Value Fund 3,098,916,653 2,826,507
AIM Value II Fund 101,700 120
AIM Worldwide Spectrum Fund N/A N/A
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REGULAR BROKERS OR DEALERS
During the fiscal year ended December 31, 2000, the Funds held securities issued by the following companies, which are "regular" brokers or dealers of one or more of the Funds identified below:
Fund Stock Market Value
---- ----- ------------
AIM Balanced Fund Schwab (Charles) Corp. (The) $ 21,699,781
Merrill Lynch & Co., Inc. 26,729,500
Morgan Stanley Dean Witter & Co. 30,986,750
Goldman Sachs Group, Inc. (The) 31,974,313
AIM European Small Company Fund Van der Moolen Holding N.V. 145,590
AIM International Emerging Growth Fund Van der Moolen Holding N.V. 102,770
AIM Select Equity Fund Lehman Brothers Holdings Inc. 6,275,600
AIM Small Cap Equity Fund LaBranche & Co. Inc. 568,463
AIM Value Fund Morgan Stanley Dean Witter & Co. 969,362,225
Merrill Lynch & Co. Inc. 218,200,000
AIM Value II Fund TD Waterhouse Group, Inc. 1,495,925
Lehman Brothers Holdings Inc. 4,199,512
Morgan Stanley Dean Witter & Co. 2,060,500
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Fund Bonds/Notes Market Value
---- ----------- ------------
AIM Balanced Fund Bear Stearns Cos., Inc. $ 10,994,728
Lehman Brothers Holdings, Inc. 25,117,193
Lehman Brothers Inc. 3,512,532
Merrill Lynch & Co., Inc. 2,484,799
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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.
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.
PURCHASE, REDEMPTION AND PRICING OF SHARES
PURCHASE AND REDEMPTION OF SHARES
Purchases of Class A Shares
INITIAL SALES CHARGES. Each AIM Fund (other than AIM Tax-Exempt Cash Fund) is grouped into one of three categories to determine the applicable initial sales charge for its Class A Shares. The sales charge is used to compensate AIM Distributors and participating dealers for their expenses incurred in connection with the distribution of the Funds' shares. You may also be charged a transaction or other fee by the financial institution managing your account.
Class A Shares of AIM Tax-Exempt Cash Fund are sold without an initial sales charge.
CATEGORY I FUNDS
AIM Aggressive Growth Fund AIM Large Cap Basic Value Fund AIM Asian Growth Fund AIM Large Cap Equity Fund AIM Basic Value Fund AIM Large Cap Growth Fund AIM Blue Chip Fund AIM Large Cap Opportunities Fund AIM Capital Development Fund AIM Mid Cap Basic Value Fund AIM Charter Fund AIM Mid Cap Equity Fund AIM Constellation Fund AIM Mid Cap Growth Fund AIM Core Strategies Fund AIM Mid Cap Opportunities Fund AIM Dent Demographic Trends Fund AIM New Technology Fund AIM Emerging Growth Fund AIM Select Equity Fund AIM European Development Fund AIM Small Cap Equity Fund AIM European Small Company Fund AIM Small Cap Growth Fund AIM Euroland Growth Fund AIM Small Cap Opportunities Fund AIM Global Biotech Fund AIM Value Fund AIM Global Utilities Fund AIM Value II Fund AIM International Emerging Growth Fund AIM Weingarten Fund AIM International Equity Fund AIM Worldwide Spectrum Fund AIM International Value Fund |
Dealer
Investor's Sales Charge Concession
-------------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the 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
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(1) AIM Small Cap Opportunities Fund will not accept any single purchase in excess of $250,000
CATEGORY II FUNDS
AIM Balanced Fund AIM Global Trends Fund AIM Basic Balanced Fund AIM High Income Municipal Fund AIM Developing Markets Fund AIM High Yield Fund AIM Global Aggressive Growth Fund AIM High Yield Fund II AIM Global Energy Fund AIM Income Fund AIM Global Financial Services Fund AIM Intermediate Government Fund AIM Global Growth Fund AIM Municipal Bond Fund AIM Global Health Care Fund AIM Real Estate Fund AIM Global Income Fund AIM Strategic Income Fund AIM Global Infrastructure Fund AIM Total Return Bond Fund AIM Global Telecommunications and Technology Fund |
Dealer
Investor's Sales Charge Concession
-------------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the 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
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CATEGORY III FUNDS
AIM Limited Maturity Treasury Fund
AIM Tax-Free Intermediate Fund
Dealer
Investor's Sales Charge Concession
-------------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the 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 $1,000,000 0.50 0.50 0.40
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LARGE PURCHASES OF CLASS A SHARES. Investors who purchase $1,000,000 or more ("Large Purchases") of Class A Shares of Category I, II or III Funds do not pay an initial sales charge. If an investor makes a Large Purchase of Class A shares of a Category I or II Fund, however, the shares generally will be subject to a contingent deferred sales charge if the investor redeems those shares within 18 months after purchase.
AIM Distributors may pay a dealer concession and/or advance a service fee on Large Purchases, as set forth below.
For Large Purchases of Class A shares of Category I or II Funds, AIM Distributors may make the following payments to dealers and institutions that are dealers of record:
PERCENT OF SUCH PURCHASES
1% of the first $2 million
plus 0.80% of the next $1 million
plus 0.50% of the next $17 million
plus 0.25% of amounts in excess of $20 million
For Large Purchases of Class A shares of Category III Funds, AIM Distributors may make the following payments to dealers and institutions that are dealers of record:
Up to 0.10% of purchases of AIM Limited Maturity Treasury Fund; and Up to 0.25% of purchases of AIM Tax-Free Intermediate Fund
For annual purchases of Class A shares of Category I and II Funds, AIM Distributors may make the following payments to investment dealers or other financial service firms for sales of such shares at net asset value to employee benefit plans:
PERCENT OF SUCH PURCHASES
1% of the first $2 million
plus 0.80% of the next $1 million
plus 0.50% of the next $17 million
plus 0.25% of amounts in excess of $20 million
For annual purchases of Class A Shares of AIM Limited Maturity Treasury Fund, AIM Distributors may pay investment dealers or other financial service firms up to 0.10% of the net asset value of such shares sold at net asset value.
PURCHASERS QUALIFYING FOR REDUCTIONS IN INITIAL SALES CHARGES. As shown in the tables above, purchases of certain amounts of AIM Fund shares may reduce the initial sales charges. These reductions are available to purchasers that meet the qualifications listed below. We will refer to purchasers that meet these qualifications as "Qualified Purchasers."
INDIVIDUALS
o an individual (including his or her spouse or domestic partner, and children)
o any trust established exclusively for the benefit of an individual
o a pension, profit-sharing, or other retirement plan established exclusively for the benefit of an individual, such as:
a. an IRA
b. a Roth IRA
c. a single-participant money-purchase/profit-sharing plan
d. an individual participant in a 403(b) Plan (unless the 403(b) plan itself qualifies as the purchaser, as discussed below)
403(b) PLANS
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.
TRUSTEES AND FIDUCIARIES
o a trustee or fiduciary purchasing for a single trust, estate or single fiduciary account
o a trustee or fiduciary purchasing for a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Code
o a trustee or fiduciary purchasing for a 457 plan, even if more than one beneficiary or participant is involved
LINKED EMPLOYEE PLANS
o Linked employee plans where the employer has notified AIM Distributors in writing that all of its related employee accounts should be linked, such as:
a. Simplified Employee Pension (SEP) Plans
b. Salary Reduction and other Elective Simplified Employee Pension account (SAR-SEP) Plans
c. Savings Incentive Match Plans for Employees IRA (SIMPLE IRA)
OTHER GROUPS
o any other organized group of persons, whether incorporated or not, provided that:
a. the organization has been in existence for at least six months; and
b. the organization has some purpose other than the purchase at a discount of redeemable securities of a registered investment company.
HOW TO QUALIFY FOR REDUCTIONS IN INITIAL SALES CHARGES. The following sections discuss different ways that a purchaser can qualify for a reduction in the initial sales charges for purchases of Class A shares of the AIM Funds.
LETTERS OF INTENT
A Qualified Purchaser may pay reduced initial sales charges by:
o indicating on the account application that he or she intends to provide a Letter of Intent ("LOI"); and
o fulfilling the conditions of that LOI.
The LOI confirms the total investment in shares of the AIM Funds that the Qualified Purchaser intends to make within the next 13 months. By marking the LOI section on the account application and by signing the account application, the Qualified Purchaser indicates that he or she understands and agrees to the terms of the LOI and is bound by the provisions described below:
Calculating the Initial Sales Charge
o 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 (to determine what the applicable public offering price is, look as the Sales Charge Table in the section on "Large Purchases of Class A Shares" above).
o 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.
o The offering price may be further reduced as described below under "Rights of Accumulation" if the Transfer Agent is advised of all other accounts at the time of the investment.
o Shares acquired through reinvestment of dividends and capital gains distributions will not be applied to the LOI.
Calculating the Number of Shares to be Purchased
o 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.
o Purchases made more than 90 days before signing an LOI will be applied toward the completion of the LOI based on the value of the shares purchased that is calculated at the public offering price on the effective date of the LOI.
o If a purchaser meets the original obligation at any time during the 13-month period, he or she may revise the intended investment amount upward by submitting a written and signed request. This revision will not change the original expiration date.
o The Transfer Agent will process necessary adjustments upon the expiration or completion date of the LOI.
Fulfilling the Intended Investment
o 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 purchaser will have to pay the increased amount of sales charge.
o To assure compliance with the provisions of the 1940 Act, the Transfer Agent will escrow in the form of shares an appropriate dollar amount (computed to the nearest full share) out of the initial purchase (or subsequent purchases if necessary). 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.
o 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 sales charge on the amount actually purchased. If the purchaser does not pay such difference within 20 days of the expiration date, he or she 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.
Canceling the LOI
o If at any time before completing the LOI Program, the purchaser wishes to cancel the agreement, he or she must give written notice to AIM Distributors.
o 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, the LOI will be automatically canceled. 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.
Other Persons Eligible for the LOI Privilege
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.
RIGHTS OF ACCUMULATION
A Qualified Purchaser may also qualify for reduced initial sales charges based upon his or her existing investment in shares of any of the AIM Funds at the time of the proposed purchase. 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 owned by such purchaser, calculated at their then current public offering price.
If a purchaser qualifies for a reduced sales charge, the reduced sales charge applies to the total amount of money being invested, even if only a portion of that amount exceeds the breakpoint for the reduced sales charge. 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 the Transfer Agent 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.
Rights of Accumulation are also available to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contract purchased on or before June 30, 1992.
OTHER REQUIREMENTS FOR REDUCTIONS IN INITIAL SALES CHARGES. As discussed above, 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 to the reduced sales charge based on the definition of a Qualified Purchaser listed above. No person or entity may distribute shares of the AIM Funds without payment of the applicable sales charge other than to Qualified Purchasers.
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.
PURCHASES OF CLASS A SHARES AT NET ASSET VALUE. AIM Distributors permits certain categories of persons to purchase Class A shares of AIM Funds without paying an initial sales charge. These are typically categories of persons whose transactions involve little expense, such as:
o Persons who have a relationship with the funds or with AIM and its affiliates, and are therefore familiar with the funds, and who place unsolicited orders directly with AIM Distributors; or
o programs for purchase that involve little expense 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, and certain other persons whose purchases result in relatively low expenses of distribution, be permitted to purchase shares through AIM Distributors without payment of a sales charge.
Accordingly, 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 of financial institutions that have arrangements with such selling group members;
o Purchases through approved fee-based programs;
o Employee benefit plans that are Qualified Purchasers, as defined above, and non-qualified plans offered in conjunction with those employee benefit plans, provided that:
a. the initial investment in the plan(s) is at least $1 million;
b. the sponsor signs a $1 million LOI;
c. the employer-sponsored plan has at least 100 eligible employees; or
d. all plan transactions are executed through a single omnibus account per Fund and the financial institution or service organization has entered into the appropriate agreement 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 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 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 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 Code; and
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.
In addition, an investor may acquire shares of any of the AIM Funds at net asset value in connection with:
o the reinvestment of dividends and distributions from a Fund;
o exchanges of shares of certain Funds;
o use of the reinstatement privilege; or
o a merger, consolidation or acquisition of assets of a Fund.
PAYMENTS TO DEALERS. 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 1933 Act.
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.
Purchases of Class B Shares
Class B shares are sold at net asset value, and are not subject to an initial sales charge. Instead, investors may pay a contingent deferred sales charge if they redeem their shares within eight years after purchase. See the Prospectus for additional information regarding contingent deferred sales charges. 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 will equal 4.00% of the purchase price and will consist of a sales commission equal to 3.75% plus an advance of the first year service fee of 0.25%.
Purchases of Class C Shares
Class C shares are sold at net asset value, and are not subject to an initial sales charge. Instead, investors may pay a contingent deferred sales charge if they redeem their shares within the first year after purchase. See the Prospectus for additional information regarding this contingent deferred sales charge (CDSC). 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 will equal 1.00% of the purchase price and will consist of a sales commission of 0.75% plus an advance of the first year service fee of 0.25%. 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
TERMS AND CONDITIONS OF EXCHANGES. 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 fax, telegraph or use overnight courier services to expedite exchanges by mail, which will be effective on the business day received by AFS as long as such request is received prior to the close of the customary trading session of the NYSE. AFS 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.
Redemptions
GENERAL. 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 Funds at (800) 959-4246 and guarantee delivery of all required documents in good order. A repurchase is effected at the net asset value per share of the applicable Fund next determined after the repurchase order is received. Such an arrangement is subject to timely receipt by AFS, the Funds' transfer agent, 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 a Fund or by AIM Distributors (other than any applicable contingent deferred sales charge) when shares are redeemed or repurchased, dealers may charge a fair service fee for handling the transaction.
SUSPENSION OF REDEMPTIONS. 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.
REDEMPTIONS BY TELEPHONE. By signing an account application form, an investor appoints AFS as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by AFS in the designated account(s), present or future, with full power of substitution in the premises. AFS 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 AFS 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 transactions. AFS 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.
SYSTEMATIC WITHDRAWAL PLAN. A Systematic Withdrawal Plan permits a shareholder of an AIM Fund to withdraw on a regular basis at least $50 per withdrawal. Under a Systematic Withdrawal Plan, all shares are to be held by AFS and all dividends and distributions are reinvested in shares of the applicable AIM Fund by AFS. To provide funds for payments made under the Systematic Withdrawal Plan, AFS 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 Funds), 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.
Contingent Deferred Sales Charges Imposed upon Redemption of Shares
A contingent deferred sales charge (CDSC) may be imposed upon the redemption of Large Purchases of Class A Shares of Category I and II Funds or upon the redemption of Class B shares and of Class C shares. See the Prospectus for additional information regarding CDSCs.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR LARGE PURCHASES OF CLASS A SHARES. An investor who has made a Large Purchase of Class A shares of a Category I or II Fund will not be subject to a CDSC upon the redemption of those shares 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.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR CLASS B AND C SHARES. Investors who purchased former GT Global funds Class B shares before June 1, 1998 are subject to the following waivers from the CDSC otherwise due upon redemption:
o total or partial redemptions resulting from a distribution following retirement in the case of a tax-qualified employer-sponsored retirement;
o 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;
o 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;
o redemptions made in connection with participant-directed exchanges between options in an employer-sponsored benefit plan;
o redemptions made for the purpose of providing cash to fund a loan to a participant in a tax-qualified retirement plan;
o 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;
o 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));
o 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 redemptions of Class B or Class C shares, as applicable:
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.
General Information Regarding Purchases, Exchanges and Redemptions
GOOD ORDER. Purchase, exchange and redemption orders must be received in good order. To be in good order, an investor must supply AFS 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 AFS 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 AFS. Any loss resulting from the failure of the dealer or financial intermediary to submit an order within the prescribed time frame will be borne by that dealer or financial intermediary. 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
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 AFS' current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. AFS 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 TELEPHONE. By signing an account application form, an investor appoints AFS as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by AFS 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. AFS 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 AFS 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. AFS 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.
INTERNET TRANSACTIONS. 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 AFS 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 AFS in writing, and (2) the AIM Internet Connect option may be terminated at any time by the AIM Funds.
OFFERING PRICE
The following formula may be used to determine the public offering price per Class A share of an investor's investment:
Net Asset Value / (1 - Sales Charge as % of Offering Price) = Offering Price.
For example, at the close of business on December 31, 2000, AIM Value Fund - Class A shares had a net asset value per share of $12.51. The offering price, assuming an initial sales charge of 5.50%, therefore was $13.24.
Calculation of Net Asset Value
Each Fund determines its net asset value per share 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, each Fund determines its net asset value per share as of the close of the NYSE on such day. For purposes of determining net asset value per share, the Fund will generally use futures and options contract closing prices which are available fifteen (15) minutes after the close of the customary trading session of the NYSE. The Funds determine net asset value per share by dividing the value of a 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 a 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. 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; [option contracts are valued at the mean between the closing bid and asked prices on the exchange where the contracts are principally traded; futures contracts are valued at final settlement price quotations from the primary exchange on which they are traded]. Debt securities (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 institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and 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 ask 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 on the basis of amortized cost, which approximates market value.
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.
Fund securities primarily traded in foreign markets may be traded in such markets on days which are not business days of the Fund. Because the net asset value per share of each Fund is determined only on business days of the Fund, the net asset value per share of a Fund may be significantly affected on days when an investor cannot exchange or redeem shares of the Fund.
REDEMPTION IN KIND
AIM intends to redeem all shares of the Funds in cash. It is possible that future conditions may make it undesirable for a Fund to pay for redeemed shares in cash. In such cases, the Fund may make payment in securities or other property if the Fund has made an election under Rule 18f-1 under the 1940 Act. Rule 18f-1 obligates a Fund to redeem for cash all shares presented to such Fund for redemption by any one shareholder in an amount up to the lesser of $250,000 or 1% of that Fund's net assets in any 90-day period. Securities delivered in payment of redemptions are valued at the same value assigned to them in computing the applicable Fund's net asset value per share. Shareholders receiving such securities are likely to incur brokerage costs on their subsequent sales of such securities.
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. AIM or AFS will not provide Form 1099 to those payees.
Investors should contact the IRS if they have any questions concerning withholding.
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 other distributions. Under applicable treaty law, residents of treaty countries may qualify for a reduced rate of withholding or a withholding exemption.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
It is the present policy of the Fund to declare and pay annually net investment income dividends and capital gain distributions, except for AIM Balanced Fund, AIM Basic Balanced Fund and AIM Global Utilities Fund. It is the Fund's intention to distribute substantially all of its net investment income and realized net capital gains by the end of each taxable year. In determining the amount of capital gains, if any, available for distribution, capital gains will be offset against available net capital losses, if any, carried forward from previous fiscal periods. All dividends and distributions will be 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 the Prospectus under the caption "Special Plans - Automatic Dividend Investment." Such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. 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.
It is the present policy of the AIM Balanced Fund, AIM Basic Balanced Fund and AIM Global Utilities Fund to declare and pay quarterly net investment income dividends and declare and pay annually capital gain distributions.
A 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.
Dividends on Class B and Class C shares are expected to be lower than those for Class A shares because of higher distribution fees paid by Class B and Class C shares. Other class-specific expenses may also affect dividends on shares of those classes. Expenses attributable to a particular class ("Class Expenses") include distribution plan expenses, which must be allocated to the class for which they are incurred. Other expenses may be allocated as Class Expenses, consistent with applicable legal principals under the 1940 Act and the Code.
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.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY. Each Fund has elected to be taxed as a regulated investment company under Subchapter M of the Code. As a regulated investment company, `each Fund is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes (i) at least 90% of its investment company taxable income (i.e., net investment income, net foreign currency ordinary gain or loss and the excess of net short-term capital gain over net long-term capital loss) and (ii) at least 90% of the excess of its tax-exempt interest income under Code Section 103(a) over its deductions disallowed under Code Sections 265 and 171(a)(2) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by a Fund made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains of the taxable year and can therefore satisfy the Distribution Requirement.
Each Fund may use "equalization accounting" in determining the portion of its net investment income and capital gain net income that has been distributed. A Fund that elects to use equalization accounting will allocate a portion of its realized investment income and capital gains to redemptions of Fund shares and will reduce the amount of such income and gains that it distributes in cash. However, each Fund intends to make cash distributions for each taxable year in an aggregate amount that is sufficient to satisfy the Distribution Requirement without taking into account its use of equalization accounting. The Internal Revenue Service has not published any guidance concerning the methods to be used in allocating investment income and capital gains to redemptions of shares. In the event that the Internal Revenue Service determines that a Fund is using an improper method of allocation and has underdistributed its net investment income and capital gain net income for any taxable year, such Fund may be liable for additional federal income tax.
In addition to satisfying the Distribution Requirement, a regulated investment company must derive at least 90% of its gross income from dividends, interest, certain payments with respect to
securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including, but not limited to, gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "Income Requirement").
In addition to satisfying the requirements described above, each Fund must satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of each Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash items, U.S. Government securities, securities of other regulated investment companies, and securities of other issuers, as to which the Fund has not invested more than 5% of the value of the Fund's total assets in securities of such issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of such issuer, and no more than 25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses.
For purposes of the Asset Diversification Test, the Internal Revenue Service ("IRS") has ruled that the issuer of a purchased listed call option on stock is the issuer of the stock underlying the option. The IRS has also informally ruled that, in general, the issuers of purchased or written call and put options on securities, of long and short positions on futures contracts on securities and of options on such future contracts are the issuers of the securities underlying such financial instruments where the instruments are traded on an exchange.
Where the writer of a listed call option owns the underlying securities, the IRS has ruled that the Asset Diversification Test will be applied solely to such securities and not to the value of the option itself. With respect to options on securities indexes, futures contracts on securities indexes and options on such futures contracts, the IRS has informally ruled that the issuers of such options and futures contracts are the separate entities whose securities are listed on the index, in proportion to the weighing of securities in the computation of the index. It is unclear under present law who should be treated as the issuer of forward foreign currency exchange contracts, of options on foreign currencies, or of foreign currency futures and related options. It has been suggested that the issuer in each case may be the foreign central bank or the foreign government backing the particular currency. Due to this uncertainty and because the Funds may not rely on informal rulings of the IRS, the Funds may find it necessary to seek a ruling from the IRS as to the application of the Asset Diversification Test to certain of the foregoing types of financial instruments or to limit its holdings of some or all such instruments in order to stay within the limits of such test.
If for any taxable year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions will be taxable as ordinary dividends to the extent of such Fund's current and accumulated earnings and profits. Such distributions generally will be eligible for the dividends received deduction in the case of corporate shareholders.
DETERMINATION OF TAXABLE INCOME OF A REGULATED INVESTMENT COMPANY. In general, gain or loss recognized by a Fund on the disposition of an asset will be a capital gain or loss. However, gain recognized on the disposition of a debt obligation purchased by a Fund at a market discount (generally, at a price less than its principal amount) will be treated as ordinary income to the extent of the portion of the market discount which accrued during the period of time the Fund held the debt obligation unless the Fund made an election to accrue market discount into income. If a Fund purchases a debt obligation that was originally issued at a discount, the Fund is generally required to include in gross income each year the portion of the original issue discount which accrues during such year. In addition, under the rules of Code Section 988, gain or loss recognized on the disposition of a debt obligation denominated in a foreign currency or an option with respect thereto (but only to the extent attributable to changes in foreign currency exchange rates), and gain or loss recognized on the disposition of a foreign currency forward contract or of foreign currency itself, will generally be treated as ordinary income or loss.
Certain hedging transactions that may be engaged in by certain of the Funds (such as short sales "against the box") may be subject to special tax treatment as "constructive sales" under Section 1259 of the Code if a Fund holds certain "appreciated financial positions" (defined generally as any interest (including a futures or forward contract, short sale or option) with respect to stock, certain debt instruments, or partnership interests if there would be a gain were such interest sold, assigned, or otherwise terminated at its fair market value). Upon entering into a constructive sales transaction with respect to an appreciated financial position, a Fund will generally be deemed to have constructively sold such appreciated financial position and will recognize gain as if such position were sold, assigned, or otherwise terminated at its fair market value on the date of such constructive sale (and will take into account any gain for the taxable year which includes such date).
Some of the forward foreign currency exchange contracts, options and
futures contracts that certain of the Funds may enter into will be subject to
special tax treatment as "Section 1256 contracts." Section 1256 contracts that a
Fund holds are treated as if they are sold for their fair market value on the
last business day of the taxable year, regardless of whether a taxpayer's
obligations (or rights) under such contracts have terminated (by delivery,
exercise, entering into a closing transaction or otherwise) as of such date. Any
gain or loss recognized as a consequence of the year-end deemed disposition of
Section 1256 contracts is combined with any other gain or loss that was
previously recognized upon the termination of Section 1256 contracts during that
taxable year. The net amount of such gain or loss for the entire taxable year
(including gain or loss arising as a consequence of the year-end deemed sale of
such contracts) is deemed to be 60% long-term and 40% short-term gain or loss.
However, in the case of Section 1256 contracts that are forward foreign currency
exchange contracts, the net gain or loss is separately determined and (as
discussed above) generally treated as ordinary income or loss. If such a future
or option is held as an offsetting position and can be considered a straddle
under Section 1092 of the Code, such a straddle will constitute a mixed
straddle. A mixed straddle will be subject to both Section 1256 and Section 1092
unless certain elections are made by the Fund.
Other hedging transactions in which the Funds may engage may result in "straddles" or "conversion transactions" for U.S. federal income tax purposes. The straddle and conversion transaction rules may affect the character of gains (or in the case of the straddle rules, losses) realized by the Funds. In addition, losses realized by the Funds on positions that are part of a straddle may be deferred under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses are realized. Because only a few regulations implementing the straddle rules and the conversion transaction rules have been promulgated, the tax consequences to the Funds of hedging transactions are not entirely clear. The hedging transactions may increase the amount of short-term capital gain realized by the Funds (and, if they are conversion transactions, the amount of ordinary income) which is taxed as ordinary income when distributed to shareholders.
Because application of any of the foregoing rules governing Section 1256 contracts, constructive sales, straddle and conversion transactions may affect the character of gains or losses, defer losses and/or accelerate the recognition of gains or losses from the affected investment or straddle positions, the taxable income of a Fund may exceed its book income. Accordingly, the amount which must be distributed to shareholders and which will be taxed to shareholders as ordinary income or long-term capital gain may also differ from the book income of the Fund and may be increased or decreased as compared to a fund that did not engage in such transactions.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES. A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income (excess of capital gains over capital losses) for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year.
Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, in the event that the Internal Revenue Service determines that a Fund is using an improper method of allocation for purposes of equalization accounting (as discussed above), such Fund may be liable for excise tax. Moreover, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability.
FUND DISTRIBUTIONS. Each Fund anticipates distributing substantially all of its investment company taxable income for each taxable year. Such distributions will be taxable to shareholders as ordinary income and treated as dividends for federal income tax purposes, but they will qualify for the 70% dividends received deduction for corporations only to the extent discussed below.
A Fund may either retain or distribute to shareholders its net capital gain (net long-term capital gain over net short-term capital loss) for each taxable year. Each Fund currently intends to distribute any such amounts. If net capital gain is distributed and designated as a capital gain dividend, it will be taxable to shareholders as long-term capital gain (taxable at a maximum rate of 20% for noncorporate shareholders) regardless of the length of time the shareholder has held his shares or whether such gain was recognized by the Fund prior to the date on which the shareholder acquired his shares. Conversely, if a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carry forwards) at the 35% corporate tax rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will be required to report its pro rata share of such gain on its tax return as long-term capital gain, will receive a refundable tax credit for its pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for its shares by an amount equal to the deemed distribution less the tax credit.
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 its 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.
Ordinary income dividends paid by the Fund with respect to a taxable year will qualify for the 70% dividends received deduction generally available to corporations (other than corporations, such as "S" corporations, which are not eligible for the deduction because of their special characteristics and other than for purposes of special taxes such as the accumulated earnings tax and the personal holding company tax) to the extent of the amount of qualifying dividends received by the Fund from domestic corporations for the taxable year.
Alternative minimum tax ("AMT") is imposed in addition to, but only to the extent it exceeds, the regular tax and is computed at a maximum rate of 28% for non-corporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's alternative minimum taxable income ("AMTI") over an exemption amount. The corporate dividends received deduction is not itself an item of tax preference that must be added back to taxable income or is otherwise disallowed in determining a corporation's AMTI. However, corporate shareholders will generally be required to take the full amount of any dividend received from the Fund into account (without a dividend received deduction) in determining their adjusted current earnings, which are used in computing an additional corporate preference item (i.e., 75% of the excess of a corporate taxpayer's adjusted current earnings over its AMTI (determined without regard to this item and the AMTI net operating loss deduction)) that is includable in AMTI. However, certain small corporations are wholly exempt from the AMT.
Distributions by a Fund that do not constitute earnings and profits will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in his shares; any excess will be treated as gain from the sale of his shares, as discussed below.
Distributions by a Fund will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Fund (or of another Fund). Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date.
Ordinarily, shareholders are required to take distributions by a Fund into account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year in accordance with the guidance that has been provided by the IRS.
PFIC INVESTMENTS. Those Funds that are permitted to invest in foreign equity securities may invest in stocks of foreign companies that are classified under the Code as passive foreign investment companies ("PFICs"). In general, a foreign company is classified as a PFIC if at least one-half of its assets constitute investment-type assets or 75% or more of its gross income is investment-type income.
The application of the PFIC rules may affect, among other things, the character of gains, the amount of gain or loss and the timing of the recognition of income with respect to PFIC stock, as well as subject the Funds themselves to tax on certain income from PFIC stock. For these reasons the amount that must be distributed to shareholders, and which will be taxed to shareholders as ordinary income or long-term capital gains, may be increased or decreased substantially as compared to a fund that did not invest in PFIC stock.
SALE OR REDEMPTION OF SHARES. A shareholder will recognize gain or loss
on the sale or redemption of shares of a Fund in an amount equal to the
difference between the proceeds of the sale or redemption and the shareholder's
adjusted tax basis in the shares. All or a portion of any loss so recognized may
be deferred if the shareholder purchases other shares of the Fund within thirty
(30) days before or after the sale or redemption. In general, any gain or loss
arising from (or treated as arising from) the sale or redemption of shares of a
Fund will be considered capital gain or loss and will be long-term capital gain
or loss if the shares were held for longer than one year. Currently, any
long-term capital gain recognized by a non-corporate shareholder will be subject
to tax at a maximum rate of 20%. However, any capital loss arising from the sale
or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends
received on such shares. Capital losses in any year are deductible only to the
extent of capital gains plus, in the case of a non-corporate taxpayer, $3,000 of
ordinary income.
If a shareholder (a) incurs a sales load in acquiring shares of a Fund,
(b) disposes of such shares less than 91 days after they are acquired, and (c)
subsequently acquires shares of the Fund or another fund at a reduced sales load
pursuant to a right to reinvest at such reduced sales load acquired in
connection with the acquisition of the shares disposed of, then the sales load
on the shares disposed of (to the extent of the reduction in the sales load on
the shares subsequently acquired) shall not be taken into account in determining
gain or loss on the shares disposed of, but shall be treated as incurred on the
acquisition of the shares subsequently acquired.
BACKUP WITHHOLDING. The Funds may be required to withhold 31% of distributions and/or redemption payments ("backup withholding") (however, this rate is reduced to 30.5% after August 6, 2001 and further reduced in phases to 28% for years 2006 and thereafter under The Economic Growth and Tax
Relief Reconciliation Act of 2001). For more information refer to "Purchase, Redemption and Pricing of Shares -- Backup Withholding."
FOREIGN SHAREHOLDERS. Taxation of a shareholder who, as to the United States, is a nonresident alien individual, foreign trust or estate, foreign corporation, or foreign partnership ("foreign shareholder"), depends on whether the income from a Fund is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from a Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, distributions (other than distributions of long-term capital gain) will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the redemption of shares of a Fund, capital gain dividends and amounts retained by a Fund that are designated as undistributed net capital gains.
If the income from a Fund is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends and any gains realized upon the sale or redemption of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations.
In the case of foreign non-corporate shareholders, a Fund may be required to withhold U.S. federal income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate) unless such shareholders furnish the Fund with proper notification of their foreign status (however, this rate is reduced to 30.5% after August 6, 2001 and further reduced in phases to 28% for years 2006 and thereafter under The Economic Growth and Tax Relief Reconciliation Act of 2001).
Foreign shareholders may be subject to U.S. withholding tax at a rate of 30% on the income resulting from the Fund's election to treat any foreign income tax paid by it as paid by its shareholders, but may not be able to claim a credit or deduction with respect to the withholding tax for the foreign tax treated as having been paid by them.
Foreign persons who file a United States tax return after December 31, 1996, for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the IRS for an individual taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form W-7 and accompanying instructions, please contact your tax advisor or the IRS.
Transfers by gift of shares of a Fund by a foreign shareholder who is a nonresident alien individual will not be subject to U.S. federal gift tax. An individual who, at the time of death, is a foreign shareholder will nevertheless be subject to U.S. federal estate tax with respect to shares at the graduated rates applicable to U.S. citizens and residents, unless a treaty exception applies. In the absence of a treaty, there is a $13,000 statutory estate tax credit.
The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund, including the applicability of foreign tax.
FOREIGN INCOME TAX. Investment income received by each Fund from sources within foreign countries may be subject to foreign income tax withheld at the source. The United States has entered into tax treaties with many foreign countries which entitle the Funds to a reduced rate of, or exemption from, tax on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of a Fund's assets to be invested in various countries is not known.
If more than 50% of the value of a Fund's total assets at the close of each taxable year consists of the stock or securities of foreign corporations, the Fund may elect to "pass through" to the Fund's shareholders the amount of foreign income tax paid by the Fund (the "Foreign Tax Election"). Pursuant to the Foreign Tax Election, shareholders will be required (i) to include in gross income, even though not
actually received, their respective pro-rata shares of the foreign income taxes
paid by the Fund that are attributable to any distributions they receive; and
(ii) either to deduct their pro-rata share of foreign tax in computing their
taxable income, or to use it (subject to various Code limitations) as a foreign
tax credit against Federal income tax (but not both). No deduction for foreign
tax may be claimed by a non-corporate shareholder who does not itemize
deductions or who is subject to alternative minimum tax.
Unless certain requirements are met, a credit for foreign tax is subject to the limitation that it may not exceed the shareholder's U.S. tax (determined without regard to the availability of the credit) attributable to the shareholder's foreign source taxable income. In determining the source and character of distributions received from a Fund for this purpose, shareholders will be required to allocate Fund distributions according to the source of the income realized by the Fund. Each Fund's gain from the sale of stock and securities and certain currency fluctuation gain and loss will generally be treated as derived from U.S. sources. In addition, the limitation on the foreign tax credit is applied separately to foreign source "passive" income, such as dividend income. Pursuant to the Taxpayer Relief Act of 1997, individuals who have no more than $300 ($600 for married persons filing jointly) of creditable foreign tax included on Form 1099 and whose foreign source income is all "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 filing Form 1116 with its corresponding requirement to report income and tax by country. Moreover, no foreign tax credit will be allowable to any shareholder who has not held his shares of the Fund for at least 16 days during the 30-day period beginning 15 days before the day such shares become ex-dividend with respect to any Fund distribution to which foreign income taxes are attributed (taking into account certain holding period reduction requirements of the Code). Because of these limitations, shareholders may be unable to claim a credit for the full amount of their proportionate shares of the foreign income tax paid by a Fund.
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS. The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on the date of this Statement of Additional Information. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation for ordinary income dividends, exempt-interest dividends and capital gain dividends from regulated investment companies often differ from the rules for U.S. federal income taxation described above. Distributions may also be subject to additional state, local and foreign taxes depending on each shareholder's particular situation. Non-U.S. shareholders may be subject to U.S. tax rules that differ significantly from those summarized above. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in the Funds.
DISTRIBUTION OF SECURITIES
DISTRIBUTION PLANS
The Trust has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to each Fund's Class A shares, Class B shares and Class C shares (collectively the "Plans"). Each Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate, shown immediately below, of the Fund's average daily net assets of Class A shares. Each Fund pays 1.00% of the average daily net assets of Class B shares and of Class C shares.
FUND CLASS A ---- ------- AIM Balanced Fund 0.25% AIM Basic Balanced Fund 0.35 AIM European Small Company Fund 0.35 AIM Global Utilities Fund 0.25 AIM International Emerging Growth Fund 0.35 AIM Mid Cap Basic Value Fund 0.35 AIM New Technology Fund 0.35 AIM Select Equity Fund 0.25 AIM Small Cap Equity Fund 0.35 AIM Value Fund 0.25 AIM Value II Fund 0.35 AIM Worldwide Spectrum Fund 0.35 |
All of the Plans compensate AIM Distributors for the purpose of financing any activity which is primarily intended to result in the sale of shares of the Funds. Such activities 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 each Plan.
Amounts payable by a Fund under the Plans need not be directly related to the expenses actually incurred by AIM Distributors on behalf of each Fund. 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 at any given time, the Funds 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.
AIM Distributors may from time to time waive or reduce any portion of its 12b-1 fee for Class A shares 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.
The Funds 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, including AIM Distributors, acting as principal, who furnish continuing personal shareholder services to their customers who purchase and own the applicable class of shares of the Fund. Under the terms of a shareholder service agreement, such personal shareholder services include responding to customer inquiries and providing customers with information about their investments. Any amounts not paid as a service fee under each Plan would constitute an asset-based sales charge.
Under a Shareholder Service Agreement, a 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 will be calculated at the end of each payment period for each business day of the Funds during such period at the annual rate specified in each agreement based on the average daily net asset value of the Funds' shares purchased or acquired through exchange. Fees 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 such Fund's shares are held.
Selected dealers and other institutions entitled to receive compensation for selling Fund shares may receive different compensation for selling shares of one particular class over another. Under the Plans, certain financial institutions which have entered into service agreements and which sell shares of the Funds 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.
Payments pursuant to the Plans are subject to any applicable limitations imposed by rules of the National Association of Securities Dealers, Inc. ("NASD").
See Appendix G for a list of the amounts paid by each class of shares to AIM Distributors pursuant to the Plans for the year, or period, ended December 31, 2000 and Appendix H for an estimate by category of the allocation of actual fees paid by each class of shares of each Fund pursuant to its respective distribution plan for the year or period ended December 31, 2000.
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 (the "Rule 12b-1 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 the Funds and its respective shareholders.
The anticipated benefits that may result from the Plans with respect to each Fund and/or the classes of each Fund and/or the classes of each Fund and its shareholders include but are not limited to the following: (1) rapid account access; (2) relatively predictable flow of cash; and (3) a well-developed, dependable network of shareholder service agents to help to curb sharp fluctuations in rates of redemptions and sales, thereby reducing the chance that an unanticipated increase in net redemptions could adversely affect the performance of each Fund.
Unless terminated earlier in accordance with their terms, the Plans continue from year to year as long as such continuance is specifically approved, in person, at least annually by the Board of Trustees, including a majority of the Rule 12b-1 Trustees. A Plan may be terminated as to any Fund or class by the vote of a majority of the Rule 12b-1 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, the Plans may be amended by the trustees, including a majority of the Rule 12b-1 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 Independent Trustees is committed to the discretion of the Independent Trustees.
The Class B Plan obligates 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, unless there has been a complete termination of the Class B Plan (as defined in such Plan) and the Class B Plan expressly authorizes AIM Distributors to assign, transfer or pledge its rights to payments pursuant to the Class B Plan.
DISTRIBUTOR
The Trust has entered into master distribution agreements, as amended, relating to the Funds (the "Distribution Agreements") with AIM Distributors, a registered broker-dealer and a wholly-owned subsidiary of AIM, pursuant to which AIM Distributors acts as the distributor of shares of the Funds. The address of AIM Distributors is P.O. Box 4739, Houston, Texas 77210-4739. Certain trustees and officers of the Trust are affiliated with AIM Distributors. See "Management of the Trust."
The Distribution Agreements provide AIM Distributors with the exclusive right to distribute shares of the Funds on a continuous basis directly and through institutions with whom AIM Distributors has entered into selected dealer agreements. AIM Distributors has not undertaken to sell any specified number of shares of any classes of the Funds.
AIM Distributors expects to pay sales commissions from its own resources to dealers and institutions who sell Class B and Class C shares of the Funds at the time of such sales.
Payments with respect to Class B shares will equal 4.0% 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. 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.
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.
The Trust (on behalf of any class of any 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; provided, however that a complete termination of the Class B Plan (as defined in such Plan) would terminate all payments to AIM Distributors. Termination of the Class B Plan or the Distribution Agreement for Class B shares would not affect the obligation of a Fund and its Class B shareholders to pay contingent deferred sales charges.
Total sales charges (front end and contingent deferred sales charges) paid in connection with the sale of shares of each Fund, if applicable, for the last three fiscal years ending December 31 are found in Appendix I.
CALCULATION OF PERFORMANCE DATA
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.
Average Annual Total Return Quotation
The standard formula for calculating average annual total return is as
follows:
n
P(1+T) =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).
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The average annual total returns for each Fund, with respect to its Class A, Class B and Class C shares, for the one, five and ten year periods (or since inception if applicable) ended June 30 are found in Appendix J.
Total returns quoted in advertising reflect all aspects of a Fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the Fund's net asset value per share over the period. Cumulative total return reflects the performance of a Fund over a stated period of time. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical investment in a Fund over a stated period of time, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period.
Each 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 a 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, a Fund may separate its cumulative and average annual returns into income results and capital gains or losses.
Alternative Total Return Quotations
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:
n P(1+U) =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.
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Cumulative total return across a stated period may be calculated as follows:
P(1+V)=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.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.
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Yield Quotation
Yield is a function of the type and quality of a Fund's investments, the maturity of the securities held in a Fund's portfolio and the operating expense ratio of the Fund. Yield is computed in accordance with standardized formulas described below and can be expected to fluctuate from time to time and is not necessarily indicative of future results. Accordingly, yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time.
Income calculated for purposes of calculating a Fund's yield differs from income as determined for other accounting purposes. Because of the different accounting methods used, and because of the compounding assumed in yield calculations, the yield quoted for a Fund may differ from the rate of distributions from the Fund paid over the same period or the rate of income reported in the Fund's financial statements.
The standard formula for calculating yield for each Fund is as follows:
Where a = dividends and interest earned during a stated 30-day
period. For purposes of this calculation, dividends are
accrued rather than recorded on the ex-dividend date.
Interest earned under this formula must generally be
calculated based on the yield to maturity of each
obligation (or, if more appropriate, based on yield to
call date).
b = expenses accrued during period (net of reimbursements).
c = the average daily number of shares outstanding during
the period.
d = the maximum offering price per share on the last day of
the period.
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The yield for the AIM Balanced Fund and AIM Global Utilities Fund are also found in Appendix J.
Performance Information
All advertisements of the Funds will disclose the maximum sales charge (including deferred sales charges) imposed on purchases of a 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 each Fund's performance is contained in that Fund's annual report to shareholders, which is available upon request and without charge.
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. Fee waivers or reductions or commitments to reduce expenses will have the effect of increasing that Fund's yield and total return.
Certain Funds may participate in the initial public offering (IPO) market in some market cycles. Because of these Fund's small asset bases, any investment the Funds may make in IPOs may significantly increase these Funds' total returns. As the Funds' assets grow, the impact of IPO investments will decline, which may decrease the Funds' total returns.
The performance of each Fund will vary from time to time and past results are not necessarily indicative of future results.
Total return and yield figures for the Funds are neither fixed nor guaranteed. 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. The following is a list of such publications or media entities:
Advertising Age Forbes Nation's Business Barron's Fortune New York Times Best's Review Hartford Courant Pension World Broker World Inc. Pensions & Investments Business Week Institutional Investor Personal Investor Changing Times Insurance Forum Philadelphia Inquirer Christian Science Monitor Insurance Week USA Today Consumer Reports Investor's Daily U.S. News & World Report Economist Journal of the American Wall Street Journal FACS of the Week Society of CLU & ChFC Washington Post Financial Planning Kiplinger Letter CNN Financial Product News Money CNBC Financial Services Week Mutual Fund Forecaster PBS Financial World |
Each Fund may also compare its performance to performance data of similar mutual funds as published by the following services:
Bank Rate Monitor Stanger Donoghue's Weisenberger Mutual Fund Values (Morningstar) Lipper, Inc. |
Each Fund's performance may also be compared in advertising to the performance of comparative benchmarks such as the following:
Lipper Balanced Fund Index Russell 2000--Registered Trademark-- Index Lipper European Fund Index Russell 3000--Registered Trademark-- Index Lipper Global Fund Index Russell 3000 Growth Index Lipper Utilities Fund Index Russell Mid Cap--Trademark-- Index Lipper International Fund Index Lehman Aggregate Bond Index Lipper International Fund Index Dow Jones Global Utilities Index Lipper Multi Cap Core Fund Index MSCI All Country World Index Lipper Multi Cap Growth Fund Index MSCI EAFE Index Lipper Science & Technology Fund Index MSCI Europe Index Lipper Small Cap Core Fund Index PSE Tech 100 Index Lipper Small Cap Growth Fund Index Standard & Poor's 500 Stock Index Lipper Large Cap Core Fund Index Wilshire 5000 Index Russell 1000--Registered Trademark-- Index NASDAQ Index Russell 1000 Value Index |
Each Fund may also compare its performance to rates on Certificates of Deposit and other fixed rate investments such as the following:
10 year Treasury Notes
30 year Treasury Bonds
90 day Treasury Bills
Advertising for the Funds may from time to time include discussions of general economic conditions and interest rates. Advertising for such Funds may also include references 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; (iii) certain institutional shareholders; (iv) measurements of risk, including standard deviation, Beta and Sharpe ratios; and/or (v) capitalization and sector analyses of holdings in the Funds' portfolios.
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.
APPENDIX A
RATINGS OF DEBT SECURITIES
The following is a description of the factors underlying the debt ratings of Moody's, S&P, Fitch IBCA, Inc. ("Fitch"):
MOODY'S BOND RATINGS
Moody's describes its ratings for corporate bonds as follows:
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-edge." 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. These 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 sometime 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.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa in its corporate bond rating system. The modifier 1 indicates that the security 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 issue ranks in the lower end of its generic rating category.
MOODY'S MUNICIPAL BOND RATINGS
Aaa: Bonds 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 edge." 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 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 risks appear somewhat larger than in Aaa securities.
A: Bonds 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 sometime in the future.
Baa: Bonds 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 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 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 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 rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds 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.
Note: Bonds in the Aa group which Moody's believes possess the strongest investment attributes are designated by the symbol Aa1.
Note: Also, Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa to B. The modifier indicates that the issue 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 issue ranks in the lower end of its generic category.
MOODY'S DUAL RATINGS
In the case of securities with a demand feature, two ratings are assigned: one representing an evaluation of the degree of risk associated with scheduled principal and interest payments, and the other representing an evaluation of the degree of risk associated with the demand feature.
MOODY'S SHORT-TERM LOAN RATINGS
Moody's ratings for state and municipal short-term obligations will be designated Moody's Investment Grade or (MIG). Such ratings recognize the differences between short-term credit risk and long-term risk. Factors affecting the liquidity of the borrower and short-term cyclical elements are critical in short-term ratings, while other factors of major importance in bond risk, long-term secular trends for example, may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand feature variable rate demand obligation (VRDO). Such ratings will be designated as VMIG or, if the demand feature is not rated, as NR. Short-term ratings on issues with demand features are differentiated by the use of the VMIG symbol to reflect such characteristics as payment upon periodic demand rather than fixed maturity dates and payment relying on external liquidity. Additionally, investors should be alert to the fact that the source of payment may be limited to the external liquidity with no or limited legal recourse to the issuer in the event the demand is not met.
A VMIG rating may also be assigned to commercial paper programs. Such programs are characterized as having variable short-term maturities but having neither a variable rate nor demand feature.
Moody's short-term ratings are designated Moody's Investment Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4.
Gradations of investment quality are indicated by rating symbols, with each symbol representing a group in which the quality characteristics are broadly the same.
MIG 1/VMIG 1: This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2: This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.
MIG 3/VMIG 3: This designation denotes favorable quality. All security elements are accounted for but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established.
MIG 4/VMIG 4: This designation denotes adequate quality. Protection commonly regarded as required of an investment security is present and although not distinctly or predominantly speculative, there is specific risk.
MOODY'S COMMERCIAL PAPER RATINGS
Moody's commercial paper ratings are opinions of the ability of issuers to repay punctually promissory obligations not having an original maturity in excess of nine months.
PRIME-1: Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
leading market positions in well-established industries; high rates of return on
Funds employed; conservative capitalization structures 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.
PRIME-2: Issuers rated Prime-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3: Issuers rated Prime-3 (or related supported institutions) have an acceptable capacity for repayment of short-term promissory obligations. The effects of industry characteristics and market composition may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and the requirement for relatively high financial leverage. Adequate alternate liquidity is maintained.
NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime rating categories.
Note: A Moody's commercial paper rating may also be assigned as an evaluation of the demand feature of a short-term or long-term security with a put option.
S&P BOND RATINGS
S&P describes its ratings for corporate bonds as follows:
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree.
A: Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories.
BB-B-CCC-CC-C: Debt rated BB, B, CCC, CC and C is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. BB indicates the lowest degree of speculation and C the highest. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or large exposure to adverse conditions.
S&P MUNICIPAL BOND RATINGS
An S&P municipal bond rating is a current assessment of the creditworthiness of an obligor with respect to a specific obligation. This assessment may take into consideration obligors such as guarantors, insurers, or lessees.
The ratings are based, in varying degrees, on the following considerations: likelihood of default - capacity and willingness of the obligor as to the timely payment of interest and repayment of principal in accordance with the terms of the obligation; nature of and provisions of the obligation; and protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree.
Note: Ratings within the AA and A major rating categories may be modified by the addition of a plus (+) sign or minus (-) sign to show relative standing.
S&P DUAL RATINGS
S&P assigns "dual" ratings to all debt issues that have a put option or demand feature as part of their structure.
The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term debt rating symbols are used for bonds to denote the long-term maturity and the commercial paper rating symbols for the put option (for example, AAA/A-1+). With short-term demand debt, the note rating symbols are used with the commercial paper rating symbols (for example, SP-1+/A-1+).
S&P MUNICIPAL NOTE RATINGS
An S&P note rating reflects the liquidity factors and market-access risks unique to notes. Notes maturing in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment: amortization schedule (the larger the final maturity relative to other maturities, the more likely the issue will be treated as a note); and source of payment (the more the issue depends on the market for its refinancing, the more likely it is to be treated as a note).
Note rating symbols and definitions are as follows:
SP-1: Strong capacity to pay principal and interest. Issues determined to possess very strong characteristics are given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
SP-3: Speculative capacity to pay principal and interest.
S&P COMMERCIAL PAPER RATINGS
An S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days.
Rating categories are as follows:
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 are denoted with a plus sign (+) designation.
A-2: Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated A-1.
A-3: Issues carrying this designation have adequate capacity for timely payment. They are, however, more vulnerable to the adverse effects of changes in circumstances than obligations carrying the higher designations.
B: Issues with this rating are regarded as having only speculative capacity for timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful capacity for payment.
D: Debt with this rating is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due, even if the applicable grace period has not expired, unless it is believed that such payments will be made during such grace period.
FITCH INVESTMENT GRADE BOND RATINGS
Fitch investment grade bond ratings provide a guide to investors in determining the credit risk associated with a particular security. The ratings represent Fitch's assessment of the issuer's ability to meet the obligations of a specific debt issue in a timely manner.
The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer, the current and prospective financial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer's future financial strength and credit quality.
Fitch ratings do not reflect any credit enhancement that may be provided by insurance policies or financial guaranties unless otherwise indicated.
Bonds carrying the same rating are of similar but not necessarily identical credit quality since the rating categories do not fully reflect small differences in the degrees of credit risk.
Fitch ratings are not recommendations to buy, sell or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature of taxability of payments made in respect of any security.
Fitch ratings are based on information obtained from issuers, other obligors, underwriters, their experts, and other sources Fitch believes to be reliable. Fitch does not audit or verify the truth or accuracy of such information. Ratings may be changed, suspended, or withdrawn as a result of changes in, or the unavailability of, information or for other reasons.
AAA: Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA." Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+."
A: Bonds considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these bonds and, therefore, impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the "AAA" category.
NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion of a project or the occurrence of a specific event.
SUSPENDED: A rating is suspended when Fitch deems the amount of information available from the issuer to be inadequate for rating purposes.
WITHDRAWN: A rating will be withdrawn when an issue matures or is called or refinanced, and, at Fitch's discretion, when an issuer fails to furnish proper and timely information.
FITCHALERT: Ratings are placed on FitchAlert to notify investors of an occurrence that is likely to result in a rating change and the likely direction of such change. These are designated as "Positive," indicating a potential upgrade, "Negative," for potential downgrade, or "Evolving," where ratings may be raised or lowered. FitchAlert is relatively short-term, and should be resolved within 12 months.
RATINGS OUTLOOK
An outlook is used to describe the most likely direction of any rating change over the intermediate term. It is described as "Positive" or "Negative." The absence of a designation indicates a stable outlook.
FITCH SPECULATIVE GRADE BOND RATINGS
Fitch speculative grade bond ratings provide a guide to investors in determining the credit risk associated with a particular security. The ratings ("BB" to "C") represent Fitch's assessment of the likelihood of timely payment of principal and interest in accordance with the terms of obligation for bond issues not in default. For defaulted bonds, the rating ("DDD" to "D") is an assessment of the ultimate recovery value through reorganization of liquidation.
The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer or possible recovery value in bankruptcy, the current and prospective financial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer's future financial strength.
Bonds that have the same rating are of similar but not necessarily identical credit quality since rating categories cannot fully reflect the differences in degrees of credit risk.
BB: Bonds are considered speculative. The obligor's ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial alternatives can be identified, which could assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor's limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue.
CCC: Bonds have certain identifiable characteristics that, if not remedied, may lead to default. The ability to meet obligations requires an advantageous business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D: Bonds are in default on interest and/or principal payments. Such bonds are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. "DDD" represents the highest potential for recovery on these bonds, and "D" represents the lowest potential for recovery.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the "DDD," "DD," or "D" categories.
FITCH SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes.
The short-term rating places greater emphasis than a long-term rating on the existence of liquidity necessary to meet the issuer's obligations in a timely manner.
Fitch short-term ratings are as follows:
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated "F-1+."
F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" and "F-1" ratings.
F-3: Fair Credit Quality. Issues assigned this rating have characteristics suggesting that the degree of assurance for timely payment is adequate, however, near-term adverse changes could cause these securities to be rated below investment grade.
F-S: Weak Credit Quality. Issues assigned this rating have characteristics suggesting a minimal degree of assurance for timely payment and are vulnerable to near-term adverse changes in financial and economic conditions.
D: Default. Issues assigned this rating are in actual or imminent payment default.
LOC: The symbol LOC indicates that the rating is based on a letter of credit issued by a commercial bank.
APPENDIX B
TRUSTEES AND OFFICERS
Unless otherwise indicated, the address of each trustee and officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
POSITION(S)
HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND AGE REGISTRANT AT LEAST THE PAST 5 YEARS
--------------------- ----------- ------------------------------
*ROBERT H. GRAHAM (54) Trustee, Chairman Chairman, President and Chief Executive Officer,
and President A I M Management Group Inc.; Chairman and 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
Suite 2400 company); and Trustee, The Badgley Funds.
San Francisco, CA 94111
BRUCE L. CROCKETT (57) Trustee Director, ACE Limited (insurance company).
906 Frome Lane Formerly, Director, President and Chief Executive
McLean, VA 22102 Officer, COMSAT 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
Baltimore, MD 21210 Insurance Company and Monumental General Insurance
Company; and Chairman of the Board of Equitable
Bancorporation.
|
POSITION(S)
HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND AGE REGISTRANT AT LEAST THE PAST 5 YEARS
--------------------- ----------- ------------------------------
ALBERT R. DOWDEN (59) Trustee Chairman of the Board of Directors, Cortland Trust,
1815 Central Park Drive Inc. (investment company) and DHJ Media, Inc.; and
P.O. Box 774000 - PMB #222 Director, Magellan Insurance Company. Formerly,
Steamboat Springs, CO 80477 Director, President 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.
EDWARD K. DUNN, JR. (66) Trustee Formerly, Chairman of the Board of Directors,
2 Hopkins Plaza Mercantile Mortgage Corp.; Vice Chairman of the
8th Floor, Suite 805 Board of Directors, President and Chief Operating
Baltimore, MD 21201 Officer, Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares Corp.
JACK M. FIELDS (49) Trustee Chief Executive Officer, Twenty First Century Group,
434 New Jersey Avenue, SE Inc. (governmental affairs company). Formerly,
Washington, DC 20003 Member of the U.S. House of Representatives.
**CARL FRISCHLING (64) Trustee Partner, Kramer Levin Naftalis & Frankel LLP (law
919 Third Avenue firm).
New York, NY 10022
PREMA MATHAI-DAVIS (50) Trustee Member, Visiting Committee, Harvard University
370 East 76th Street Graduate School of Education, New School University.
New York, NY 10021 Formerly, Chief 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
|
** 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.
POSITION(S)
HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND AGE REGISTRANT AT LEAST THE PAST 5 YEARS
--------------------- ----------- ------------------------------
RUTH H. QUIGLEY (66) Trustee Private investor; and President, Quigley Friedlander
1055 California Street & Co., Inc. (financial advisory services firm) from
San Francisco, CA 94108 1984 to 1986.
LOUIS S. SKLAR (62) Trustee Executive Vice President, Development and
The Williams Tower Operations, Hines Interests Limited Partnership
50th Floor (real estate development).
2800 Post Oak Blvd.
Houston, TX 77056
GARY T. CRUM (54) Senior Vice Director and President, A I M Capital Management,
President 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) Senior Vice Director, Senior Vice President, General Counsel and
President and Secretary, A I M Advisors, Inc.; Director, Senior
Secretary 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,
and Treasurer Inc.
ROBERT G. ALLEY (53) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
STUART W. COCO (46) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
MELVILLE B. COX (57) 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 Distributors, Inc.,
A I M Fund Services, Inc.
|
POSITION(S)
HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND AGE REGISTRANT AT LEAST THE PAST 5 YEARS
--------------------- ----------- ------------------------------
KAREN DUNN KELLEY (41) Vice President Senior Vice President, A I M Capital Management,
Inc.; Director, Fund Management Company; and Vice
President, A I M Advisors, Inc.
EDGAR M. LARSEN (61) Vice President Vice President, A I M Advisors, Inc. and A I M
Capital Management, Inc.
|
APPENDIX C
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
To the best knowledge of the Trust, the names and addresses of the record and beneficial holders of 5% or more of the outstanding shares of each class of the Trust's equity securities and the percentage of the outstanding shares held by such holders are set forth below. Unless otherwise indicated below, the Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
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.
All information listed below is as of October 1, 2001.
AIM BALANCED FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
---------------- ------------------- ------------------- -------------------
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 10.31% 9.54% 17.54%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
American Express Trust Co.
FBO American Express Trust
Retirement Service Plans
1200 Northstar 7.27% -- --
West P.O. Box 534
Minneapolis, MN 55440-0534
|
AIM BASIC BALANCED FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
A I M Advisors, Inc.**
ATTN: David Hessel
11 Greenway Plaza, Suite 100 94.82% 95.16%** 99.53%**
Houston, TX 77046
|
* Owned of record and beneficially.
** Presumed to be a control person because of beneficial ownership of 25% or more of the Fund.
AIM EUROPEAN SMALL COMPANY FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
A I M Advisors, Inc.
ATTN: David Hessel
11 Greenway Plaza, Suite 100 11.84%* -- --
Houston, TX 77046
Dain Rauscher Incorporated
FBO Tobias Hlavinka
P.O. Box 1068 -- -- 6.82%
East Bernard, TX 77435-1068
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 5.53% 28.24% 15.98%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
Painewebber
FBO Glenda F. Cordts
P.O. Box 1108 -- -- 6.96%
New York, NY 10268-1108
Painewebber
FBO The Tocker Foundation
3814 Medical Parkway -- 8.39% --
Austin, TX 78756-4002
|
* Owned of record and beneficially.
AIM GLOBAL UTILITIES FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Charles Schwab & Co., Inc.
Reinvestment Account
101 Montgomery Street 18.96% -- --
San Francisco, CA 94104-0000
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration -- 5.22% 11.94%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
|
AIM INTERNATIONAL EMERGING GROWTH FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 14.98% 25.33% 19.30%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
A I M Advisors, Inc.
ATTN: David Hessel
11 Greenway Plaza, Suite 100 13.07%* -- --
Houston, TX 77046
James H. Barnhardt, Jr.
2331 Rock Creek Drive
Charlotte, NC 28226-0101 -- -- 5.18%
Joel and Holly Dobberpuhl
1710 Lawrence Road
Franklin, TN 37069-1700 8.32%* -- --
Lanny H. Sachnowitz
6317 Belmont Street
Houston, TX 77005 5.16%* -- --
|
* Owned of record and beneficially.
AIM MID CAP BASIC VALUE 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.
AIM NEW TECHNOLOGY FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Morgan Keegan & Company, Inc.
FBO David P. Barnard
14 Greenway Plaza #7R 9.00% -- --
Houston, TX 77046-1502
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 6.08% 5.25% 5.31%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
|
AIM SELECT EQUITY FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 5.08% 11.78% 13.40%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
|
AIM SMALL CAP EQUITY FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
---------------- ------------------- ------------------- -------------------
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 13.33% 12.53% 26.61%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
|
AIM VALUE FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 10.34% 12.12% 23.66%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
|
AIM VALUE II FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration 9.54% 16.42% 23.36%
4800 Deer Lake Dr., East, 2nd Floor
Jacksonville, FL 32246
|
AIM WORLDWIDE SPECTRUM FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Joel and Holly Dobberpuhl**
1710 Lawrence Road
Franklin, TN 37069-1700 33.84%* -- --
A I M Advisors, Inc.
Attn: David Hessel
11 Greenway Plaza, Suite 100 13.91%* -- --
Houston, TX 77046
AIM Foundation
11 Greenway Plaza, Suite 2600
Houston, TX 77046 10.77% -- --
|
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------- ------------------- -------------------
NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD
------------------- ------------------- ------------------- -------------------
Dain Rauscher Custodian
Janita Burmeister
8554 Quarles Road N. -- -- 5.14%
Maple Grove, MN 55311
Merrill Lynch Pierce Fenner & Smith
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr., East, 2nd Floor -- 4.83% 17.48%
Jacksonville, FL 32246
NFSC FEBO
FBO Anthony A. Sabia, Jr.
201 Ponus Ave. Ext. -- -- 9.83%
Norwalk, CT 06850
|
* Owned of record and beneficially.
** Presumed to be a control person because of beneficial ownership of 25% or more of the Fund.
MANAGEMENT OWNERSHIP
As of October 1, 2001, the trustees and officers as a group owned less than 1% of the shares of any Fund.
APPENDIX D
MANAGEMENT FEES
For the last three fiscal years ended March 31, the management fees by each Fund, the amounts waived by AIM and the net fee paid by each Fund were as follows:
FUND NAME 2000 1999
--------- -------------------------------------------- ---------------------------------------------
MANAGEMENT MANAGEMENT NET MANAGEMENT MANAGEMENT MANAGEMENT NET MANAGEMENT
FEE PAYABLE FEE WAIVERS FEE PAID FEE PAYABLE FEE WAIVERS FEE PAID
----------- ----------- -------------- ----------- ----------- --------------
AIM Balanced Fund $ 19,294,478 $ -0- $ 19,294,478 $ 13,624,208 $ -0- $ 13,624,208
AIM Basic Balanced
Fund* N/A N/A N/A N/A N/A N/A
AIM European Small
Company Fund** 27,495 27,495 -0- N/A N/A N/A
AIM Global
Utilities Fund 2,457,103 -0- 2,457,103 1,802,726 -0- 1,802,726
AIM International
Emerging Growth
Fund** 20,500 20,500 -0- N/A N/A N/A
AIM Mid Cap Basic
Value Fund*** N/A N/A N/A N/A N/A N/A
AIM New Technology
Fund** 169,735 126,575 43,160 N/A N/A N/A
AIM Select Equity
Fund 8,431,513 -0- 8,431,513 5,507,389 -0- 5,507,389
AIM Small Cap
Equity Fund** 89,083 89,083 -0- N/A N/A N/A
AIM Value Fund 178,352,446 11,485,909 166,866,537 141,196,457 5,137,356 136,059,101
AIM Value II Fund** 184,046 146,253 37,793 N/A N/A N/A
AIM Worldwide
Spectrum Fund**** 69 69 -0- N/A N/A N/A
|
FUND NAME 1998
--------- ---------------------------------------------
MANAGEMENT MANAGEMENT NET MANAGEMENT
FEE PAYABLE FEE WAIVERS FEE PAID
----------- ----------- --------------
AIM Balanced Fund $ 9,043,320 $ -0- $ 9,043,320
AIM Basic Balanced
Fund* N/A N/A N/A
AIM European Small
Company Fund** N/A N/A N/A
AIM Global
Utilities Fund 1,652,662 -0- 1,652,662
AIM International
Emerging Growth
Fund** N/A N/A N/A
AIM Mid Cap Basic
Value Fund*** N/A N/A N/A
AIM New Technology
Fund** N/A N/A N/A
AIM Select Equity
Fund 4,362,261 -0- 4,362,261
AIM Small Cap
Equity Fund** N/A N/A N/A
AIM Value Fund 98,360,939 3,423,939 94,937,000
AIM Value II Fund** N/A N/A N/A
AIM Worldwide
Spectrum Fund**** N/A N/A N/A
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001.
**** Commenced operations on December 29, 2000.
APPENDIX E
ADMINISTRATIVE SERVICES FEES
The Funds paid AIM the following amounts for administrative services for the last three fiscal years ended December 31:
FUND NAME 2000 1999 1998
--------- -------- -------- --------
AIM Balanced Fund $219,636 $158,046 $104,952
AIM Basic Balanced Fund* N/A N/A N/A
AIM European Small Company
Fund** 16,667 N/A N/A
AIM Global Utilities Fund 111,177 8,999 85,383
AIM International Emerging
Growth Fund** 16,667 N/A N/A
AIM Mid Cap Basic Value
Fund*** N/A N/A N/A
AIM New Technology Fund** 16,667 N/A N/A
AIM Select Equity Fund 144,211 110,205 78,567
AIM Small Cap Equity Fund** 16,667 N/A N/A
AIM Value Fund 959,833 631,457 323,939
AIM Value II Fund** 16,667 N/A N/A
AIM Worldwide Spectrum
Fund**** 410 N/A N/A
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001.
**** Commenced operations on December 29, 2000.
APPENDIX F
BROKERAGE COMMISSIONS
Brokerage commissions paid by each of the Funds listed below for the last three fiscal years were as follows:
FUND 2000 1999 1998 ---- ------------ ------------ ------------ AIM Balanced Fund ................................ $ 1,892,019 $ 1,595,462 $ 1,328,000 AIM Basic Balanced Fund(1) ....................... N/A N/A N/A AIM European Small Company Fund(2) ............... 38,807 N/A N/A AIM Global Utilities Fund(5) ..................... 593,061 198,511 209,000 AIM International Emerging Growth Fund(2) ........ 27,889 N/A N/A AIM Mid Cap Basic Value Fund(3) .................. N/A N/A N/A AIM New Technology Fund(2) ....................... 10,477 N/A N/A AIM Select Equity Fund(6) ........................ 1,152,944 592,091 906,000 AIM Small Cap Equity Fund(2) ..................... 65,567 N/A N/A AIM Value Fund(7) ................................ 34,775,189 23,804,242 34,489,000 AIM Value II Fund(2) ............................. 57,425 N/A N/A AIM Worldwide Spectrum Fund(4) ................... -- N/A N/A |
(1) Commenced operations on September 28, 2001.
(2) Commenced operations on August 31, 2000.
(3) Commenced operations on December 31, 2001.
(4) Commenced operations on December 29, 2000.
(5) The variation in brokerage commission paid by the AIM Global Utilities Fund for the fiscal year ended December 31, 2000, as compared to the two prior fiscal years, was due to a significant fluctuation in asset levels, increased portfolio turnover and an increase in transactions on which commissions were paid.
(6) The variation in brokerage commission paid by the AIM Select Equity Fund for the fiscal year ended December 31, 2000, as compared to the two prior fiscal years, was due to a significant increase in assets of the fund.
(7) The variation in brokerage commission paid by the AIM Value Fund for the fiscal year ended December 31, 2000, as compared to the two prior fiscal years, was due to a significant fluctuation in asset levels, large cash inflows and an increase in transactions on which commissions were paid.
APPENDIX G
AMOUNTS PAID TO A I M DISTRIBUTORS, INC. PURSUANT TO DISTRIBUTION PLANS
LIST OF AMOUNTS PAID BY EACH CLASS OF SHARES TO AIM DISTRIBUTORS
PURSUANT TO THE PLANS FOR THE YEAR OR PERIOD ENDED DECEMBER 31, 2000.
CLASS A CLASS B CLASS C
FUND SHARES SHARES SHARES
---- ---------- ----------- ----------
AIM Balanced Fund 5,444,457 13,096,097 2,965,032
AIM Basic Balanced Fund* N/A N/A N/A
AIM European Small Company Fund** 6,979 6,509 2,492
AIM Global Utilities Fund 684,300 1,637,899 139,107
AIM International Emerging Growth Fund** 4,291 4,682 4,636
AIM Mid Cap Basic Value Fund*** N/A N/A N/A
AIM New Technology Fund** 35,318 43,533 25,294
AIM Select Equity Fund 1,370,376 7,047,426 541,490
AIM Small Cap Equity Fund** 21,788 28,721 13,831
AIM Value Fund 31,857,597 144,649,550 12,863,973
AIM Value II Fund** 35,220 100,325 44,441
AIM Worldwide Spectrum Fund**** 29 N/A N/A
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001.
**** Commenced operations on December 29, 2000.
APPENDIX H
ALLOCATION OF ACTUAL FEES PAID PURSUANT TO DISTRIBUTION PLANS
An estimate by category of the allocation of actual fees paid by Class A Shares of the Funds during the year ended December 31, 2000, follows:
PRINTING & UNDERWRITERS DEALERS
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION
------------ ------------ ------------ ------------ ------------
AIM Balanced Fund ................................ $ 41,610 $ 3,738 $ 9,720 $ -0- $ 5,389,389
AIM Basic Balanced Fund* ......................... N/A N/A N/A N/A N/A
AIM European Small Company Fund** ................ 562 36 -0- -0- 6,381
AIM Global Utilities Fund ........................ 2,106 218 620 -0- 681,356
AIM International Emerging Growth Fund** ......... 247 25 -0- -0- 4,019
AIM Mid Cap Basic Value Fund*** .................. N/A N/A N/A N/A N/A
AIM New Technology Fund** ........................ 3,999 277 513 -0- 30,529
AIM Select Equity Fund ........................... 8,654 781 2,076 -0- 1,358,865
AIM Small Cap Equity Fund** ...................... 2,583 140 389 -0- 18,676
AIM Value Fund ................................... 183,184 17,966 52,041 -0- 31,604,406
AIM Value II Fund** .............................. 3,486 222 353 -0- 31,159
AIM Worldwide Spectrum Fund**** .................. 8 -0- -0- -0- 21
|
An estimate by category of the allocation of actual fees paid by Class B Shares of the Funds during the year ended December 31, 2000, follows:
PRINTING & UNDERWRITERS DEALERS
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION
------------ ------------ ------------ ------------ ------------
AIM Balanced Fund ................................ $ 340,319 $ 32,687 $ 91,288 $ 9,822,073 $ 2,809,730
AIM Basic Balanced Fund* ......................... N/A N/A N/A N/A N/A
AIM European Small Company Fund** ................ 573 57 -0- 4,882 997
AIM Global Utilities Fund ........................ 30,335 2,844 8,690 1,228,424 367,606
AIM International Emerging Growth Fund** ......... 439 -0- -0- 3,512 731
AIM Mid Cap Basic Value Fund*** .................. N/A N/A N/A N/A N/A
AIM New Technology Fund** ........................ 4,876 286 794 32,650 4,927
AIM Select Equity Fund ........................... 109,754 10,374 28,470 5,285,569 1,613,259
AIM Small Cap Equity Fund** ...................... 3,308 156 433 21,541 3,283
AIM Value Fund ................................... 2,711,242 279,510 825,380 108,487,162 32,346,256
AIM Value II Fund** .............................. 6,556 12 7,842 75,244 10,671
AIM Worldwide Spectrum Fund**** .................. -0- -0- -0- -0- -0-
|
An estimate by category of the allocation of actual fees paid by Class C shares of the Funds during the year ended December 31, 2000, follows:
PRINTING & UNDERWRITERS DEALERS
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION
------------ ------------ ------------ ------------ ------------
AIM Balanced Fund ................................ $ 145,840 $ 13,662 $ 37,401 $ 967,580 $ 1,800,549
AIM Basic Balanced Fund* ......................... N/A N/A N/A N/A N/A
AIM European Small Company Fund** ................ 552 -0- -0- 1,656 285
AIM Global Utilities Fund ........................ 8,133 804 3,352 67,030 59,788
AIM International Emerging Growth Fund** ......... 513 -0- -0- 3,081 1,042
AIM Mid Cap Basic Value Fund*** .................. N/A N/A N/A N/A N/A
AIM New Technology Fund** ........................ 3,247 235 435 15,669 5,708
AIM Select Equity Fund ........................... 32,725 3,016 7,818 217,799 280,132
AIM Small Cap Equity Fund** ...................... 2,280 177 -0- 8,844 2,530
AIM Value Fund ................................... 730,071 35,663 652,614 5,598,763 5,846,862
AIM Value II Fund** .............................. 6,405 409 1,136 30,661 5,830
AIM Worldwide Spectrum Fund**** .................. -0- -0- -0- -0- -0-
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001.
**** Commenced operations on December 29, 2000.
APPENDIX I
TOTAL SALES CHARGES
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 AIM Distributors for the last three fiscal years ending December 31:
2000 1999 1998
------------------------- ------------------------- -------------------------
SALES AMOUNT SALES AMOUNT SALES AMOUNT
CHARGES RETAINED CHARGES RETAINED CHARGES RETAINED
----------- ----------- ----------- ----------- ----------- -----------
AIM Balanced Fund ........................... $ 7,582,977 $ 1,348,605 $ 4,738,340 $ 823,856 $ 6,719,092 $ 1,172,743
AIM Basic Balanced Fund* .................... N/A N/A N/A N/A N/A N/A
AIM European Small Company Fund** ........... 127,183 18,828 N/A N/A N/A N/A
AIM Global Utilities Fund ................... 1,102,169 174,240 363,844 56,996 407,940 71,338
AIM International Emerging Growth Fund** .... 52,378 8,538 N/A N/A N/A N/A
AIM Mid Cap Basic Value Fund*** ............. N/A N/A N/A N/A N/A N/A
AIM New Technology Fund** ................... 895,102 142,151 N/A N/A N/A N/A
AIM Select Equity Fund ...................... 3,195,845 511,968 1,100,704 176,131 778,128 136,229
AIM Small Cap Equity Fund** ................. 421,500 66,008 N/A N/A N/A N/A
AIM Value Fund .............................. 44,597,613 6,912,097 47,407,647 7,218,373 30,111,088 4,259,204
AIM Value II Fund** ......................... 838,943 130,652 N/A N/A N/A N/A
AIM Worldwide Spectrum Fund**** ............. -0- -0- N/A N/A N/A N/A
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001
**** Commenced operations on December 29, 2000.
The following chart reflects the contingent deferred sales charges paid by Class A, Class B and Class C shareholders and retained by AIM Distributors for the last three fiscal years ended December 31:
2000 1999 1998
------------ ------------ ------------
AIM Balanced Fund ................................ $ 284,148 $ 150,341 $ 106,255
AIM Basic Balanced Fund* ......................... N/A N/A N/A
AIM European Small Company Fund** ................ 47 N/A N/A
AIM Global Utilities Fund ........................ 16,641 67,367 71,709
AIM International Emerging Growth Fund** ......... 364 N/A N/A
AIM Mid Cap Basic Value Fund*** .................. N/A N/A N/A
AIM New Technology Fund** ........................ 16,403 N/A N/A
AIM Select Equity Fund ........................... 32,980 75,951 105,783
AIM Small Cap Equity Fund** ...................... 541 N/A N/A
AIM Value Fund ................................... 1,003,943 1,053,955 1,498,642
AIM Value II Fund** .............................. 1,234 N/A N/A
AIM Worldwide Spectrum Fund**** .................. -0- N/A N/A
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001.
**** Commenced operations on December 29, 2000.
APPENDIX J
PERFORMANCE DATA
The average annual total returns for each Fund, with respect to its Class A shares, for the periods ended June 30, 2001, are as follows:
PERIODS ENDED
JUNE 30, 2001
-------------------------------------- INCEPTION
CLASS A SHARES: 1 YEAR 5 YEARS 10 YEARS DATE
-------------- ------ ------- -------- ---------
AIM Balanced Fund.................................. 16.44% 9.18% 12.67% 03/31/78
AIM Basic Balanced Fund............................ N/A N/A N/A 09/28/01
AIM European Small Company Fund.................... N/A N/A N/A 08/31/00
AIM Global Utilities Fund.......................... -23.74% 10.94% 11.25% 01/19/88
AIM International Emerging Growth Fund............. N/A N/A N/A 08/31/00
AIM Mid Cap Basic Value Fund....................... N/A N/A N/A 12/31/01
AIM New Technology Fund............................ N/A N/A N/A 08/31/00
AIM Select Equity Fund............................. -34.33% 11.97% 11.85% 12/04/67
AIM Small Cap Equity Fund.......................... N/A N/A N/A 08/31/00
AIM Value Fund..................................... -24.22% 11.92% 16.03% 05/01/84
AIM Value II Fund.................................. N/A N/A N/A 08/31/00
AIM Worldwide Spectrum Fund........................ N/A N/A N/A 12/29/00
|
The average annual total returns for each Fund, with respect to its Class B shares, for the periods ended June 30, 2001, are as follows:
PERIODS ENDED
JUNE 30, 2001
---------------------------------------
SINCE INCEPTION
CLASS B SHARES: 1 YEAR 5 YEARS INCEPTION DATE
-------------- ------ ------- --------- ---------
AIM Balanced Fund.................................. -17.15% 9.08% 9.87% 10/18/93
AIM Basic Balanced Fund............................ N/A N/A N/A 09/28/01
AIM European Small Company Fund.................... N/A N/A N/A 08/31/00
AIM Global Utilities Fund.......................... -23.45% 11.10% 8.42% 09/01/93
AIM International Emerging Growth Fund............. N/A N/A N/A 08/31/00
AIM Mid Cap Basic Value Fund....................... N/A N/A N/A 12/31/01
AIM New Technology Fund............................ N/A N/A N/A 08/31/00
AIM Select Equity Fund............................. -34.05% 12.09% 12.08% 09/01/93
AIM Small Cap Equity Fund.......................... N/A N/A N/A 08/31/00
AIM Value Fund..................................... -24.04% 12.03% 12.90% 10/18/93
AIM Value II Fund.................................. N/A N/A N/A 08/31/00
AIM Worldwide Spectrum Fund........................ N/A N/A N/A 12/29/00
|
* Commenced operations on September 28, 2001.
** Commenced operations on August 31, 2000.
*** Commenced operations on December 31, 2001.
**** Commenced operations on December 29, 2000.
The average annual total returns for each Fund, with respect to its Class C shares, for the periods ended June 30, 2001, are as follows:
PERIODS ENDED
JUNE 30, 2001
------------------------------ INCEPTION
CLASS C SHARES: 1 YEAR SINCE INCEPTION DATE
-------------- ------ --------------- ---------
AIM Balanced Fund..................................... -13.77% 5.20% 08/04/97
AIM Basic Balanced Fund............................... N/A N/A 09/28/01
AIM European Small Company Fund....................... N/A N/A 08/31/00
AIM Global Utilities Fund............................. -20.61% 9.22% 08/04/97
AIM International Emerging Growth Fund................ N/A N/A 08/31/00
AIM Mid Cap Basic Value Fund.......................... N/A N/A 12/31/01
AIM New Technology Fund............................... N/A N/A 08/31/00
AIM Select Equity Fund................................ -31.62% 8.13% 08/04/97
AIM Small Cap Equity Fund............................. N/A N/A 08/31/00
AIM Value Fund........................................ -21.15% 7.78% 08/04/97
AIM Value II Fund..................................... N/A N/A 08/31/00
AIM Worldwide Spectrum Fund........................... N/A N/A 12/29/00
|
The yields for each of the named Funds are as follows:
30 DAYS ENDED
JUNE 30, 2001
----------------------------
CLASS A CLASS B CLASS C
------- ------- -------
AIM Balanced Fund [ ]% [ ]% [ ]%
AIM Basic Balanced Fund N/A N/A N/A
AIM Global Utilities Fund [ ]% [ ]% [ ]%
|
FINANCIAL STATEMENTS
FS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Balanced Fund
and Board of Trustees of AIM Funds Group:
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 Balanced Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statements of changes in net assets of the Fund for the year ended December 31, 1999 and the financial highlights for each of the periods ended on or before December 31, 1999 were audited by other independent accountants whose report dated February 14, 2000 expressed an unqualified opinion thereon.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-1
SCHEDULE OF INVESTMENTS
December 31, 2000
PRINCIPAL MARKET
AMOUNT VALUE
U.S. DOLLAR DENOMINATED BONDS &
NOTES-31.07%
AIRLINES-0.62%
Airplanes Pass Through
Trust-Series D, Gtd. Sub. Euro
Bonds, 10.88%, 03/15/19 $ 493,850 $ 365,274
---------------------------------------------------------------
America West Airlines,
Inc.-Series C, Pass Through
Ctfs., 6.86%, 07/02/04 2,960,396 2,901,632
---------------------------------------------------------------
American Airlines-Series 87-A,
Equipment Trust Inc. Ctfs.,
9.90%, 01/15/11 2,955,000 3,451,499
---------------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 10.38%, 12/15/22 2,300,000 2,411,067
---------------------------------------------------------------
Unsec. Notes, 7.90%, 12/15/09 9,150,000 8,799,006
---------------------------------------------------------------
Northwest Airlines Inc.-Series
971B, Pass Through Ctfs.,
7.25%, 07/02/14 4,267,877 3,968,080
---------------------------------------------------------------
United Air Lines, Inc.-Series
95A2, Pass Through Ctfs.,
9.56%, 10/19/18 3,750,000 4,130,587
===============================================================
26,027,145
===============================================================
AUTOMOBILES-0.37%
DaimlerChrysler N.A. Holding
Corp., Gtd., Notes, 8.00%,
06/15/10 5,400,000 5,458,914
---------------------------------------------------------------
Unsec. Notes, 7.40%, 01/20/05 5,750,000 5,792,147
---------------------------------------------------------------
Rocs Series CHR-1998-1,
Collateral Trust, 6.50%,
08/01/18 4,680,379 4,361,902
===============================================================
15,612,963
===============================================================
BANKS (MAJOR REGIONAL)-1.88%
BankBoston N.A., Unsec. Sub.
Notes, 7.00%, 09/15/07 8,150,000 8,175,509
---------------------------------------------------------------
BB&T Corp., RAPS Sub. Notes,
6.38%, 06/30/05 11,570,000 11,207,512
---------------------------------------------------------------
Crestar Financial Corp., Sub.
Notes, 8.75%, 11/15/04 3,750,000 4,018,125
---------------------------------------------------------------
Deutsche Bank Luxembourg
(Luxembourg), Yankee Bonds,
6.83%, 12/28/07(a) 8,000,000 7,409,720
---------------------------------------------------------------
HSBC Capital Funding L.P., VRD
Gtd. Bonds, 10.18%, 12/29/49
(Acquired 08/24/00; Cost
$9,602,932)(b) 8,600,000 9,916,755
---------------------------------------------------------------
Midland Bank PLC (United
Kingdom), Unsec. Sub. Yankee
Notes, 7.65%, 05/01/25 2,105,000 2,179,896
---------------------------------------------------------------
NCNB Corp., Sub Notes, 9.38%,
09/15/09 2,700,000 3,081,024
---------------------------------------------------------------
10.20%, 07/15/15 7,050,000 8,447,098
---------------------------------------------------------------
Regions Financial Corp., Putable
Sub. Notes, 7.75%, 09/15/24 6,300,000 6,534,234
---------------------------------------------------------------
Republic New York Corp., Sub.,
Deb., 9.50%, 04/15/14 5,400,000 6,304,878
---------------------------------------------------------------
Notes, 9.70%, 02/01/09 3,800,000 4,333,140
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
BANKS (MAJOR REGIONAL)-(CONTINUED)
Skandinaviska Enskilda Banken
(Sweden), Sub. Yankee Notes,
6.88%, 02/15/09 $ 8,500,000 $ 8,081,630
===============================================================
79,689,521
===============================================================
BANKS (MONEY CENTER)-0.99%
BSCH Issuances Ltd. (Cayman
Islands), Gtd. Sub. Yankee
Bonds, 7.63%, 09/14/10 15,000,000 15,244,200
---------------------------------------------------------------
First Union Corp., Putable
Unsec. Sub. Deb.,
6.55%, 10/15/35 9,680,000 9,461,813
---------------------------------------------------------------
7.50%, 04/15/35 3,300,000 3,344,649
---------------------------------------------------------------
MBNA America Bank N.A., Sr.
Notes, 7.75%, 09/15/05 6,350,000 6,435,153
---------------------------------------------------------------
Santander Financial Issuances
Ltd. (Cayman Islands), Unsec.
Gtd. Sub. Yankee Notes, 7.25%,
11/01/15 5,000,000 4,688,000
---------------------------------------------------------------
Sanwa Finance Aruba AEC (Aruba),
Gtd. Unsec. Sub. Notes, 8.35%,
07/15/09 2,550,000 2,666,724
===============================================================
41,840,539
===============================================================
BANKS (REGIONAL)-1.55%
Bank of Tokyo-Mitsubishi Ltd.
(The) (Japan), Sr. Sub. Yankee
Notes, 8.40%, 04/15/10 1,700,000 1,814,395
---------------------------------------------------------------
Bank United-Series A, Medium
Term Notes, 8.00%, 03/15/09 4,050,000 4,080,658
---------------------------------------------------------------
Banponce Trust I-Series A, Gtd.
Notes, 8.33%, 02/01/27 5,960,000 5,301,837
---------------------------------------------------------------
Mercantile Bancorp. Inc., Jr.
Unsec. Sub. Notes, 7.30%,
06/15/07 10,405,000 10,624,754
---------------------------------------------------------------
NBD Bank N.A. Michigan, Putable
Unsec. Sub. Deb., 8.25%,
11/01/24 16,150,000 17,393,227
---------------------------------------------------------------
Riggs Capital Trust II-Series C,
Gtd. Sec. Bonds, 8.88%,
03/15/27 9,550,000 6,091,658
---------------------------------------------------------------
Union Planters Bank N.A., Unsec.
Sub. Notes, 6.50%, 03/15/08 6,000,000 5,502,120
---------------------------------------------------------------
Union Planters Capital Trust,
Gtd. Bonds, 8.20%, 12/15/26 5,200,000 4,460,716
---------------------------------------------------------------
US Bancorp, Sub. Deb., 7.50%,
06/01/26 10,000,000 10,247,400
===============================================================
65,516,765
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-3.36%
AT&T Corp., Gtd. Bonds, 9.65%,
03/31/27 10,400,000 11,234,184
---------------------------------------------------------------
AT&T Corp.-Liberty Media Corp.,
Sr. Unsec., Bonds, 7.88%,
07/15/09 2,150,000 2,117,922
---------------------------------------------------------------
Deb., 8.25%, 02/01/30 7,750,000 7,106,052
---------------------------------------------------------------
British Sky Broadcasting Group
PLC (United Kingdom), Sr.
Unsec. Gtd. Yankee Notes,
8.20%, 07/15/09 14,370,000 13,635,262
---------------------------------------------------------------
|
FS-2
PRINCIPAL MARKET
AMOUNT VALUE
BROADCASTING (TELEVISION, RADIO &
CABLE)-(CONTINUED)
Clear Channel Communications,
Inc., Unsec. Deb., 7.25%,
10/15/27 $ 11,055,000 $ 9,958,676
---------------------------------------------------------------
Comcast Cable Communications,
Unsec. Unsub. Notes, 8.50%,
05/01/27 10,275,000 11,228,725
---------------------------------------------------------------
Continental Cablevision, Inc.,
Sr. Deb., 9.50%, 08/01/13 14,000,000 15,373,540
---------------------------------------------------------------
Cox Enterprises, Inc., Notes,
8.00%, 02/15/07 (Acquired
02/16/00-03/23/00; Cost
$6,530,542)(b) 6,550,000 6,744,404
---------------------------------------------------------------
CSC Holdings Inc., Sr. Unsec.,
Deb., 7.88%, 02/15/18 7,100,000 6,705,524
---------------------------------------------------------------
Notes, 7.88%, 12/15/07 12,730,000 12,869,139
---------------------------------------------------------------
Series B, Notes, 8.13%,
07/15/09 8,300,000 8,526,756
---------------------------------------------------------------
Lenfest Communications, Inc.,
Sr. Unsec., Notes, 8.38%,
11/01/05 7,400,000 7,936,648
---------------------------------------------------------------
Sub. Notes, 8.25%, 02/15/08
(Acquired 11/17/99-02/25/00;
Cost $2,588,325)(b) 2,550,000 2,657,635
---------------------------------------------------------------
TCA Cable TV, Inc., Sr. Unsec.
Deb., 6.53%, 02/01/28 4,350,000 4,203,883
---------------------------------------------------------------
TCI Communications, Inc.,
Sr. Deb., 8.75%, 08/01/15 2,100,000 2,303,637
---------------------------------------------------------------
Sr. Unsec. Deb., 9.80%,
02/01/12 16,650,000 19,479,334
===============================================================
142,081,321
===============================================================
CHEMICALS-0.31%
Airgas, Inc., Medium Term Notes,
7.14%, 03/08/04 6,700,000 6,163,263
---------------------------------------------------------------
Union Carbide Corp., Deb.,
6.79%, 06/01/25 6,750,000 6,819,862
===============================================================
12,983,125
===============================================================
COMMUNICATIONS EQUIPMENT-1.13%
Comverse Technology, Inc., Conv.
Unsec. Sub. Deb., 4.50%,
07/01/05 7,700,000 39,125,625
---------------------------------------------------------------
Corning Inc., Sr. Conv. Unsec.
Deb., 2.07%, 11/08/15(c) 12,000,000 8,565,000
===============================================================
47,690,625
===============================================================
COMPUTERS (HARDWARE)-0.38%
Candescent Technologies Corp.,
Sr. Conv. Unsec. Gtd. Sub.
Deb., 8.00%, 05/01/03
(Acquired 04/17/98-08/31/00;
Cost $18,727,750)(b)(d) 22,262,000 16,251,260
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-0.59%
VERITAS Software Corp., Conv.
Unsec. Disc. Notes, 1.86%,
08/13/06(e) 10,000,000 24,950,000
===============================================================
CONSUMER FINANCE-1.72%
American General Finance Corp.,
Sr. Putable Notes, 8.45%,
10/15/09 10,900,000 11,859,745
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
CONSUMER FINANCE-(CONTINUED)
Capital One Financial Corp.,
Unsec. Notes, 6.63%, 06/01/15 $ 2,000,000 $ 2,005,860
---------------------------------------------------------------
7.25%, 05/01/06 10,790,000 10,074,515
---------------------------------------------------------------
7.88%, 02/01/25 5,865,000 6,174,379
---------------------------------------------------------------
General Motors Acceptance Corp.,
Notes, 6.85%, 06/17/04 18,160,000 18,328,343
---------------------------------------------------------------
Putable Notes, 9.00%,
10/15/02(e) 4,175,000 4,355,569
---------------------------------------------------------------
Household Finance Corp.,
Sr. Unsec. Notes, 6.88%,
03/01/07 5,450,000 5,370,266
---------------------------------------------------------------
Unsec. Notes, 8.00%, 07/15/10 5,850,000 6,187,077
---------------------------------------------------------------
MBNA Capital-Series A, Gtd.
Bonds, 8.28%, 12/01/26 10,110,000 8,422,338
===============================================================
72,778,092
===============================================================
ELECTRIC COMPANIES-2.65%
Arizona Public Service Co.,
Unsec. Notes, 6.25%, 01/15/05 5,000,000 4,913,200
---------------------------------------------------------------
CILCORP, Inc., Sr. Unsec. Bonds,
9.38%, 10/15/29 9,000,000 9,995,760
---------------------------------------------------------------
Cleveland Electric Illuminating
Co. (The), First Mortgage
Bonds, 6.86%, 10/01/08 6,080,000 6,004,426
---------------------------------------------------------------
Series D, Sr. Sec. Notes,
7.88%, 11/01/17 7,300,000 7,412,055
---------------------------------------------------------------
CMS Energy Corp., Sr. Unsec.
Notes, 8.13%, 05/15/02 4,950,000 4,928,418
---------------------------------------------------------------
El Paso Electric Co.,
Series D, Sec. First Mortgage
Bonds, 8.90%, 02/01/06 7,550,000 8,146,676
---------------------------------------------------------------
Series E, Sec. First Mortgage
Bonds, 9.40%, 05/01/11 5,438,000 5,908,006
---------------------------------------------------------------
Empire District Electric Co.
(The), Sr. Notes, 7.70%,
11/15/04 8,550,000 8,883,877
---------------------------------------------------------------
Indiana Michigan Power Co.-Series F,
Sec. Lease Obligation Bonds,
9.82%, 12/07/22 4,469,652 5,074,172
---------------------------------------------------------------
Niagara Mohawk Power Corp.-Series H,
Sr. Unsec. Disc. Notes, 8.50%,
07/01/10(e) 11,000,000 9,520,280
---------------------------------------------------------------
Public Service Company of New
Mexico-Series A, Sr. Unsec.
Notes, 7.10%, 08/01/05 7,850,000 7,606,022
---------------------------------------------------------------
Southern Energy, Inc., Sr.
Notes, 7.90%, 07/15/09
(Acquired 12/03/99-02/11/00;
Cost $4,101,691)(b) 4,225,000 4,237,548
---------------------------------------------------------------
Texas-New Mexico Power Co., Sr.
Sec. Notes, 6.25%, 01/15/09 5,800,000 5,346,208
---------------------------------------------------------------
Unicom Corp.-Series 94, First
Mortgage Notes, 7.50%,
07/01/13 9,300,000 9,697,017
---------------------------------------------------------------
UtiliCorp United Inc., Sr.
Unsec. Putable Notes, 6.70%,
10/15/06 6,350,000 6,314,694
---------------------------------------------------------------
|
FS-3
PRINCIPAL MARKET
AMOUNT VALUE
ELECTRIC COMPANIES-(CONTINUED)
Western Resources, Inc., Sr.
Unsec. Putable Notes,
6.25%, 08/15/03 $ 1,575,000 $ 1,496,486
---------------------------------------------------------------
7.13%, 08/01/09 7,000,000 6,451,970
===============================================================
111,936,815
===============================================================
ELECTRICAL EQUIPMENT-0.31%
General Electric Capital
Corp.-Series A, Medium Term
Notes, 6.70%, 10/01/02 12,800,000 12,970,240
===============================================================
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.09%
Israel Electric Corp. Ltd.
(Israel), Yankee Deb., 7.75%,
12/15/27(a) 4,350,000 3,870,847
===============================================================
ENTERTAINMENT-0.75%
Time Warner Inc., Sr. Unsec.
Gtd. Deb., 7.57%, 02/01/24 10,715,000 10,715,321
---------------------------------------------------------------
Unsec. Deb., 8.05%, 01/15/16 6,500,000 6,811,090
---------------------------------------------------------------
Unsec. Deb., 9.13%, 01/15/13 5,420,000 6,288,663
---------------------------------------------------------------
Unsec. Deb., 9.15%, 02/01/23 6,850,000 7,959,084
===============================================================
31,774,158
===============================================================
FINANCIAL (DIVERSIFIED)-2.82%
AIG SunAmerica Global Financing I,
Sr. Unsec. Unsub. Notes,
7.40%, 05/05/03 (Acquired
10/17/00; Cost $11,790,356)(b) 11,600,000 11,941,272
---------------------------------------------------------------
AIG SunAmerica Global Financing
II, Sr. Sec. Notes, 7.60%,
06/15/05 (Acquired 06/08/00;
Cost $9,100,000)(b) 9,100,000 9,614,605
---------------------------------------------------------------
Associates Corp. of North America,
Sr. Deb., 6.95%, 11/01/18 3,900,000 3,689,127
---------------------------------------------------------------
Beaver Valley II Funding Corp.,
Sec. Lease Obligations Deb.,
9.00%, 06/01/17 12,500,000 13,731,625
---------------------------------------------------------------
CIT Group, Inc. (The), Sr.
Medium Term Notes, 5.91%,
11/23/05 8,100,000 7,669,242
---------------------------------------------------------------
Citicorp Lease-Class A2, Series
1999-1, Pass Through Ctfs.,
8.04%, 12/15/19 (Acquired
06/01/00-09/19/00; Cost
$15,549,112)(b) 15,600,000 15,881,424
---------------------------------------------------------------
Citigroup Inc.,
Deb., 6.63%, 01/15/28 7,700,000 6,871,018
---------------------------------------------------------------
Unsec. Sub. Notes, 7.25%,
10/01/10 6,955,000 7,202,389
---------------------------------------------------------------
Dow Capital B.V. (Netherlands),
Gtd. Yankee Deb., 9.20%,
06/01/10 10,250,000 11,748,653
---------------------------------------------------------------
Ford Holdings, Inc., Unsec.
Unsub. Gtd. Deb., 9.30%,
03/01/30 6,000,000 6,828,300
---------------------------------------------------------------
Heller Financial, Inc., Sr.
Unsec. Notes, 8.00%, 06/15/05 5,780,000 5,988,774
---------------------------------------------------------------
Hutchison Delta Finance Ltd.-Series
REGS (Cayman Islands), Conv. Gtd.
Unsec. Euro Notes, 7.00%, 11/08/02 2,250,000 2,694,375
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
FINANCIAL (DIVERSIFIED)-(CONTINUED)
Pinnacle Partners, Sr. Notes,
8.83%, 08/15/04 (Acquired
08/02/00; Cost $7,000,000)(b) $ 7,000,000 $ 7,243,810
---------------------------------------------------------------
Source One Mortgage Services
Corp., Deb., 9.00%, 06/01/12 5,700,000 6,555,160
---------------------------------------------------------------
Sun Canada Financial Co., Gtd.
Sub. Notes, 6.63%, 12/15/07
(Acquired 10/14/99; Cost
$1,402,095)(b) 1,500,000 1,495,316
===============================================================
119,155,090
===============================================================
FOODS-0.58%
ConAgra, Inc., Sr. Putable
Notes, 6.70%, 08/01/27 7,500,000 7,459,500
---------------------------------------------------------------
ConAgra, Inc., Sr. Unsec.
Putable Notes, 7.13%, 10/01/26 12,755,000 13,091,349
---------------------------------------------------------------
Grand Metropolitan Investment
Corp, Gtd. Bonds, 7.45%,
04/15/35 4,000,000 4,186,600
===============================================================
24,737,449
===============================================================
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.15%
Procter & Gamble Co. (The),
Putable Deb., 8.00%, 09/01/24 5,650,000 6,456,538
===============================================================
INSURANCE (LIFE/HEALTH)-0.27%
Torchmark Corp., Notes, 7.38%,
08/01/13 3,000,000 2,844,030
---------------------------------------------------------------
7.88%, 05/15/23 9,200,000 8,417,264
===============================================================
11,261,294
===============================================================
INSURANCE (PROPERTY-CASUALTY)-0.39%
GE Global Insurance Holdings
Corp., Unsec. Notes,
7.75%, 06/15/30 7,000,000 7,450,730
---------------------------------------------------------------
Terra Nova Insurance PLC (United
Kingdom), Sr. Unsec. Gtd.
Yankee Notes,
7.00%, 05/15/08 2,350,000 2,278,231
---------------------------------------------------------------
7.20%, 08/15/07 7,000,000 6,876,170
===============================================================
16,605,131
===============================================================
INVESTMENT BANKING/BROKERAGE-1.00%
Bear Stearns Cos., Inc., Notes,
7.80%, 08/15/07 6,450,000 6,645,306
---------------------------------------------------------------
Sr. Unsec. Notes, 7.63%,
12/07/09 4,280,000 4,349,422
---------------------------------------------------------------
Lehman Brothers Holdings Inc.,
Bonds, 7.88%, 08/15/10 4,250,000 4,391,143
---------------------------------------------------------------
Putable Sr. Notes, 8.80%,
03/01/15 9,855,000 10,692,774
---------------------------------------------------------------
Unsec. Notes, 8.50%, 08/01/15 9,460,000 10,033,276
---------------------------------------------------------------
Lehman Brothers Inc., Sr. Sub.
Notes, 7.38%, 01/15/07 3,485,000 3,512,532
---------------------------------------------------------------
|
FS-4
PRINCIPAL MARKET
AMOUNT VALUE
INVESTMENT BANKING/BROKERAGE-(CONTINUED)
Merrill Lynch & Co., Inc.,
Unsec. Notes, 6.88%, 11/15/18 $ 2,650,000 $ 2,484,799
===============================================================
42,109,252
===============================================================
MANUFACTURING (DIVERSIFIED)-0.37%
Honeywell International Inc.,
Unsec. Unsub. Notes, 7.50%,
03/01/10 14,500,000 15,710,170
===============================================================
NATURAL GAS-2.31%
CMS Panhandle Holding Co., Sr.
Notes, 6.13%, 03/15/04 6,600,000 6,447,342
---------------------------------------------------------------
Coastal Corp. (The), Sr. Putable
Unsec. Deb., 6.70%, 02/15/27 9,675,000 9,609,597
---------------------------------------------------------------
Ferrellgas Partners L.P.,-Series
B, Sr. Sec. Gtd. Notes, 9.38%,
06/15/06 4,950,000 4,628,250
---------------------------------------------------------------
Kinder Morgan Energy Partners,
L.P., Sr. Unsec. Notes, 6.30%,
02/01/09 8,400,000 8,060,976
---------------------------------------------------------------
Kinder Morgan, Inc., Unsec.
Deb., 7.35%, 08/01/26 7,800,000 8,080,722
---------------------------------------------------------------
KN Capital Trust I-Series B,
Unsec. Gtd. Bonds, 8.56%,
04/15/27 6,250,000 5,858,563
---------------------------------------------------------------
National Fuel Gas Co.-Series D,
Medium Term Notes, 6.30%,
05/27/08 8,600,000 8,215,322
---------------------------------------------------------------
Northern Border Partners,
L.P.-Series A, Sr. Gtd. Unsec.
Unsub. Notes, 8.88%, 06/15/10 11,700,000 12,727,845
---------------------------------------------------------------
Nova Gas Transmission Ltd.
(Canada), Yankee Deb., 8.50%,
12/15/12 5,015,000 5,615,797
---------------------------------------------------------------
Panhandle Eastern Pipe Line,
Notes, 7.88%, 08/15/04 1,500,000 1,536,930
---------------------------------------------------------------
Sonat Inc., Sr. Unsec. Notes,
7.63%, 07/15/11 5,515,000 5,773,378
---------------------------------------------------------------
Tennessee Gas Pipeline Co.,
Unsec. Deb., 7.50%, 04/01/17 12,800,000 12,664,704
---------------------------------------------------------------
Williams Cos., Inc. (The),
Notes, 7.63%, 07/15/19 8,650,000 8,666,262
===============================================================
97,885,688
===============================================================
OIL & GAS (DRILLING & EQUIPMENT)-0.30%
NRG Energy, Inc., Sr. Unsec.
Notes, 7.50%, 06/01/09 5,000,000 4,977,750
---------------------------------------------------------------
Petroleum Geo-Services A.S.A.
(Norway), Sr. Unsec. Yankee
Notes, 7.13%, 03/30/28 2,200,000 1,778,612
---------------------------------------------------------------
Yankee Notes, 7.50%, 03/31/07 5,960,000 5,980,920
===============================================================
12,737,282
===============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-0.70%
Anadarko Petroleum Corp., Unsec.
Deb., 7.73%, 09/15/96 8,250,000 8,616,300
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
OIL & GAS (EXPLORATION &
PRODUCTION)-(CONTINUED)
Louis Dreyfus Natural Gas Corp.,
Unsec. Notes, 6.88%, 12/01/07 $ 8,300,000 $ 8,214,261
---------------------------------------------------------------
ONEOK, Inc., Unsec. Notes,
7.75%, 08/15/06 3,100,000 3,225,209
---------------------------------------------------------------
Talisman Energy Inc. (Canada),
Unsec. Unsub. Yankee Deb.,
7.13%, 06/01/07 1,500,000 1,514,580
---------------------------------------------------------------
Union Pacific Resources Group
Inc., Unsec. Deb., 7.50%,
10/15/26 8,100,000 8,255,844
===============================================================
29,826,194
===============================================================
OIL & GAS (REFINING & MARKETING)-0.21%
Petroleos Mexicanos (Mexico)-
Series P, Putable Unsec. Unsub.
Yankee Notes, 9.50%, 09/15/27 8,500,000 8,953,730
===============================================================
OIL (DOMESTIC INTEGRATED)-0.40%
Amerada Hess Corp., Bonds,
7.88%, 10/01/29 9,255,000 10,160,324
---------------------------------------------------------------
Occidental Petroleum Corp., Sr.
Unsec. Notes, 8.45%, 02/15/29 6,150,000 6,795,873
===============================================================
16,956,197
===============================================================
OIL (INTERNATIONAL INTEGRATED)-0.27%
YPF Sociedad Anonima (Argentina),
Yankee, Bonds, 9.13%, 02/24/09 4,550,000 4,668,528
---------------------------------------------------------------
Notes, 8.00%, 02/15/04 6,900,000 6,842,868
===============================================================
11,511,396
===============================================================
POWER PRODUCERS (INDEPENDENT)-0.36%
AES Corp. (The), Sr. Unsec. Sub.
Notes, 8.38%, 08/15/07 3,000,000 2,895,000
---------------------------------------------------------------
10.25%, 07/15/06 1,800,000 1,867,500
---------------------------------------------------------------
CE Generation LLC, Sr. Sec. Sub.
Deb., 7.42%, 12/15/18 7,597,200 7,307,367
---------------------------------------------------------------
Kincaid Generation LLC, Sec.
Bonds, 7.33%, 06/15/20
(Acquired 04/30/98; Cost
$3,425,614)(b) 3,417,174 3,308,815
===============================================================
15,378,682
===============================================================
PUBLISHING (NEWSPAPERS)-0.41%
News America Holdings, Inc.,
Putable Notes, 8.45%, 08/01/34 3,325,000 3,452,846
---------------------------------------------------------------
Sr. Gtd. Deb., 9.25%, 02/01/13 8,250,000 8,830,470
---------------------------------------------------------------
Sr. Unsec. Gtd. Putable Bonds,
7.43%, 10/01/26 4,950,000 4,852,683
===============================================================
17,135,999
===============================================================
RAILROADS-0.24%
Norfolk Southern Corp., Notes,
7.05%, 05/01/37 10,000,000 10,170,000
===============================================================
|
FS-5
PRINCIPAL MARKET
AMOUNT VALUE
REAL ESTATE INVESTMENT TRUSTS-0.19%
ERP Operating L.P., Unsec.
Notes, 7.13%, 10/15/17 $ 3,250,000 $ 2,881,970
---------------------------------------------------------------
Health Care REIT, Inc., Sr.
Unsec. Notes, 7.63%, 03/15/08 1,150,000 997,246
---------------------------------------------------------------
Spieker Properties, Inc., Unsec.
Unsub. Deb., 7.35%, 12/01/17 4,600,000 4,288,672
===============================================================
8,167,888
===============================================================
SAVINGS & LOAN COMPANIES-0.67%
Dime Capital Trust I-Series A,
Gtd. Bonds, 9.33%, 05/06/27 9,700,000 8,358,393
---------------------------------------------------------------
St. Paul Bancorp, Inc., Sr.
Unsec. Unsub. Notes, 7.13%,
02/15/04 5,500,000 5,473,325
---------------------------------------------------------------
Sovereign Bancorp, Inc., Medium
Term Sub. Notes, 8.00%,
03/15/03 5,330,000 5,141,851
---------------------------------------------------------------
Washington Mutual Capital I,
Sec. Gtd. Sub. Bonds, 8.38%,
06/01/27 4,285,000 3,964,911
---------------------------------------------------------------
Washington Mutual, Inc., Jr.
Unsec. Sub. Notes, 8.25%,
04/01/10 5,000,000 5,271,400
===============================================================
28,209,880
===============================================================
SOVEREIGN DEBT-0.91%
British Columbia (Province of)
(Canada), Unsec. Unsub. Yankee
Notes, 5.38%, 10/29/08 2,750,000 2,635,325
---------------------------------------------------------------
Hydro-Quebec-Series B (Canada),
Gtd. Medium Term Yankee Notes,
8.62%, 12/15/11 5,000,000 5,867,400
---------------------------------------------------------------
Manitoba (Province of)-Series AZ
(Canada), Putable Yankee Deb.,
7.75%, 07/17/16 9,850,000 10,954,875
---------------------------------------------------------------
Newfoundland (Province of)
(Canada), Yankee Deb., 9.00%,
06/01/19 3,960,000 4,674,503
---------------------------------------------------------------
Quebec (Province of) (Canada),
Unsec. Yankee Deb., 6.50%,
01/17/06 4,900,000 5,023,382
---------------------------------------------------------------
Series A, Medium Term Putable Yankee
Notes, 7.37%, 03/06/26(e) 9,300,000 9,423,876
===============================================================
38,579,361
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-0.20%
Vodafone AirTouch PLC (United
Kingdom), Unsec. Unsub. Yankee
Notes, 7.75%, 02/15/10(a) 8,350,000 8,633,065
===============================================================
TELECOMMUNICATIONS (LONG DISTANCE)-0.33%
MCI Communications Corp., Sr.
Unsec. Putable Deb., 7.13%,
06/15/27 2,150,000 2,176,875
---------------------------------------------------------------
Sprint Corp., Putable Deb.,
9.00%, 10/15/19 2,200,000 2,309,296
---------------------------------------------------------------
WorldCom, Inc., Notes, 8.00%,
05/15/06 9,215,000 9,393,495
===============================================================
13,879,666
===============================================================
|
PRINCIPAL MARKET
AMOUNT VALUE
TELEPHONE-0.98%
AT&T Canada Inc. (Canada), Sr.
Unsec., Sub. Yankee Notes,
7.63%, 03/15/05 $ 10,100,000 $ 10,076,669
---------------------------------------------------------------
Yankee Notes 7.65%, 09/15/06 5,200,000 5,169,996
---------------------------------------------------------------
BellSouth Capital Funding,
Putable Deb., 6.04%, 11/15/26 4,000,000 3,982,240
---------------------------------------------------------------
Deutsche Telekom International
Finance B.V. (Netherlands),
Unsec. Unsub. Yankee Bonds,
8.00%, 06/15/10 5,930,000 6,053,937
---------------------------------------------------------------
GTE Corp., Unsec. Deb., 6.84%,
04/15/18 5,500,000 5,112,635
---------------------------------------------------------------
Koninklijke (Royal) KPN N.V.
(Netherlands), Sr. Unsec.
Unsub. Yankee Notes, 7.50%,
10/01/05(a) 2,850,000 2,765,042
---------------------------------------------------------------
Qwest Capital Funding Inc.,
Unsec. Gtd. Notes, 7.90%,
08/15/10 (Acquired 08/24/00;
Cost $7,925,438)(b) 7,900,000 8,180,766
===============================================================
41,341,285
===============================================================
WASTE MANAGEMENT-0.31%
Browning-Ferris Industries,
Inc., Unsec. Deb., 7.40%,
09/15/35 4,170,000 3,023,250
---------------------------------------------------------------
Waste Management, Inc.,
Putable Unsec. Notes, 7.10%,
08/01/26 9,900,000 9,813,672
---------------------------------------------------------------
Sr. Unsec. Notes, 7.13%,
12/15/17 520,000 464,974
===============================================================
13,301,896
===============================================================
Total U.S. Dollar
Denominated Bonds & Notes
(Cost $1,261,331,197) 1,314,676,549
===============================================================
SHARES
COMMON STOCKS & OTHER EQUITY
INTERESTS-48.91%
AEROSPACE/DEFENSE-1.18%
General Dynamics Corp. 385,000 30,030,000
---------------------------------------------------------------
Northrop Grumman Corp. 238,000 19,754,000
===============================================================
49,784,000
===============================================================
BANKS (MAJOR REGIONAL)-0.40%
Bank of New York Co., Inc. (The) 307,000 16,942,562
===============================================================
BANKS (MONEY CENTER)-0.80%
J.P. Morgan Chase & Co. 743,500 33,782,781
===============================================================
BIOTECHNOLOGY-0.75%
Genzyme Corp.(f) 355,100 31,936,806
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-2.43%
Clear Channel Communications, Inc.(f) 333,000 16,129,687
---------------------------------------------------------------
Entravision Communications
Corp.-Class A(f) 423,400 7,779,975
---------------------------------------------------------------
General Motors Corp.-Class H(f) 567,000 13,041,000
---------------------------------------------------------------
Hispanic Broadcasting Corp.(f) 565,000 14,407,500
---------------------------------------------------------------
Infinity Broadcasting Corp.
-Class A(f) 526,250 14,702,109
---------------------------------------------------------------
|
FS-6
MARKET
SHARES VALUE
BROADCASTING (TELEVISION, RADIO & CABLE)-(CONTINUED)
Univision Communications
Inc.-Class A(f) $ 895,000 $ 36,639,062
===============================================================
102,699,333
===============================================================
COMMUNICATIONS EQUIPMENT-1.44%
Corning Inc. 243,900 12,880,969
---------------------------------------------------------------
JDS Uniphase Corp.(f) 131,000 5,461,062
---------------------------------------------------------------
Nokia Oyj-ADR (Finland) 400,000 17,400,000
---------------------------------------------------------------
Nortel Networks Corp. (Canada) 499,100 16,002,394
---------------------------------------------------------------
Redback Networks Inc.(f) 221,000 9,061,000
===============================================================
60,805,425
===============================================================
COMPUTERS (HARDWARE)-0.81%
Sun Microsystems, Inc.(f) 898,000 25,031,750
---------------------------------------------------------------
Sycamore Networks, Inc.(f) 250,000 9,312,500
===============================================================
34,344,250
===============================================================
COMPUTERS (NETWORKING)-1.58%
Cisco Systems, Inc.(f) 963,000 36,834,750
---------------------------------------------------------------
Juniper Networks, Inc.(f) 165,000 20,800,312
---------------------------------------------------------------
VeriSign, Inc.(f) 122,500 9,087,969
===============================================================
66,723,031
===============================================================
COMPUTERS (PERIPHERALS)-1.41%
Brocade Communications Systems,
Inc.(f) 201,400 18,491,037
---------------------------------------------------------------
EMC Corp.(f) 618,000 41,097,000
===============================================================
59,588,037
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-3.23%
America Online, Inc.(f) 499,200 17,372,160
---------------------------------------------------------------
Ariba, Inc.(f) 253,000 13,598,750
---------------------------------------------------------------
BEA Systems, Inc.(f) 306,500 20,631,281
---------------------------------------------------------------
Check Point Software
Technologies Ltd. (Israel)(f) 187,000 24,976,188
---------------------------------------------------------------
Internet Security Systems, Inc.(f) 251,000 19,687,813
---------------------------------------------------------------
i2 Technologies, Inc.(f) 246,000 13,376,250
---------------------------------------------------------------
Oracle Corp.(f) 750,000 21,796,875
---------------------------------------------------------------
VERITAS Software Corp.(f) 59,100 5,171,250
===============================================================
136,610,567
===============================================================
ELECTRIC COMPANIES-0.32%
Southern Co. (The) 405,900 13,496,175
===============================================================
ELECTRICAL EQUIPMENT-0.74%
General Electric Co. 650,000 31,159,375
===============================================================
ELECTRONICS (DEFENSE)-0.53%
Raytheon Co.-Class B 725,000 22,520,313
===============================================================
ELECTRONICS (SEMICONDUCTORS)-2.14%
Analog Devices, Inc.(f) 496,300 25,404,356
---------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
Intel Corp. $ 575,000 $ 17,393,750
---------------------------------------------------------------
Microchip Technology Inc.(f) 306,000 6,712,875
---------------------------------------------------------------
SDL, Inc.(f) 140,400 20,805,525
---------------------------------------------------------------
Vitesse Semiconductor Corp.(f) 363,300 20,095,031
===============================================================
90,411,537
===============================================================
ENGINEERING & CONSTRUCTION-0.45%
Quanta Services, Inc.(f) 588,000 18,926,250
===============================================================
ENTERTAINMENT-0.64%
Time Warner Inc. 165,000 8,619,600
---------------------------------------------------------------
Viacom Inc.-Class B(f) 392,119 18,331,563
===============================================================
26,951,163
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.24%
Applied Materials, Inc.(f) 270,000 10,310,625
===============================================================
FINANCIAL (DIVERSIFIED)-2.55%
American Express Co. 413,000 22,689,188
---------------------------------------------------------------
Citigroup Inc. 816,433 41,689,110
---------------------------------------------------------------
Fannie Mae 134,000 11,624,500
---------------------------------------------------------------
Freddie Mac 180,000 12,397,500
---------------------------------------------------------------
MGIC Investment Corp. 292,000 19,691,750
===============================================================
108,092,048
===============================================================
HEALTH CARE (DIVERSIFIED)-1.11%
Abbott Laboratories 444,000 21,506,250
---------------------------------------------------------------
American Home Products Corp. 400,000 25,420,000
===============================================================
46,926,250
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.25%
Medicis Pharmaceutical
Corp.-Class A(f) 177,000 10,465,125
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-2.16%
Allergan, Inc. 200,000 19,362,529
---------------------------------------------------------------
Merck & Co., Inc. 312,000 29,211,000
---------------------------------------------------------------
Pfizer Inc. 541,200 24,895,200
---------------------------------------------------------------
Pharmacia Corp. 296,000 18,056,000
===============================================================
91,524,729
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.33%
Baxter International, Inc. 302,400 26,705,700
---------------------------------------------------------------
Medtronic, Inc. 490,000 29,583,750
===============================================================
56,289,450
===============================================================
INSURANCE (MULTI-LINE)-0.89%
American International Group, Inc. 382,500 37,700,156
===============================================================
|
FS-7
MARKET
SHARES VALUE
INSURANCE BROKERS-0.78%
Marsh & McLennan Cos., Inc. $ 281,000 $ 32,877,000
===============================================================
INVESTMENT BANKING/BROKERAGE-2.63%
Goldman Sachs Group, Inc. (The) 299,000 31,974,313
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 392,000 26,729,500
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 391,000 30,986,750
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 764,750 21,699,781
===============================================================
111,390,344
===============================================================
INVESTMENT MANAGEMENT-0.46%
Stilwell Financial, Inc. 493,000 19,442,688
===============================================================
MANUFACTURING (DIVERSIFIED)-0.37%
Tyco International Ltd. (Bermuda) 284,000 15,762,000
===============================================================
NATURAL GAS-2.12%
Dynegy Inc.-Class A 535,000 29,993,438
---------------------------------------------------------------
Enron Corp. 356,000 29,592,500
---------------------------------------------------------------
Williams Cos., Inc. (The) 757,000 30,232,688
===============================================================
89,818,626
===============================================================
OIL & GAS (EXPLORATION & PRODUCTION)-1.32%
Apache Corp. 468,900 32,852,306
---------------------------------------------------------------
Kerr-McGee Corp. 344,900 23,086,744
===============================================================
55,939,050
===============================================================
OIL (INTERNATIONAL INTEGRATED)-1.19%
Exxon Mobil Corp. 257,700 22,403,794
---------------------------------------------------------------
TotalFinaElf S.A. (France) 187,000 27,815,412
===============================================================
50,219,206
===============================================================
POWER PRODUCERS (INDEPENDENT)-0.56%
AES Corp. (The)(f) 430,000 23,811,250
===============================================================
RETAIL (BUILDING SUPPLIES)-0.32%
Home Depot, Inc. (The) 295,500 13,500,656
===============================================================
RETAIL (FOOD CHAINS)-0.80%
Safeway Inc.(f) 541,000 33,812,500
===============================================================
RETAIL (GENERAL MERCHANDISE)-0.75%
Target Corp. 983,200 31,708,200
===============================================================
RETAIL (SPECIALTY)-0.70%
Bed Bath & Beyond Inc.(f) 949,000 21,233,875
---------------------------------------------------------------
Linens 'n Things, Inc.(f) 305,200 8,431,150
===============================================================
29,665,025
===============================================================
SERVICES (ADVERTISING/MARKETING)-1.31%
Lamar Advertising Co.(f) 500,000 19,296,875
---------------------------------------------------------------
|
MARKET
SHARES VALUE
SERVICES (ADVERTISING/MARKETING)-(CONTINUED)
Omnicom Group Inc. $ 437,000 $ 36,216,375
===============================================================
55,513,250
===============================================================
SERVICES (COMPUTER SYSTEMS)-0.17%
Critical Path, Inc.(f) 241,100 7,413,825
===============================================================
SERVICES (DATA PROCESSING)-0.33%
DST Systems, Inc.(f) 212,000 14,204,000
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.82%
Amdocs Ltd. (United Kingdom)(f) 451,000 29,878,750
---------------------------------------------------------------
Level 3 Communications, Inc.(f) 269,140 8,831,156
---------------------------------------------------------------
NTT DoCoMo, Inc. (Japan) 844 14,541,543
---------------------------------------------------------------
Openwave Systems Inc.(f) 290,000 13,901,875
---------------------------------------------------------------
Western Wireless Corp.-Class A(f) 247,300 9,691,069
===============================================================
76,844,393
===============================================================
TELECOMMUNICATIONS (LONG DISTANCE)-0.13%
Global Crossings Ltd. (Bermuda)(f) 393,852 5,637,007
===============================================================
TELEPHONE-5.77%
BellSouth Corp. 500,000 20,468,750
---------------------------------------------------------------
Broadwing Inc.(f) 609,520 13,904,675
---------------------------------------------------------------
Korea Telecom Corp.-ADR (South
Korea) 189,796 5,883,676
---------------------------------------------------------------
McLeodUSA, Inc.-Class A(f) 1,371,000 19,365,375
---------------------------------------------------------------
Qwest Communications
International Inc.(f) 665,000 27,265,000
---------------------------------------------------------------
SBC Communications Inc. 744,000 35,526,000
---------------------------------------------------------------
Telecom Italia S.p.A. (Italy) 2,642,300 15,880,012
---------------------------------------------------------------
Telefonica S.A. (Spain)(f) 1,296,993 21,435,766
---------------------------------------------------------------
Time Warner Telecom Inc.-Class A(f) 358,200 22,723,313
---------------------------------------------------------------
Verizon Communications Inc. 800,000 40,100,000
---------------------------------------------------------------
Vodafone Group PLC (United
Kingdom) 5,907,285 21,685,415
===============================================================
244,237,982
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$1,681,688,527) 2,069,786,990
===============================================================
PREFERRED STOCKS-1.36%
OIL & GAS (EXPLORATION & PRODUCTION)-0.58%
Kerr-McGee Corp.-$1.83 Pfd. DECS 445,000 24,530,625
===============================================================
POWER PRODUCERS (INDEPENDENT)-0.78%
AES Trust III-$3.38 Conv. Pfd. 108,600 9,339,600
---------------------------------------------------------------
Calpine Capital Trust III-$2.50
Conv. Pfd. (Acquired 08/03/00;
Cost $19,775,000)(b) 395,500 23,878,312
===============================================================
33,217,912
===============================================================
Total Preferred Stocks (Cost
$44,423,431) 57,748,537
===============================================================
|
FS-8
PRINCIPAL MARKET
AMOUNT(g) VALUE
NON-U.S. DOLLAR DENOMINATED
BONDS & NOTES-0.86%
CANADA-0.37%
AT&T Canada Inc. (Telephone),
Sr. Unsec. Unsub. Notes,
7.15%, 09/23/04 CAD 1,200,000 $ 790,091
---------------------------------------------------------------
Bell Mobility Cellular Inc.
(Telecommunications-(Cellular/
Wireless), Unsec. Deb., 6.55%,
06/02/08 CAD 2,500,000 1,637,441
---------------------------------------------------------------
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Unsec. Disc. Notes,
10.75%, 02/15/09(e) CAD 5,000,000 2,674,822
---------------------------------------------------------------
Export Development Corp.
(Sovereign Debt), Sr. Unsec.
Unsub. Bonds, 6.50%,
12/21/04 NZD 6,000,000 2,615,000
---------------------------------------------------------------
Poco Petroleums Ltd. (Oil & Gas-
Exploration & Production),
Medium Term Notes, 6.60%,
09/11/07 CAD 4,800,000 3,208,106
---------------------------------------------------------------
Province of Ontario (Sovereign
Debt), Unsec. Unsub. Notes,
6.25%, 12/03/08 NZD 2,500,000 1,071,181
---------------------------------------------------------------
Teleglobe Canada Inc.
(Telephone), Unsec. Deb.,
8.35%, 06/20/03 CAD 1,000,000 689,207
---------------------------------------------------------------
TransCanada PipeLines Ltd.
(Natural Gas)-Series Q, Deb.,
10.63%, 10/20/09 CAD 1,100,000 932,217
---------------------------------------------------------------
Westcoast Energy Inc. (Natural
Gas)- Series V, Unsec. Deb.,
6.45%, 12/18/06(a) CAD 3,000,000 2,028,465
===============================================================
15,646,530
===============================================================
CAYMAN ISLANDS-0.11%
Sutton Bridge Financing Ltd.
(Electric Companies), Gtd.
Notes, 8.63%, 06/30/22(a) GBP 3,000,000 4,811,612
===============================================================
NETHERLANDS-0.10%
Mannesmann Finance B.V.
(Machinery- Diversified), Gtd.
Unsec. Unsub. Euro Notes,
4.75%, 05/27/09 EUR 1,300,000 1,109,540
---------------------------------------------------------------
Tecnost International Finance
N.V. (Telephone)-Series E,
Gtd. Medium Term Euro Notes,
6.13%, 07/30/09 EUR 3,210,000 2,878,729
===============================================================
3,988,269
===============================================================
|
PRINCIPAL MARKET
AMOUNT(g) VALUE
NEW ZEALAND-0.07%
International Bank for Reconstruction &
Development-Class E (Banks-Money Center),
Unsec. Medium Term Notes,
5.50%, 04/15/04 NZD 7,050,000 $ 3,004,735
===============================================================
UNITED KINGDOM-0.07%
British Sky Broadcasting Group
PLC (Broadcasting-Television,
Radio & Cable), Sr. Gtd.
Unsec. Unsub. Bonds, 7.75%,
07/09/09 GBP 2,100,000 2,947,251
===============================================================
UNITED STATES OF AMERICA-0.14%
John Hancock Global Funding Ltd.
(Insurance-Life/Health)-Series
99-H, Sr. Sec. Sub. Medium
Term Notes, 6.75%, 02/15/06 AUD 10,700,000 6,056,669
===============================================================
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $38,990,649) 36,455,066
===============================================================
U.S. TREASURY SECURITIES-9.20%
U.S. TREASURY BONDS-0.16%
6.13%, 11/15/27 $ 6,400,000 6,890,113
===============================================================
U.S. TREASURY NOTES-9.04%
6.63%, 05/31/02 26,700,000 27,162,978
---------------------------------------------------------------
7.25%, 08/15/04 33,800,000 36,152,142
---------------------------------------------------------------
5.88%, 11/15/04(h) 13,000,000 13,343,070
---------------------------------------------------------------
6.75%, 05/15/05 45,730,000 48,713,882
---------------------------------------------------------------
6.50%, 08/15/05 to 10/15/06(h) 121,000,000 128,559,740
---------------------------------------------------------------
6.50%, 02/15/10 25,700,000 28,130,449
---------------------------------------------------------------
9.38%, 02/15/06(h) 20,000,000 23,800,400
---------------------------------------------------------------
6.88%, 05/15/06 34,500,000 37,326,930
---------------------------------------------------------------
5.75%, 08/15/10(h) 37,500,000 39,310,500
===============================================================
382,500,091
===============================================================
Total U.S. Treasury
Securities (Cost
$373,413,528) 389,390,204
===============================================================
|
FS-9
PRINCIPAL MARKET
AMOUNT VALUE
U.S. GOVERNMENT AGENCY SECURITIES-1.58%
FEDERAL HOME LOAN MORTGAGE CORP.
("FHLMC")-0.86%
Pass through Ctfs.-TBA, 7.50%,
01/01/31(i) $ 36,000,000 $ 36,495,000
===============================================================
FEDERAL NATIONAL MORTGAGE
ASSOCIATION ("FNMA")-0.72%
Pass through Ctfs.-TBA, 7.50%,
01/01/31(i) 30,000,000 30,403,125
===============================================================
Total U.S. Government Agency
Securities (Cost
$66,617,812) 66,898,125
===============================================================
|
MARKET
SHARES VALUE
MONEY MARKET FUNDS-7.89%
STIC Liquid Assets Portfolio(j) 166,938,462 $ 166,938,462
---------------------------------------------------------------
STIC Prime Portfolio(j) 166,938,462 166,938,462
===============================================================
Total Money Market Funds
(Cost $333,876,924) 333,876,924
===============================================================
TOTAL INVESTMENTS-100.87% (Cost
$3,800,342,068) 4,268,832,395
===============================================================
LIABILITIES LESS OTHER
ASSETS-(0.87%) (36,858,531)
===============================================================
NET ASSETS-100.00% $4,231,973,864
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt AUD - Australian Dollar CAD - Canadian Dollars Conv. - Convertible Ctfs. - Certificates Deb. - Debentures DECS - Dividend Enhanced Convertible Stock Disc. - Discounted EUR - Euro GBP - British Pound Sterling Gtd. - Guaranteed NZD - New Zealand Dollar REGS - Regulation S Pfd. - Preferred RAPS - Redeemable and Putable Security REIT - Real Estate Investment Trust Sec. - Secured Sr. - Senior Sub. - Subordinated TBA - To Be Announced Unsec. - Unsecured Unsub. - Unsubordinated VRD - Variable Rate Demand |
Notes to Schedule of Investments:
(a) Represents a security sold under Rule 144A, which is exempt from
registration and may be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1993, as amended.
(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
12/31/00 was $97,473,610, which represents 2.30% of the Fund's net assets.
(c) Zero coupon bond issued at a discount. The interest rate shown represents
the yield to maturity at issue.
(d) Security fair valued in accordance with the procedures established by the
Board of Trustees.
(e) Discounted bond at issue. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(f) Non-income producing security.
(g) Foreign denominated security. Par value is denominated in currency
indicated.
(h) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 9.
(i) Security purchased on forward commitment basis. These securities are
subject to dollar roll transactions. See Note 1 Section B.
(j) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-10
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost
$3,800,342,068)* $4,268,832,395
-------------------------------------------------------------
Foreign currencies, at value (cost $153,007) 161,330
-------------------------------------------------------------
Receivables for:
Investments sold 9,166,272
-------------------------------------------------------------
Fund shares sold 21,663,409
-------------------------------------------------------------
Dividends and interest 36,143,797
-------------------------------------------------------------
Investment for deferred compensation plan 59,463
-------------------------------------------------------------
Collateral for securities loaned 360,562,435
-------------------------------------------------------------
Other assets 160,149
=============================================================
Total assets 4,696,749,250
=============================================================
LIABILITIES:
Payables for:
Investments purchased 66,824,062
-------------------------------------------------------------
Fund shares reacquired 24,098,909
-------------------------------------------------------------
Foreign currency contracts outstanding 217,630
-------------------------------------------------------------
Deferred compensation plan 59,463
-------------------------------------------------------------
Collateral upon return of securities loaned 360,562,435
-------------------------------------------------------------
Variation margin 5,721,300
-------------------------------------------------------------
Accrued advisory fees 1,790,313
-------------------------------------------------------------
Accrued administrative services fees 19,732
-------------------------------------------------------------
Accrued distribution fees 3,661,859
-------------------------------------------------------------
Accrued trustees' fees 510
-------------------------------------------------------------
Accrued transfer agent fees 655,684
-------------------------------------------------------------
Accrued operating expenses 1,163,489
=============================================================
Total liabilities 464,775,386
_____________________________________________________________
=============================================================
Net assets applicable to shares outstanding $4,231,973,864
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $2,507,641,121
_____________________________________________________________
=============================================================
Class B $1,358,823,117
_____________________________________________________________
=============================================================
Class C $ 365,509,626
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 83,321,309
_____________________________________________________________
=============================================================
Class B 45,275,689
_____________________________________________________________
=============================================================
Class C 12,164,233
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 30.10
-------------------------------------------------------------
Offering price per share:
(Net asset value of $30.10 divided by
95.25)% $ 31.60
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 30.01
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 30.05
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended December 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$72,584) $ 10,689,712
------------------------------------------------------------
Dividends from affiliated money market funds 15,690,645
------------------------------------------------------------
Interest 115,613,578
------------------------------------------------------------
Security lending 340,426
============================================================
Total investment income 142,334,361
============================================================
EXPENSES:
Advisory fees 19,294,478
------------------------------------------------------------
Administrative services fees 219,636
------------------------------------------------------------
Custodian fees 343,545
------------------------------------------------------------
Distribution fees -- Class A 5,444,457
------------------------------------------------------------
Distribution fees -- Class B 13,096,097
------------------------------------------------------------
Distribution fees -- Class C 2,965,032
------------------------------------------------------------
Transfer agent fees -- Class A 3,182,744
------------------------------------------------------------
Transfer agent fees -- Class B 2,211,768
------------------------------------------------------------
Transfer agent fees -- Class C 500,757
------------------------------------------------------------
Trustees' fees 17,643
------------------------------------------------------------
Other 1,450,711
============================================================
Total expenses 48,726,868
============================================================
Less: Expenses paid indirectly (89,514)
------------------------------------------------------------
Net expenses 48,637,354
============================================================
Net investment income 93,697,007
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FOREIGN CURRENCY CONTRACTS, FUTURES
CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 54,210,438
------------------------------------------------------------
Foreign currencies (1,875,882)
------------------------------------------------------------
Foreign currency contracts 3,219,193
------------------------------------------------------------
Futures contracts (50,478,496)
------------------------------------------------------------
Option contracts written 2,961,757
============================================================
8,037,010
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (300,175,547)
------------------------------------------------------------
Foreign currencies 25,677
------------------------------------------------------------
Foreign currency contracts (873,273)
------------------------------------------------------------
Futures contracts (14,096,431)
------------------------------------------------------------
Option contracts written (326,547)
============================================================
(315,446,121)
============================================================
Net gain (loss) from investment securities,
foreign currencies, foreign currency
contracts, futures contracts and option
contracts (307,409,111)
============================================================
Net increase (decrease) in net assets
resulting from operations $(213,712,104)
____________________________________________________________
============================================================
|
* At December 31, 2000, securities with an aggregate market value of $344,033,650 were on loan to brokers.
See Notes to Financial Statements.
FS-11
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income $ 93,697,007 $ 65,090,620
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, foreign currency contracts, futures
contracts and option contracts 8,037,010 46,845,306
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies, foreign
currency contracts, futures contracts and option
contracts (315,446,121) 374,938,596
==============================================================================================
Net increase (decrease) in net assets resulting from
operations (213,712,104) 486,874,522
==============================================================================================
Distributions to shareholders from net investment income:
Class A (54,663,293) (42,749,278)
----------------------------------------------------------------------------------------------
Class B (22,292,342) (20,909,084)
----------------------------------------------------------------------------------------------
Class C (5,320,796) (3,188,689)
----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (39,511,188) --
----------------------------------------------------------------------------------------------
Class B (21,396,291) --
----------------------------------------------------------------------------------------------
Class C (5,732,223) --
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 922,806,014 243,729,476
----------------------------------------------------------------------------------------------
Class B 291,069,331 132,034,584
----------------------------------------------------------------------------------------------
Class C 196,576,584 61,800,642
==============================================================================================
Net increase in net assets 1,047,823,692 857,592,173
==============================================================================================
NET ASSETS:
Beginning of year 3,184,150,172 2,326,557,999
==============================================================================================
End of year $4,231,973,864 $3,184,150,172
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,809,280,125 $2,395,161,389
----------------------------------------------------------------------------------------------
Undistributed net investment income 1,041,061 404,927
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, foreign currency
contracts, futures contracts and option contracts (36,532,402) 14,952,655
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts, futures
contracts and option contracts 458,185,080 773,631,201
==============================================================================================
$4,231,973,864 $3,184,150,172
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-12
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Balanced Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve as high a total return as possible, consistent with preservation
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.
The Fund may engage in dollar roll transactions with respect to mortgage backed securities issued by GNMA, FNMA and FHLMC. In a dollar roll transaction, the Fund sells a mortgage backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to repurchase a substantially similar security (same type, coupon and maturity) from the institution at a later date at an agreed upon price. The mortgage backed securities that are repurchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with varying prepayment histories. During the period between the sale and repurchase, the Fund will not be entitled to receive interest and principal payments on securities sold. Proceeds of the sale will be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold.
Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to repurchase under the agreement. In the event the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund's use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities.
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.
FS-13
On December 31, 2000, undistributed net investment income was decreased by $10,784,442, undistributed net realized gains increased by $7,117,635 and paid in capital increased $3,666,807 as a result of differing book/tax treatment of foreign currency transactions and utilization of a portion of the proceeds from redemptions as distributions for federal income tax purposes. Net assets of the Fund were unaffected by the reclassification discussed above.
C. Distributions -- Distributions from income are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
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. Outstanding foreign currency contracts at December 31, 2000 were as follows:
UNREALIZED
SETTLEMENT CONTRACT TO APPRECIATION
DATE CURRENCY DELIVER RECEIVE VALUE (DEPRECIATION)
---------- -------- ---------- ----------- ----------- --------------
03/09/01 AUD 10,500,000 $ 5,723,025 $ 5,844,405 $(121,380)
-------------------------------------------------------------------------------
03/30/01 NZD 14,600,000 6,361,220 6,457,470 (96,250)
===============================================================================
$12,084,245 $12,301,875 $(217,630)
______________________________________________________________________________
===============================================================================
|
G. 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.
H. 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.
FS-14
I. 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.
J. Bond Premiums -- It has been the policy of the Fund not to amortize market premiums on bonds for financial reporting purposes. In November 2000, a revised AICPA Audit and Accounting Guide, Audits of Investment Companies, was issued and is effective for fiscal years beginning after December 15, 2000. The revised Guide will require the Fund to amortize premium and discount on all fixed-income securities by the cumulative amount of amortization that would have been recognized had amortization been in effect from the purchase date of each holding. Adopting this accounting principle will not effect the Fund's net asset value, but will change the classification of certain amounts between interest income and realized and unrealized gain/loss in the Statement of Operations. The Fund expects that the impact of the adoption of this principle will not be material to the financial statements.
K. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.75% of the first
$150 million of the Fund's average daily net assets, plus 0.50% of the Fund's
average daily net assets in excess of $150 million.
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 December 31, 2000, AIM was
paid $219,636 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 December 31, 2000, AFS was
paid $2,257,435 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended December 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $5,444,457,
$13,096,097 and $2,965,032, respectively, as compensation under the Plans.
AIM Distributors received commissions of $1,348,605 from sales of the Class A
shares of the Fund during the year ended December 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 December 31, 2000,
AIM Distributors received $284,148 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 2000, the Fund paid legal fees of $10,428
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the year ended December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $62,520 and reductions in custodian fees of $26,994 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $89,514.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended December 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.
FS-15
NOTE 6-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 December 31, 2000, securities with an aggregate value of $344,033,650 were
on loan to brokers. The loans were secured by cash collateral of $360,562,435
received by the Fund and invested in affiliated money market funds as follows:
$180,281,218 in STIC Liquid Assets Portfolio and $180,281,217 in STIC Prime
Portfolio. For the year ended December 31, 2000, the Fund received fees of
$340,426 for securities lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 2000 was
$3,249,323,181 and $1,965,643,456, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 634,329,659 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (167,683,067) ========================================================= Net unrealized appreciation of investment securities $ 466,646,592 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $3,802,185,803 |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended December 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ----------
Beginning of year 3,490 $1,494,360
---------------------------------------------------------
Written 7,912 3,383,264
---------------------------------------------------------
Closed (8,872) (3,537,089)
---------------------------------------------------------
Exercised (1,280) (642,433)
---------------------------------------------------------
Expired (1,250) (698,102)
=========================================================
End of year -- $ --
_________________________________________________________
=========================================================
|
NOTE 9-FUTURES CONTRACTS
On December 31, 2000, $24,443,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- ---------- ------------ --------------
Nasdaq 100 Index 156 Mar-01/Buy $ 37,042,200 $ (6,107,669)
-----------------------------------------------------------------------------
S&P 500 Index 822 Mar-01/Buy 274,342,500 (4,011,309)
=============================================================================
$311,384,700 $(10,118,978)
_____________________________________________________________________________
=============================================================================
|
FS-16
NOTE 10-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 2000 and 1999 were as follows:
2000 1999
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- --------------
Sold:
Class A 44,686,844 $1,459,628,858 24,207,279 $ 705,353,097
----------------------------------------------------------------------------------------------------------------------------
Class B 13,281,625 433,100,994 9,923,280 287,877,047
----------------------------------------------------------------------------------------------------------------------------
Class C 7,345,840 240,137,040 3,295,250 96,614,771
============================================================================================================================
Issued as reinvestment of dividends:
Class A 2,771,578 87,115,195 1,334,538 39,562,999
----------------------------------------------------------------------------------------------------------------------------
Class B 1,260,443 39,350,153 652,505 19,306,388
----------------------------------------------------------------------------------------------------------------------------
Class C 313,857 9,736,859 92,159 2,744,998
============================================================================================================================
Reacquired:
Class A (19,211,948) (623,938,039) (17,165,067) (501,186,620)
----------------------------------------------------------------------------------------------------------------------------
Class B (5,548,847) (181,381,816) (6,020,681) (175,148,851)
----------------------------------------------------------------------------------------------------------------------------
Class C (1,639,854) (53,297,315) (1,289,864) (37,559,127)
============================================================================================================================
43,259,538 $1,410,451,929 15,029,399 $ 437,564,702
____________________________________________________________________________________________________________________________
============================================================================================================================
|
NOTE 11-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996
---------- ---------- ---------- -------- --------
Net asset value, beginning of period $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22
----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.92 0.82 0.71 0.60 0.66
----------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.23) 4.46 2.45 4.66 2.99
============================================================================================================================
Total from investment operations (1.31) 5.28 3.16 5.26 3.65
============================================================================================================================
Less distributions:
Dividends from net investment income (0.79) (0.82) (0.65) (0.55) (0.55)
----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.49) -- (0.06) (0.77) (0.48)
============================================================================================================================
Total distributions (1.28) (0.82) (0.71) (1.32) (1.03)
============================================================================================================================
Net asset value, end of period $ 30.10 $ 32.69 $ 28.23 $ 25.78 $ 21.84
____________________________________________________________________________________________________________________________
============================================================================================================================
Total return(b) (4.18)% 19.04% 12.46% 24.41% 19.25%
____________________________________________________________________________________________________________________________
============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,507,641 $1,800,350 $1,318,230 $683,633 $334,189
____________________________________________________________________________________________________________________________
============================================================================================================================
Ratio of expenses to average net assets 0.96%(c) 0.94% 0.95% 0.98% 1.15%
============================================================================================================================
Ratio of net investment income to average net assets 2.80%(c) 2.81% 2.81% 2.48% 2.97%
____________________________________________________________________________________________________________________________
============================================================================================================================
Portfolio turnover rate 55% 65% 43% 66% 72%
____________________________________________________________________________________________________________________________
============================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $2,177,782,695.
FS-17
NOTE 11-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996
---------- ---------- -------- -------- --------
Net asset value, beginning of period $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.66 0.58 0.42 0.38 0.48
--------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.23) 4.45 2.51 4.68 2.99
==========================================================================================================================
Total from investment operations (1.57) 5.03 2.93 5.06 3.47
==========================================================================================================================
Less distributions:
Dividends from net investment income (0.54) (0.60) (0.44) (0.37) (0.38)
--------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.49) -- (0.06) (0.77) (0.48)
==========================================================================================================================
Total distributions (1.03) (0.60) (0.50) (1.14) (0.86)
==========================================================================================================================
Net asset value, end of period $ 30.01 $ 32.61 $ 28.18 $ 25.75 $ 21.83
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(b) (4.93)% 18.08% 11.53% 23.42% 18.28%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,358,823 $1,183,215 $894,165 $486,506 $237,082
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets 1.73%(c) 1.75% 1.76% 1.79% 1.97%
==========================================================================================================================
Ratio of net investment income to average net assets 2.03%(c) 2.00% 2.00% 1.67% 2.15%
==========================================================================================================================
Portfolio turnover rate 55% 65% 43% 66% 72%
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $1,309,609,673.
CLASS C
----------------------------------------------------------
AUGUST 4, 1997
YEAR ENDED DECEMBER 31, (DATE SALES COMMENCED)
-------------------------------- TO DECEMBER 31,
2000(a) 1999(a) 1998(a) 1997
-------- -------- -------- ----------------------
Net asset value, beginning of period $ 32.65 $ 28.21 $ 25.76 $25.55
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.66 0.58 0.42 0.16
------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.23) 4.46 2.53 1.01
========================================================================================================================
Total from investment operations (1.57) 5.04 2.95 1.17
========================================================================================================================
Less distributions:
Dividends from net investment income (0.54) (0.60) (0.44) (0.19)
------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.49) -- (0.06) (0.77)
========================================================================================================================
Total distributions (1.03) (0.60) (0.50) (0.96)
========================================================================================================================
Net asset value, end of period $ 30.05 $ 32.65 $ 28.21 $25.76
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) (4.93)% 18.09% 11.60% 4.67%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $365,510 $200,585 $114,163 $9,394
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets 1.73%(c) 1.75% 1.73% 1.78%(d)
========================================================================================================================
Ratio of net investment income to average net assets 2.03%(c) 2.00% 2.03% 1.68%(d)
========================================================================================================================
Portfolio turnover rate 55% 65% 43% 66%
________________________________________________________________________________________________________________________
========================================================================================================================
|
(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 $296,503,243.
(d) Annualized.
FS-18
NOTE 12-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence, KPMG LLP resigned as Fund auditors on December 28, 2000. The Board
of Trustees of the Trust, upon recommendation of its Audit Committee, accepted
the resignation of KPMG LLP and appointed PricewaterhouseCoopers LLP as
independent public accountants to audit the financial statements of the Fund.
KPMG LLP had served as independent public accountants for the two years ended
December 31, 1999. The audit reports of KPMG LLP on the financial statements of
the Fund for the two years ended December 31, 1999 did not contain any adverse
opinions or disclaimer of opinions, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. In connection with the
audits for the two years ended December 31, 1999, there were no disagreements
with KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinions that might be rendered on
the Fund's financial statements.
FS-19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM European Small Company Fund and Board of Trustees of AIM Funds Group:
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 European Small Company (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-20
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2000
MARKET
SHARES VALUE
FOREIGN STOCKS-90.77%
AUSTRIA-1.04%
Palfinger A.G.
(Manufacturing-Specialized) 4,400 $ 130,152
==================================================================
BELGIUM-1.50%
Omega Pharma S.A. (Health
Care-Drugs-Generic & Other) 4,600 187,472
==================================================================
FINLAND-3.52%
Amer Group Ltd. (Leisure Time-Products) 6,000 157,760
------------------------------------------------------------------
Elcoteq Network Corp.-Class A
(Manufacturing-Specialized) 4,840 152,258
------------------------------------------------------------------
Vacon Oyj (Electrical Equipment)
(Acquired 12/08/00-12/19/00; Cost
$105,077)(a)(b) 16,800 130,941
==================================================================
440,959
==================================================================
FRANCE-26.31%
Altedia (Computers-Software &
Services)(a) 4,070 172,216
------------------------------------------------------------------
Arkopharma (Health Care-Drugs-Generic &
Other) 1,100 160,108
------------------------------------------------------------------
Beneteau (Manufacturing-Specialized) 1,500 190,158
------------------------------------------------------------------
Egide S.A. (Electronics-Component
Distributors)(a) 500 259,178
------------------------------------------------------------------
HighWave Optical Technologies
(Communications Equipment)(a) 1,100 149,675
------------------------------------------------------------------
LVL Medical S.A. (Health Care-Medical
Products & Supplies) 2,400 179,171
------------------------------------------------------------------
Manitou B.F. S.A.
(Machinery-Diversified) 1,720 165,393
------------------------------------------------------------------
Marionnaud Parfumeries
(Retail-Specialty)(a) 1,900 247,646
------------------------------------------------------------------
Metrologic Group (Computers-Software &
Services) 2,090 176,635
------------------------------------------------------------------
Net2S (Computers-Networking)(a) 7,290 184,833
------------------------------------------------------------------
Pinguely-Haulotte (Engineering &
Construction) 10,830 315,267
------------------------------------------------------------------
Radiall S.A. (Communications Equipment) 1,400 236,641
------------------------------------------------------------------
Riber S.A. (Electrical Equipment)(a) 10,150 185,861
------------------------------------------------------------------
Royal Canin S.A. (Foods) 630 67,443
------------------------------------------------------------------
Seche Environnement (Waste Management) 2,600 233,899
------------------------------------------------------------------
Silicon-On-Insulator Technologies
(SOITEC) (Electronics-Component
Distributors)(a) 6,950 169,686
------------------------------------------------------------------
Trigano (Leisure Time-Products) 6,000 202,835
==================================================================
3,296,645
==================================================================
GERMANY-9.03%
AMB Aachener & Muenchener Beteiligungs A.G.
(Insurance-Multi-Line) 1,200 109,305
------------------------------------------------------------------
Comroad A.G.
(Communications Equipment)(a) 2,410 81,472
------------------------------------------------------------------
ELMOS Semiconductor A.G.
(Electronics-Semiconductors)(a) 2,100 50,286
------------------------------------------------------------------
Gfk A.G. (Services-Commercial &
Consumer) 3,160 92,880
------------------------------------------------------------------
Hugo Boss A.G.-Pfd
(Manufacturing-Specialized) 1,145 306,436
------------------------------------------------------------------
IPC Archtec A.G. (Retail-Computers &
Electronics)(a) 3,120 174,325
------------------------------------------------------------------
Tecis Holding A.G.
(Investment Management) 3,120 199,229
------------------------------------------------------------------
|
MARKET
SHARES VALUE
GERMANY (CONTINUED)
Umweltkontor Renewable Energy A.G.
(Engineering & Construction)(a) 2,700 $ 117,898
==================================================================
1,131,831
==================================================================
NETHERLANDS-2.78%
Nutreco Holding N.V. (Agricultural
Products) 3,818 202,928
------------------------------------------------------------------
Van der Moolen Holding N.V.
(Investment Banking/Brokerage) 1,700 145,590
==================================================================
348,518
==================================================================
NORWAY-1.07%
TGS Nopec Geophysical Co. A.S.A (Oil &
Gas-Exploration & Production)(a) 11,300 134,413
==================================================================
SPAIN-4.53%
Grupo Auxiliar Metalurgico, S.A.
(Gamesa) (Manufacturing-Specialized)
(Acquired 10/30/00-12/18/00; Cost
$180,118)(a)(b) 14,500 348,575
------------------------------------------------------------------
NH Hoteles, S.A. (Investment Management) 17,830 219,337
==================================================================
567,912
==================================================================
SWEDEN-16.19%
Biacore International A.B.
(Electronics-Instrumentation)(a) 5,900 269,006
------------------------------------------------------------------
HiQ International A.B.
(Services-Data Processing) 24,600 182,589
------------------------------------------------------------------
Micronic Laser Systems A.B.
(Electronics-Semiconductors)(a) 9,320 275,716
------------------------------------------------------------------
PartnerTech A.B. (Communications
Equipment) 10,200 141,682
------------------------------------------------------------------
POOLiA A.B.-B Shares
(Services-Employment) 6,100 294,295
------------------------------------------------------------------
Proffice A.B.-B Shares
(Services-Employment) 7,480 213,352
------------------------------------------------------------------
Protect Data A.B. (Computers-Software &
Services) 17,500 205,970
------------------------------------------------------------------
Q-Med A.B. (Healthcare-Medical Products
& Supplies)(a) 14,700 299,268
------------------------------------------------------------------
TV 4 A.B. (Broadcasting-Television,
Radio & Cable) 4,590 146,008
==================================================================
2,027,886
==================================================================
SWITZERLAND-7.64%
Huber & Suhner A.G. (Metal Fabricators) 240 205,862
------------------------------------------------------------------
Micronas Semiconductor Holding A.G.
(Electronics-Semiconductors)(a) 275 115,057
------------------------------------------------------------------
SAIA-Burgess Electronics A.G.
(Electrical Equipment)(a) 472 183,499
------------------------------------------------------------------
Straumann A.G. (Health Care-Specialized
Services) 96 171,799
------------------------------------------------------------------
Synthes Stratec, Inc. (Health
Care-Medical Products & Supplies)(c) 30 22,160
------------------------------------------------------------------
Synthes Stratec, Inc. (Health Care-Medical
Products & Supplies)(b)(c) 100 73,866
------------------------------------------------------------------
Tecan Group A.G. (Health Care-Medical
Products & Supplies) 178 184,646
==================================================================
956,889
==================================================================
|
FS-21
MARKET
SHARES VALUE
UNITED KINGDOM-17.16%
Acal PLC (Electronics-Component
Distributors) 18,910 $ 196,731
------------------------------------------------------------------
Chloride Group PLC (Electrical
Equipment) 89,600 218,386
------------------------------------------------------------------
CML Microsystems PLC
(Electronics-Semiconductors) 23,700 274,029
------------------------------------------------------------------
easyJet PLC (Airlines)(a) 15,000 88,316
------------------------------------------------------------------
First Technology PLC (Auto Parts &
Equipment) 24,550 193,093
------------------------------------------------------------------
Genetix Group PLC (Healthcare-Medical
Products & Supplies)(a) 77,200 280,512
------------------------------------------------------------------
HIT Entertainment PLC
(Broadcasting-Television, Radio &
Cable) 26,800 160,897
------------------------------------------------------------------
Horizon Technology Group PLC
(Computers-Software & Services)(a) 21,700 136,528
------------------------------------------------------------------
John David Sports PLC
(Retail-Specialty-Apparel)(a) 40,100 155,900
------------------------------------------------------------------
NSB Retail Systems PLC
(Computers-Software & Services) 37,400 94,512
------------------------------------------------------------------
Pace Micro Technology PLC
(Communications Equipment) 12,400 84,365
------------------------------------------------------------------
Volex Group PLC (Electrical Equipment) 9,130 266,216
==================================================================
2,149,485
==================================================================
Total Foreign Stocks
(Cost $11,133,378) 11,372,162
==================================================================
MARKET
SHARES VALUE
MONEY MARKET FUNDS-7.63%
STIC Liquid Assets Portfolio(d) 478,262 $ 478,262
------------------------------------------------------------------
STIC Prime Portfolio(d) 478,262 478,262
==================================================================
Total Money Market Funds
(Cost $956,524) 956,524
==================================================================
TOTAL INVESTMENTS-98.40%
(Cost $12,089,902) 12,328,686
==================================================================
OTHER ASSETS LESS LIABILITIES-1.60% 200,626
==================================================================
NET ASSETS-100.00% $12,529,312
__________________________________________________________________
==================================================================
|
Investment Abbreviations:
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
12/31/00 was $553,382, which represented 4.42% of the Fund's net assets.
(c) Security fair valued in accordance with the procedures established by the
Board of Trustees.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-22
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost $12,089,902) $12,328,686
--------------------------------------------------------------
Foreign currencies, at value (cost $132,494) 134,992
--------------------------------------------------------------
Receivables for:
Investments sold 55,260
--------------------------------------------------------------
Fund shares sold 57,808
--------------------------------------------------------------
Dividends 5,003
--------------------------------------------------------------
Investment for deferred compensation plan 2,546
--------------------------------------------------------------
Due from advisor 20,780
--------------------------------------------------------------
Other assets 89,168
==============================================================
Total assets 12,694,243
==============================================================
LIABILITIES:
Payables for:
Investments purchased 83,133
--------------------------------------------------------------
Fund shares reacquired 27,535
--------------------------------------------------------------
Deferred compensation plan 2,546
--------------------------------------------------------------
Accrued administrative services fees 4,235
--------------------------------------------------------------
Accrued distribution fees 9,273
--------------------------------------------------------------
Accrued trustees' fees 239
--------------------------------------------------------------
Accrued transfer agent fees 3,615
--------------------------------------------------------------
Accrued operating expenses 34,355
==============================================================
Total liabilities 164,931
==============================================================
Net assets applicable to shares outstanding $12,529,312
==============================================================
NET ASSETS:
Class A $8,605,874
--------------------------------------------------------------
Class B $2,850,696
--------------------------------------------------------------
Class C $1,072,742
--------------------------------------------------------------
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 938,301
--------------------------------------------------------------
Class B 310,725
--------------------------------------------------------------
Class C 116,989
--------------------------------------------------------------
Class A :
--------------------------------------------------------------
Net asset value and redemption price per share $ 9.17
==============================================================
Offering price per share:
(Net asset value of $9.17 divided by 94.50%) $ 9.70
==============================================================
Class B :
Net asset value and offering price per share $ 9.17
==============================================================
Class C :
Net asset value and offering price per share $ 9.17
______________________________________________________________
==============================================================
|
STATEMENT OF OPERATIONS
For the Period August 31, 2000 (date operations commenced) through December 31,
2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $153) $ 1,541
------------------------------------------------------------
Dividends from affiliated money market funds 12,493
------------------------------------------------------------
Interest 6,900
============================================================
Total investment income 20,934
============================================================
EXPENSES:
Advisory fees 27,495
------------------------------------------------------------
Administrative services fees 16,667
------------------------------------------------------------
Custodian fees 38,405
------------------------------------------------------------
Distribution fees-Class A 6,979
------------------------------------------------------------
Distribution fees-Class B 6,509
------------------------------------------------------------
Distribution fees-Class C 2,492
------------------------------------------------------------
Transfer agent fees-Class A 6,102
------------------------------------------------------------
Transfer agent fees-Class B 2,438
------------------------------------------------------------
Transfer agent fees-Class C 933
------------------------------------------------------------
Trustees' fees 3,324
------------------------------------------------------------
Registration and filing fees 48,889
------------------------------------------------------------
Professional Fees 18,782
------------------------------------------------------------
Other 8,948
============================================================
Total expenses 187,963
============================================================
Less: Fees waived and expenses reimbursed (121,631)
------------------------------------------------------------
Expenses paid indirectly (2,160)
============================================================
Net expenses 64,172
============================================================
Net investment income (loss) (43,238)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) from:
Investment securities (632,788)
------------------------------------------------------------
Foreign currencies 43,810
============================================================
(588,978)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 238,784
------------------------------------------------------------
Foreign currencies 160
============================================================
238,944
============================================================
Net gain (loss) from investment securities and
foreign currencies (350,034)
============================================================
Net increase (decrease) in net assets resulting
from operations $(393,272)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-23
STATEMENT OF CHANGES IN NET ASSETS
For the Period August 31, 2000 (date operations commenced) through December 31,
2000
2000
-----------
OPERATIONS:
Net investment income (loss) $ (43,238)
---------------------------------------------------------------
Net realized gain (loss) from investment
securities, and foreign currencies (588,978)
---------------------------------------------------------------
Change in net unrealized appreciation of
investment securities and foreign currencies 238,944
===============================================================
Net increase (decrease) in net assets
resulting from operations (393,272)
===============================================================
Distributions to shareholders from net investment
income:
Class A (38,008)
---------------------------------------------------------------
Class B (9,040)
---------------------------------------------------------------
Class C (3,158)
---------------------------------------------------------------
Share transactions-net:
Class A 8,921,798
---------------------------------------------------------------
Class B 2,932,808
---------------------------------------------------------------
Class C 1,118,184
===============================================================
Net increase in net assets 12,529,312
===============================================================
NET ASSETS:
Beginning of year ----
---------------------------------------------------------------
End of year $12,529,312
===============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $12,962,197
---------------------------------------------------------------
Undistributed net investment income (loss) (39,040)
---------------------------------------------------------------
Undistributed net realized gain (loss) from
investment securities and foreign currencies (632,789)
---------------------------------------------------------------
Unrealized appreciation of investment securities
and foreign currencies 238,944
===============================================================
$12,529,312
_______________________________________________________________
===============================================================
|
See Notes to Financial Statements.
FS-24
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM European Small Company Fund (the "Fund") is a series portfolio of AIM Funds
Group (the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund commenced
operations on August 31, 2000. The Fund currently offers three different classes
of shares: Class A shares, Class B shares and Class C shares. Class A shares are
sold with a front-end sales charge. Class B shares and Class C shares are sold
with a contingent deferred sales charge. Matters affecting each portfolio or
class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is to achieve 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 Trusts 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 Funds 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 Funds 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 December 31, 2000, undistributed net investment income was increased by
$54,404, undistributed net realized gains decreased by $43,811, and paid-in
capital decreased by $10,593 as a result of differing book/tax treatment of
foreign currency transactions 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. The Fund has a capital loss carryforward of $220,935 as of December 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
FS-25
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 and certain transfer agency expenses directly attributable to a class of shares are charged to those classes operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.95% of the Fund's
average daily net assets. For the period August 31, 2000 (date operation
commenced) through December 31, 2000, AIM waived fees of $27,495 and reimbursed
expenses of $94,136.
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 period August 31, 2000 (date operations
commenced) through December 31, 2000 AIM was paid $16,667 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 period August 31, 2000 (date
operations commenced) through December 31, 2000 AFS was paid $3,923 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
0.35% 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 period August 31, 2000 (date
operations commenced) through December 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $6,979, $6,509 and $2,492, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $18,828 from sales of the Class A
shares of the Fund during the period August 31, 2000 (date operations commenced)
through December 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 same period, AIM Distributors received $47 in contingent
deferred sales charges imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the period August 31, 2000 (date operations commenced) through December
31, 2000, the Fund paid legal fees of $976 for services rendered by Kramer,
Levin, Naftalis & Frankel LLP as counsel to the Board of Trustees. A member of
that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the period August 31, 2000 (date operations commenced) through December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $65 and reductions in custodian fees of $2,095 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $2,160.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the period August 31, 2000
through December 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.
FS-26
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the period August 31, 2000 (date
operations commenced) through December 31, 2000 was $14,023,278 and $2,257,111,
respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $953,700 ------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (750,372) ============================================================ Net unrealized appreciation of investment securities $203,328 ____________________________________________________________ ============================================================ |
Cost of investments for tax purposes is $12,125,358.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the period August 31, 2000 (date operations commenced) and December 31, 2000 were as follows:
2000
----------------------
SHARES AMOUNT
--------- -----------
Sold:
Class A 1,020,627 $ 9,668,343
----------------------------------------------------------------
Class B 314,840 2,969,953
----------------------------------------------------------------
Class C 119,558 1,140,988
================================================================
Issued as reinvestment of dividends:
Class A 4,177 37,222
----------------------------------------------------------------
Class B 1,014 9,037
----------------------------------------------------------------
Class C 353 3,141
================================================================
Reacquired:
Class A (86,503) (783,767)
----------------------------------------------------------------
Class B (5,129) (46,182)
----------------------------------------------------------------
Class C (2,922) (25,945)
================================================================
1,366,015 $12,972,790
________________________________________________________________
================================================================
|
FS-27
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
----------------
AUGUST 31,
2000
(DATE OPERATIONS
COMMENCED) TO
DECEMBER 31,
2000(a)
----------------
Net asset value, beginning of period $10.00
--------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04)
--------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (0.74)
====================================================================
Total from investment operations (0.78)
====================================================================
Less Dividends from net investment income (0.05)
--------------------------------------------------------------------
Net asset value, end of period $ 9.17
____________________________________________________________________
====================================================================
Total return(b) (7.84)%
____________________________________________________________________
====================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $8,606
____________________________________________________________________
====================================================================
Ratio of expenses to average net assets:
With fee waivers 2.07%(c)
____________________________________________________________________
====================================================================
Without fee waivers 6.28%(c)
____________________________________________________________________
====================================================================
Ratio of net investment loss to average net assets (1.28)%(c)
____________________________________________________________________
====================================================================
Portfolio turnover rate 25%
____________________________________________________________________
====================================================================
|
(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 $5,933,538.
FS-28
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
----------------
AUGUST 31,
2000
(DATE OPERATIONS
COMMENCED) TO
DECEMBER 31,
2000(a)
----------------
Net asset value, beginning of period $10.00
--------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06)
--------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (0.74)
====================================================================
Total from investment operations (0.80)
====================================================================
Less Dividends from net investment income (0.03)
--------------------------------------------------------------------
Net asset value, end of period $ 9.17
____________________________________________________________________
====================================================================
Total return(b) (7.99)%
____________________________________________________________________
====================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,851
____________________________________________________________________
====================================================================
Ratio of expenses to average net assets:
With fee waivers 2.77%(c)
--------------------------------------------------------------------
Without fee waivers 6.98%(c)
____________________________________________________________________
====================================================================
Ratio of net investment income (loss) to average
net assets (1.98)%(c)
____________________________________________________________________
====================================================================
Portfolio turnover rate 25%
____________________________________________________________________
====================================================================
|
(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 $1,936,757.
FS-29
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
----------------
AUGUST 31,
2000
(DATE OPERATIONS
COMMENCED) TO
DECEMBER 31,
2000(a)
----------------
Net asset value, beginning of period $10.00
--------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06)
--------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (0.74)
====================================================================
Total from investment operations (0.80)
====================================================================
Less Dividends from net investment income (0.03)
--------------------------------------------------------------------
Net asset value, end of period $ 9.17
____________________________________________________________________
====================================================================
Total return(b) (7.99)%
____________________________________________________________________
====================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,073
____________________________________________________________________
====================================================================
Ratio of expenses to average net assets:
With fee waivers 2.77%(c)
--------------------------------------------------------------------
Without fee waivers 6.98%(c)
____________________________________________________________________
====================================================================
Ratio of net investment income (loss) to average
net assets (1.98)%(c)
____________________________________________________________________
====================================================================
Portfolio turnover rate 25%
____________________________________________________________________
====================================================================
|
(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 $741,680.
NOTE 9-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP has
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence, KPMG LLP resigned as Fund auditors on December 28, 2000 prior to
the first fiscal period end of the Fund. The Board of Trustees of the Trust,
upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP
and appointed PricewaterhouseCoopers LLP as independent public accountants to
audit the financial statements of the Fund. There were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinions that might be rendered on
the Fund's financial statements.
FS-30
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Global Utilities Fund
and Board of Trustees of AIM Funds Group:
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 Utilities Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statements of changes in net assets of the Fund for the year ended December 31, 1999 and the financial highlights for each of the periods ended on or before December 31, 1999 were audited by other independent accountants whose report dated February 14, 2000 expressed an unqualified opinion thereon.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-31
SCHEDULE OF INVESTMENTS
December 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-69.62%
BROADCASTING (TELEVISION, RADIO & CABLE)-1.34%
General Motors Corp.-Class H(a) 58,500 $ 1,345,500
--------------------------------------------------------------
Univision Communications
Inc.-Class A(a) 113,100 4,630,031
==============================================================
5,975,531
==============================================================
COMMUNICATIONS EQUIPMENT-0.83%
Corning Inc. 23,400 1,235,812
--------------------------------------------------------------
JDS Uniphase Corp.(a) 16,300 679,506
--------------------------------------------------------------
Redback Networks Inc.(a) 43,800 1,795,800
==============================================================
3,711,118
==============================================================
COMPUTERS (HARDWARE)-0.23%
Sycamore Networks, Inc.(a) 27,500 1,024,375
==============================================================
COMPUTERS (NETWORKING)-1.18%
Cisco Systems, Inc.(a) 70,700 2,704,275
--------------------------------------------------------------
Juniper Networks, Inc.(a) 20,200 2,546,462
==============================================================
5,250,737
==============================================================
COMPUTERS (SOFTWARE & SERVICES)-0.60%
Ariba, Inc.(a) 26,600 1,429,750
--------------------------------------------------------------
Henry (Jack) & Associates, Inc. 20,000 1,242,500
==============================================================
2,672,250
==============================================================
ELECTRIC COMPANIES-31.00%
Allegheny Energy, Inc. 286,000 13,781,625
--------------------------------------------------------------
Constellation Energy Group 268,000 12,076,750
--------------------------------------------------------------
DTE Energy Co. 172,000 6,697,250
--------------------------------------------------------------
Duke Energy Corp. 141,000 12,020,250
--------------------------------------------------------------
Edison International 216,000 3,374,999
--------------------------------------------------------------
Energy East Corp. 475,200 9,355,500
--------------------------------------------------------------
Exelon Corp. 185,000 12,988,850
--------------------------------------------------------------
FPL Group, Inc. 175,000 12,556,250
--------------------------------------------------------------
Montana Power Co. (The) 141,100 2,927,825
--------------------------------------------------------------
Niagara Mohawk Holdings Inc.(a) 510,300 8,515,631
--------------------------------------------------------------
NRG Energy, Inc.(a) 283,300 7,879,281
--------------------------------------------------------------
PG&E Corp. 170,000 3,400,000
--------------------------------------------------------------
Pinnacle West Capital Corp. 273,600 13,030,200
--------------------------------------------------------------
Reliant Energy, Inc. 163,000 7,059,938
--------------------------------------------------------------
Southern Co. (The) 62,500 2,078,125
--------------------------------------------------------------
Southern Energy, Inc.(a) 137,000 3,878,813
--------------------------------------------------------------
Xcel Energy, Inc. 226,000 6,568,125
==============================================================
138,189,412
==============================================================
ELECTRICAL EQUIPMENT-0.65%
Active Power, Inc.(a) 65,500 1,436,906
--------------------------------------------------------------
|
--------------------------------------------------------------
MARKET
SHARES VALUE
ELECTRICAL EQUIPMENT-(CONTINUED)
|
Capstone Turbine Corp.(a) 51,900 $ 1,453,200
==============================================================
2,890,106
==============================================================
ELECTRONICS (SEMICONDUCTORS)-1.07%
SDL, Inc.(a) 22,000 3,260,125
--------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 27,100 1,498,969
==============================================================
4,759,094
==============================================================
ENGINEERING & CONSTRUCTION-0.82%
Quanta Services, Inc.(a) 114,000 3,669,375
==============================================================
NATURAL GAS-12.45%
Dynegy Inc.-Class A 272,000 15,249,000
--------------------------------------------------------------
El Paso Energy Corp. 72,900 5,221,463
--------------------------------------------------------------
Enron Corp. 100,200 8,329,125
--------------------------------------------------------------
KeySpan Corp. 45,000 1,906,875
--------------------------------------------------------------
NiSource Inc. 431,000 13,253,250
--------------------------------------------------------------
Williams Cos., Inc. (The) 289,200 11,549,925
==============================================================
55,509,638
==============================================================
|
OIL & GAS (EXPLORATION & PRODUCTION)-0.73%
Apache Corp. 46,100 3,229,881 ============================================================== POWER PRODUCERS (INDEPENDENT)-1.43% AES Corp. (The)(a) 114,800 6,357,050 ============================================================== SERVICES (COMMERCIAL & CONSUMER)-0.78% Convergys Corp.(a) 77,000 3,489,063 ============================================================== |
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-1.40%
Level 3 Communications, Inc.(a) 47,900 1,571,719
--------------------------------------------------------------
Openwave Systems Inc.(a) 65,100 3,120,731
--------------------------------------------------------------
Western Wireless Corp.-Class A(a) 39,700 1,555,744
==============================================================
6,248,194
==============================================================
TELEPHONE-15.11%
BellSouth Corp. 127,600 5,223,625
--------------------------------------------------------------
Broadwing Inc.(a) 383,344 8,745,035
--------------------------------------------------------------
CenturyTel, Inc. 146,000 5,219,500
--------------------------------------------------------------
McLeodUSA, Inc.-Class A(a) 395,400 5,585,025
--------------------------------------------------------------
Qwest Communications International
Inc.(a) 152,100 6,236,100
--------------------------------------------------------------
SBC Communications Inc. 366,693 17,509,591
--------------------------------------------------------------
Time Warner Telecom Inc.-Class
A(a) 91,700 5,817,219
--------------------------------------------------------------
FS-32
|
MARKET
SHARES VALUE
TELEPHONE-(CONTINUED)
Verizon Communications Inc. 259,462 $ 13,005,533
==============================================================
67,341,628
==============================================================
Total Domestic Common Stocks
(Cost $212,484,051) 310,317,452
==============================================================
FOREIGN STOCKS & OTHER EQUITY INTERESTS-15.70%
BERMUDA-0.11%
Global Crossing Ltd.
(Telecommunications- Long
Distance)(a) 32,523 465,486
==============================================================
BRAZIL-0.70%
Companhia Paranaense de
Energia-Copel-ADR (Electric
Companies) 370,000 3,121,875
==============================================================
CANADA-1.42%
Nortel Networks Corp.
(Communications Equipment) 53,500 1,715,344
--------------------------------------------------------------
TELUS Corp. (Telephone) 55,382 1,533,979
--------------------------------------------------------------
TELUS Corp.-Class A (Telephone) 18,460 483,005
--------------------------------------------------------------
Westcoast Energy Inc. (Natural
Gas) 106,300 2,597,706
==============================================================
6,330,034
==============================================================
FINLAND-0.97%
Nokia Oyj-ADR (Communications
Equipment) 99,600 4,332,600
==============================================================
FRANCE-1.49%
Suez Lyonnaise des Eaux S.A.
(Manufacturing- Diversified) 24,900 4,547,866
--------------------------------------------------------------
TotalFinaElf S.A.
(Oil-International Integrated) 14,000 2,082,437
==============================================================
6,630,303
==============================================================
GERMANY-0.69%
E.On A.G.
(Manufacturing-Diversified)(a) 50,560 3,076,598
==============================================================
ITALY-2.00%
ACEA S.p.A. (Water Utilities) 388,800 4,600,293
--------------------------------------------------------------
AEM S.p.A. (Electric Companies) 645,000 1,895,801
--------------------------------------------------------------
Telecom Italia S.p.A. (Telephone) 400,400 2,406,372
==============================================================
8,902,466
==============================================================
JAPAN-1.13%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long
Distance) 125 899,729
--------------------------------------------------------------
Nippon Telegraph & Telephone
Corp.-ADR
(Telecommunications-Long
Distance) 30,000 1,070,625
--------------------------------------------------------------
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 179 3,084,048
==============================================================
5,054,402
==============================================================
SOUTH KOREA-0.54%
Korea Telecom Corp.-ADR
(Telephone) 77,800 2,411,800
==============================================================
SPAIN-2.19%
Endesa S.A. (Electric Companies) 227,000 3,868,933
--------------------------------------------------------------
Telefonica S.A. (Telephone)(a) 355,838 $ 5,881,034
==============================================================
9,749,967
==============================================================
UNITED KINGDOM-4.46%
Amdocs Ltd.
(Telecommunications-Cellular/
Wireless)(a) 36,300 2,404,875
--------------------------------------------------------------
COLT Telecom Group PLC
(Telephone)(a) 120,800 2,601,104
--------------------------------------------------------------
Kelda Group PLC (Water Utilities) 538,407 3,131,761
--------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 131,526 1,196,742
--------------------------------------------------------------
ScottishPower PLC (Electric
Companies) 711,850 5,630,831
--------------------------------------------------------------
United Utilities PLC (Water
Utilities) 151,936 1,510,813
--------------------------------------------------------------
Vodafone Group PLC
(Telecommunications-
Cellular/Wireless) 930,665 3,416,435
==============================================================
19,892,561
==============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$63,871,661) 69,968,092
==============================================================
DOMESTIC CONVERTIBLE PREFERRED STOCKS-3.65%
ELECTRIC COMPANIES-0.42%
SEI Trust I-Series A, $3.13 Conv.
Pfd. 30,600 1,897,200
==============================================================
NATURAL GAS-1.49%
El Paso Energy Cap Trust I-$2.38
Conv. Pfd. 74,500 6,630,500
==============================================================
POWER PRODUCERS
(INDEPENDENT)-1.51%
Calpine Capital Trust III-$2.50
Conv. Pfd. (Acquired 08/03/00;
Cost $5,575,000)(b) 111,500 6,731,813
==============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-0.23%
MediaOne Group, Inc.-$3.04 Conv.
Pfd. 29,200 1,040,250
==============================================================
Total Domestic Convertible
Preferred Stocks (Cost
$12,366,940) 16,299,763
==============================================================
PRINCIPAL
AMOUNT
U.S. DOLLAR DENOMINATED BONDS & NOTES-4.25%
COMMUNICATIONS EQUIPMENT-0.21%
Corning Inc., Sr. Conv. Unsec.
Deb., 2.07%, 11/08/15(c) $ 1,317,000 940,009
==============================================================
COMPUTERS (HARDWARE)-0.75%
Candescent Technologies Corp., Sr.
Conv. Unsec. Gtd. Sub. Deb.,
8.00%, 05/01/03 (Acquired
04/17/98-11/30/98; Cost
$4,509,350)(b)(d) 4,605,000 3,361,650
==============================================================
ELECTRIC COMPANIES-1.29%
Southern Energy, Inc., Sr. Notes,
7.90%, 07/15/09 (Acquired
10/16/00; Cost $5,422,184)(b) 5,730,000 5,747,018
==============================================================
|
FS-33
PRINCIPAL MARKET
AMOUNT VALUE
FINANCIAL (DIVERSIFIED)-1.05%
Limestone Electron Trust, Sr.
Notes, 8.63%, 03/15/03 (Acquired
03/15/00; Cost $4,550,000)(b) $ 4,550,000 $ 4,685,590
==============================================================
NATURAL GAS-0.30%
Dynegy Inc., Sr. Unsec. Deb.,
7.13%, 05/15/18 1,400,000 1,321,852
==============================================================
POWER PRODUCERS (INDEPENDENT)-0.23%
AES Corp. (The), Sr. Unsec. Sub.
Notes, 10.25%, 07/15/06 1,000,000 1,037,500
==============================================================
TELECOMMUNICATIONS (LONG DISTANCE)-0.42%
AT&T Corp., Sr. Unsec. Notes,
7.75%, 03/01/07 1,850,000 1,846,522
==============================================================
Total U.S. Dollar Denominated
Bonds & Notes (Cost
$19,767,949) 18,940,141
==============================================================
PRINCIPAL
AMOUNT(e)
NON-U.S. DOLLAR DENOMINATED BONDS
& NOTES-2.45%
CANADA-1.06%
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Unsec. Disc. Notes, 10.75%,
02/15/09(f) CAD 3,000,000 1,604,893
--------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT(e) VALUE
CANADA-(CONTINUED)
Teleglobe Canada Inc. (Telephone),
Unsec. Deb., 8.35%, 06/20/03 CAD 2,400,000 $ 1,654,098
--------------------------------------------------------------
TransCanada PipeLines Ltd.
(Natural Gas)- Series Q, Deb.,
10.63%, 10/20/09 CAD 1,750,000 1,483,073
==============================================================
4,742,064
==============================================================
UNITED KINGDOM-1.39%
National Grid Co. PLC (Electric
Companies), Conv. Bonds, 4.25%,
02/17/08 (Acquired 02/05/98;
Cost $4,574,700)(b) GBP 2,760,000 6,169,700
==============================================================
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $9,264,061) 10,911,764
==============================================================
SHARES
MONEY MARKET FUNDS-6.61%
STIC Liquid Assets Portfolio(g) 14,742,379 14,742,379
==============================================================
STIC Prime Portfolio(g) 14,742,379 14,742,379
==============================================================
Total Money Market Funds (Cost
$29,484,758) 29,484,758
==============================================================
TOTAL INVESTMENTS-102.28% (Cost
$347,239,420) 455,921,970
==============================================================
LIABILITIES LESS OTHER
ASSETS-(2.28)% (10,175,111)
==============================================================
NET ASSETS-100.00% $445,746,859
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt CAD - Canadian Dollars Conv. - Convertible Deb. - Debentures Disc. - Discounted GBP - British Pound Sterling Gtd. - Guaranteed Pfd. - Preferred Sr. - Senior Sub. - Subordinated Unsec. - Unsecured |
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
12/31/00 was $26,695,771, which represented 5.99% of the Fund's net assets.
(c) Zero coupon bond issued at a discount. The interest rate shown represents
the yield to maturity at issue.
(d) Security fair valued in accordance with procedures established by the Board
of Trustees.
(e) Foreign denominated security. Par value is denominated in currency
indicated.
(f) Discounted bond at issue. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(g) 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
December 31, 2000
ASSETS:
Investments, at market value (cost
$347,239,420) $455,921,970
------------------------------------------------------------
Foreign currencies, at value (cost $65,830) 66,796
------------------------------------------------------------
Receivables for:
Investments sold 2,378,548
------------------------------------------------------------
Fund shares sold 1,078,674
------------------------------------------------------------
Dividends and interest 1,280,084
------------------------------------------------------------
Investment for deferred compensation plan 42,905
------------------------------------------------------------
Other assets 25,845
============================================================
Total assets 460,794,822
============================================================
LIABILITIES:
Payables for:
Investments purchased 13,010,170
------------------------------------------------------------
Fund shares reacquired 1,234,381
------------------------------------------------------------
Dividends 190
------------------------------------------------------------
Deferred compensation plan 42,905
------------------------------------------------------------
Accrued advisory fees 198,516
------------------------------------------------------------
Accrued administrative services fees 9,198
------------------------------------------------------------
Accrued distribution fees 388,318
------------------------------------------------------------
Accrued trustees' fees 699
------------------------------------------------------------
Accrued transfer agent fees 70,815
------------------------------------------------------------
Accrued operating expenses 92,771
============================================================
Total liabilities 15,047,963
============================================================
Net assets applicable to shares outstanding $445,746,859
____________________________________________________________
============================================================
NET ASSETS:
Class A $267,200,005
____________________________________________________________
============================================================
Class B $160,819,512
____________________________________________________________
============================================================
Class C $ 17,727,342
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 11,901,001
____________________________________________________________
============================================================
Class B 7,184,513
____________________________________________________________
============================================================
Class C 792,423
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 22.45
------------------------------------------------------------
Offering price per share:
(Net asset value of $22.45 divided by
94.50%) $ 23.76
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 22.38
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 22.37
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended December 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$215,288) $ 5,913,082
------------------------------------------------------------
Dividends from affiliated money market funds 2,062,580
------------------------------------------------------------
Interest 2,234,860
============================================================
Total investment income 10,210,522
============================================================
EXPENSES:
Advisory fees 2,457,103
------------------------------------------------------------
Administrative services fees 111,177
------------------------------------------------------------
Custodian fees 141,732
------------------------------------------------------------
Distribution fees -- Class A 684,300
------------------------------------------------------------
Distribution fees -- Class B 1,637,899
------------------------------------------------------------
Distribution fees -- Class C 139,107
------------------------------------------------------------
Transfer agent fees -- Class A 335,456
------------------------------------------------------------
Transfer agent fees -- Class B 231,569
------------------------------------------------------------
Transfer agent fees -- Class C 19,667
------------------------------------------------------------
Trustees' fees 8,716
------------------------------------------------------------
Other 248,675
============================================================
Total expenses 6,015,401
------------------------------------------------------------
Less: Expenses paid indirectly (7,999)
============================================================
Net expenses 6,007,402
============================================================
Net investment income 4,203,120
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 45,179,023
------------------------------------------------------------
Foreign currencies (243,063)
------------------------------------------------------------
Option contracts written 206,772
============================================================
45,142,732
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (68,134,842)
------------------------------------------------------------
Foreign currencies 8,924
============================================================
(68,125,918)
============================================================
Net gain (loss) from investment securities,
foreign currencies and option contracts (22,983,186)
============================================================
Net increase (decrease) in net assets
resulting from operations $(18,780,066)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-35
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2000 and 1999
2000 1999
------------ ------------
OPERATIONS:
Net investment income $ 4,203,120 $ 4,536,854
------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 45,142,732 30,572,537
------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (68,125,918) 64,063,548
==========================================================================================
Net increase (decrease) in net assets resulting from
operations (18,780,066) 99,172,939
==========================================================================================
Distributions to shareholders from net investment income:
Class A (2,905,816) (3,130,474)
------------------------------------------------------------------------------------------
Class B (587,054) (980,604)
------------------------------------------------------------------------------------------
Class C (56,822) (28,383)
------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (28,679,886) (13,462,484)
------------------------------------------------------------------------------------------
Class B (17,296,532) (8,054,908)
------------------------------------------------------------------------------------------
Class C (1,858,159) (355,717)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 70,873,896 (3,558,143)
------------------------------------------------------------------------------------------
Class B 43,074,650 3,957,825
------------------------------------------------------------------------------------------
Class C 14,197,274 2,679,799
==========================================================================================
Net increase in net assets 57,981,485 76,239,850
==========================================================================================
NET ASSETS:
Beginning of year 387,765,374 311,525,524
==========================================================================================
End of year $445,746,859 $387,765,374
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $333,805,771 $203,276,266
------------------------------------------------------------------------------------------
Undistributed net investment income (loss) 126,568 (41,312)
------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 3,125,318 7,715,300
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 108,689,202 176,815,120
==========================================================================================
$445,746,859 $387,765,374
__________________________________________________________________________________________
==========================================================================================
|
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve a high total return.
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.
FS-36
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 December 31, 2000, undistributed net investment income was decreased by
$485,548, undistributed net realized gains decreased by $1,898,137, and
paid-in capital increased by $2,383,685 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, differing book/tax treatment of foreign
currency transactions and other reclassifications. Net assets of the Fund
were unaffected by the reclassification discussed above.
C. Distributions -- Distributions from income are declared and
paid quarterly and are recorded on ex-dividend date. Distributions from net
realized capital gains, if any, are generally paid annually and recorded on
ex-dividend date. The Fund may elect to use a portion of the proceeds from
redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the
requirements of the Internal Revenue Code necessary to qualify as a regulated
investment company and, as such, will not be subject to federal income taxes
on otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
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
FS-37
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. Bond Premiums -- It has been the policy of the Fund not to
amortize market premiums on bonds for financial reporting purposes. In
November 2000, a revised AICPA Audit and Accounting Guide, Audits of
Investment Companies, was issued and is effective for fiscal years beginning
after December 15, 2000. The revised Guide will require the Fund to amortize
premium and discount on all fixed-income securities by the cumulative amount
of amortization that would have been recognized had amortization been in
effect from the purchase date of each holding. Adopting this accounting
principle will not effect the Fund's net asset value, but will change the
classification of certain amounts between interest income and realized and
unrealized gain/loss in the Statement of Operations. The Fund expects that
the impact of the adoption of this principle will not be material to the
financial statements.
I. Expenses -- Distribution expenses and certain transfer agency
expenses directly attributable to a class of shares are charged to those
classes' operations. All other expenses which are attributable to more than
one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at an annual rate of 0.60% on the first
$200 million of the Fund's average daily net assets, plus 0.50% on the next $300
million of the Fund's average daily net assets, plus 0.40% on the next $500
million of the Fund's average daily net assets, plus 0.30% on the Fund's average
daily net assets in excess of $1 billion.
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 December 31, 2000, AIM was
paid $111,177 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 December 31, 2000, AFS was
paid $360,224 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended December 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $684,300,
$1,637,899 and $139,107, respectively, as compensation under the Plans.
AIM Distributors received commissions of $174,240 from sales of the Class A
shares of the Fund during the year ended December 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 December 31, 2000,
AIM Distributors received $16,641 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 2000, the Fund paid legal fees of $5,062
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the year ended December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $7,280 and reductions in custodian fees of $719 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $7,999.
FS-38
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended December 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 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 2000 was
$294,824,301 and $214,909,290, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $127,154,099 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (18,471,549) ========================================================= Net unrealized appreciation of investment securities $108,682,550 _________________________________________________________ ========================================================= 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 December 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of year -- $ --
---------------------------------------------------------
Written 918 226,738
---------------------------------------------------------
Closed (918) (226,738)
=========================================================
End of year -- $ --
_________________________________________________________
=========================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 2000 and 1999 were as follows:
2000 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 3,794,538 $106,076,315 1,548,711 $ 34,438,387
----------------------------------------------------------------------------------------------------------------------
Class B 1,986,260 53,880,447 884,404 19,574,340
----------------------------------------------------------------------------------------------------------------------
Class C 558,391 15,179,433 183,463 4,121,099
======================================================================================================================
Issued as reinvestment of dividends:
Class A 1,299,861 29,276,481 636,523 15,200,629
----------------------------------------------------------------------------------------------------------------------
Class B 717,979 15,980,083 332,374 7,978,341
----------------------------------------------------------------------------------------------------------------------
Class C 81,046 1,800,992 14,370 346,523
======================================================================================================================
Reacquired:
Class A (2,334,702) (64,478,900) (2,406,262) (53,197,159)
----------------------------------------------------------------------------------------------------------------------
Class B (998,532) (26,785,880) (1,070,971) (23,594,856)
----------------------------------------------------------------------------------------------------------------------
Class C (104,539) (2,783,151) (83,100) (1,787,823)
======================================================================================================================
5,000,302 $128,145,820 39,512 $ 3,079,481
______________________________________________________________________________________________________________________
======================================================================================================================
|
FS-39
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 DECEMBER 31,
--------------------------------------------------------
2000(a) 1999(a) 1998 1997 1996
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 26.08 $ 21.01 $ 19.26 $ 16.01 $ 14.59
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.33 0.38 0.48 0.47 0.55
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (1.00) 6.60 2.53 3.26 1.43
======================================================================================================================
Total from investment operations (0.67) 6.98 3.01 3.73 1.98
======================================================================================================================
Less distributions:
Dividends from net investment income (0.28) (0.35) (0.46) (0.47) (0.56)
----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.68) (1.56) (0.80) (0.01) --
======================================================================================================================
Total distributions (2.96) (1.91) (1.26) (0.48) (0.56)
======================================================================================================================
Net asset value, end of period $ 22.45 $ 26.08 $ 21.01 $ 19.26 $ 16.01
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(b) (2.54)% 34.15% 16.01% 23.70% 13.88%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $267,200 $238,432 $196,665 $179,456 $164,001
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets 1.03%(c) 1.10% 1.06% 1.13% 1.17%
----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 1.23%(c) 1.69% 2.39% 2.79% 3.62%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 52% 37% 38% 26% 48%
______________________________________________________________________________________________________________________
======================================================================================================================
|
()(a)Calculated using average shares outstanding.
()(b)Does not include sales charges.
()(c)Ratios are based on average daily net assets of $273,719,975.
CLASS B
------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------
2000(a) 1999(a) 1998 1997 1996
-------- -------- -------- ------- -------
Net asset value, beginning of period $ 26.03 $ 20.98 $ 19.24 $ 16.01 $ 14.60
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.13 0.21 0.33 0.34 0.42
--------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (1.01) 6.59 2.53 3.25 1.44
====================================================================================================================
Total from investment operations (0.88) 6.80 2.86 3.59 1.86
====================================================================================================================
Less distributions:
Dividends from net investment income (0.09) (0.19) (0.32) (0.35) (0.45)
--------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.68) (1.56) (0.80) (0.01) --
====================================================================================================================
Total distributions (2.77) (1.75) (1.12) (0.36) (0.45)
====================================================================================================================
Net asset value, end of period $ 22.38 $ 26.03 $ 20.98 $ 19.24 $ 16.01
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(b) (3.28)% 33.16% 15.14% 22.74% 12.98%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $160,820 $142,632 $111,866 $94,227 $79,530
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets 1.80%(c) 1.84% 1.81% 1.91% 1.96%
--------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 0.46%(c) 0.95% 1.64% 2.01% 2.83%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 52% 37% 38% 26% 48%
____________________________________________________________________________________________________________________
====================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $163,789,916.
FS-40
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-----------------------------------------------
AUGUST 4, 1997
(DATE SALES
YEAR ENDED DECEMBER 31, COMMENCED) TO
---------------------------- DECEMBER 31,
2000(a) 1999(a) 1998 1997
------- ------- ------ ---------------
Net asset value, beginning of period $ 26.02 $20.97 $19.24 $17.67
-------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.13 0.21 0.33 0.13
-------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (1.01) 6.59 2.52 1.58
=============================================================================================================
Total from investment operations (0.88) 6.80 2.85 1.71
=============================================================================================================
Less distributions:
Dividends from net investment income (0.09) (0.19) (0.32) (0.13)
-------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.68) (1.56) (0.80) (0.01)
=============================================================================================================
Total distributions (2.77) (1.75) (1.12) (0.14)
=============================================================================================================
Net asset value, end of period $ 22.37 $26.02 $20.97 $19.24
_____________________________________________________________________________________________________________
=============================================================================================================
Total return(b) (3.28)% 33.18% 15.09% 9.74%
_____________________________________________________________________________________________________________
=============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $17,727 $6,702 $2,994 $1,183
_____________________________________________________________________________________________________________
=============================================================================================================
Ratio of expenses to average net assets 1.80%(c) 1.84% 1.81% 1.90%(d)
-------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 0.46%(c) 0.95% 1.64% 2.02%(d)
_____________________________________________________________________________________________________________
=============================================================================================================
Portfolio turnover rate 52% 37% 38% 26%
_____________________________________________________________________________________________________________
=============================================================================================================
|
(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 $13,910,666.
(d) Annualized.
NOTE 10- CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence KPMG LLP resigned as Fund auditors on December 28, 2000. The Board
of Trustees of the Trust, upon recommendation of its Audit Committee, accepted
the resignation of KPMG LLP and appointed PricewaterhouseCoopers LLP as
independent public accountants to audit the financial statements of the Fund.
KPMG LLP had served as independent public accountants for the two years ended
December 31, 1999. The audit reports of KPMG LLP on the financial statements of
the Fund for the two years ended December 31, 1999 did not contain any adverse
opinions or disclaimer of opinions, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. In connection with the
audits for the two years ended December 31, 1999, there were no disagreements
with KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinions that might be rendered on
the Fund's financial statements.
FS-41
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM International Emerging Growth
Fund and Board of Trustees of AIM Funds Group:
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 International Emerging Growth Fund (the "Fund") at December 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the period 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-42
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2000
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY INTERESTS-87.45%
AUSTRALIA-4.13%
ERG Ltd. (Electrical Equipment) 89,700 $ 136,689
---------------------------------------------------------------
Open Telecommunications Ltd. (Computers-
Software & Services)(a) 208,700 130,624
---------------------------------------------------------------
Securenet Ltd. (Services-Computer
Systems)(a) 58,500 156,451
---------------------------------------------------------------
423,764
===============================================================
AUSTRIA-1.04%
Palfinger A.G.
(Manufacturing-Specialized) 3,600 106,488
===============================================================
BELGIUM-1.47%
Omega Pharma S.A. (Health
Care-Drugs-Generic & Other) 3,700 150,793
===============================================================
CANADA-7.18%
Descartes Systems Group Inc. (The)
(Computers-Software & Services)(a) 3,120 73,835
---------------------------------------------------------------
Exfo Electro-Optical Engineering Inc.
(Communications Equipment)(a) 4,900 128,013
---------------------------------------------------------------
Forzani Group Ltd. (The)-Class A
(Retail-Specialty-Apparel)(a) 36,400 94,634
---------------------------------------------------------------
MOSAID Technologies Inc. (Electronics-
Semiconductors)(a) 4,010 89,016
---------------------------------------------------------------
Patheon, Inc. (Health Care-Specialized
Services)(a) 9,100 90,084
---------------------------------------------------------------
Research in Motion Ltd.
(Telecommunications-
Cellular/Wireless)(a) 700 56,000
---------------------------------------------------------------
Sierra Wireless (Communications
Equipment)(a) 1,800 86,394
---------------------------------------------------------------
Tundra Semiconductor Corp. (Electronics-
Semiconductors) 4,200 118,992
===============================================================
736,968
===============================================================
CHINA-1.44%
AsiaInfo Holdings, Inc. (Telephone)(a) 15,800 148,125
===============================================================
DENMARK-1.68%
Vestas Wind Systems A.S. (Manufacturing-
Specialized) 3,180 172,166
===============================================================
FINLAND-3.08%
Amer Group Ltd. (Leisure Time-Products) 4,700 123,579
---------------------------------------------------------------
Elcoteq Network-Class A
(Manufacturing-Specialized) 3,030 95,318
---------------------------------------------------------------
Vacon Oyj (Electrical Equipment)(a) 12,500 97,426
===============================================================
316,323
===============================================================
FRANCE-16.41%
Altedia (Computers-Software &
Services)(a) 3,700 156,560
---------------------------------------------------------------
Arkopharma (Health Care-Drugs-Generic &
Other) 1,200 174,663
---------------------------------------------------------------
Beneteau (Manufacturing-Specialized) 1,300 164,803
---------------------------------------------------------------
Egide S.A. (Electronics-Component
Distributors)(a) 480 248,811
---------------------------------------------------------------
Gemplus International S.A.
(Services-Computer Systems)(a) 6,600 58,878
---------------------------------------------------------------
HighWave Optical Technologies
(Communications Equipment)(a) 600 81,641
===============================================================
FRANCE
LVL Medical S.A. (Health Care-Medical
Products & Supplies) 2,200 $ 164,240
---------------------------------------------------------------
Marionnaud Parfumeries
(Retail-Specialty)(a) 1,000 130,340
---------------------------------------------------------------
Metrologic Group (Computers-Software &
Services) 1,610 136,068
---------------------------------------------------------------
Riber S.A. (Electrical Equipment)(a) 6,050 110,784
---------------------------------------------------------------
Seche Environnement (Waste Management) 1,300 116,949
---------------------------------------------------------------
Silicon-On-Insulator Technologies
(SOITEC) (Electronics-Component
Distributors)(a) 5,755 140,510
===============================================================
1,684,247
===============================================================
GERMANY-7.27%
ADVA A.G. Optical Networking
(Communications Equipment)(a) 990 57,174
---------------------------------------------------------------
Comroad A.G. (Communications
Equipment)(a) 1,360 45,976
---------------------------------------------------------------
ELMOS Semiconductor A.G. (Electronics-
Semiconductors)(a) 1,580 37,834
---------------------------------------------------------------
Hugo Boss A.G.-Pfd
(Manufacturing-Specialized) 900 240,866
---------------------------------------------------------------
IPC Archtec A.G. (Retail-Computers &
Electronics)(a) 1,800 100,572
---------------------------------------------------------------
Tecis Holding A.G. (Investment
Management) 2,500 159,639
---------------------------------------------------------------
Umweltkontor Renewable Energy A.G.
(Engineering & Construction)(a) 2,400 104,798
===============================================================
746,859
===============================================================
HONG KONG-5.45%
Asia Satellite Telecommunications
Holdings Ltd.
(Telecommunications-Cellular/Wireless) 79,000 164,083
---------------------------------------------------------------
China Mobile Ltd.
(Telecommunications-Cellular/
Wireless)(a) 2,500 13,654
---------------------------------------------------------------
Computer & Technologies Holdings Ltd.
(Computers-Software & Services) 226,000 122,421
---------------------------------------------------------------
Denway Motors Ltd. (Auto Parts &
Equipment)(a) 924,000 161,114
---------------------------------------------------------------
SINA.com (Computers-Software &
Services)(a) 18,960 59,250
---------------------------------------------------------------
Sunevision Holdings Ltd.
(Computers-Software & Services)(a) 109,000 39,130
===============================================================
559,652
===============================================================
ISRAEL-1.07%
Orbotech, Ltd. (Computers-Software &
Services)(a) 2,955 110,258
---------------------------------------------------------------
JAPAN-2.11%
Bellsystem24, Inc. (Services-Commercial
& Consumer) 400 160,924
---------------------------------------------------------------
Softbank Corp. (Computers-Software &
Services) 1,600 55,554
===============================================================
216,478
===============================================================
NETHERLANDS-1.00%
Van der Moolen Holding N.V. (Investment
Banking/ Brokerage) 1,200 102,770
===============================================================
SINGAPORE-1.87%
Datacraft Asia Ltd. (Communications
Equipment) 33,000 155,760
---------------------------------------------------------------
|
FS-43
MARKET
SHARES VALUE
SINGAPORE (CONTINUED)
Singapore Exchange Ltd. (Services-Data
Processing)(a) 49,000 $ 36,778
===============================================================
192,538
===============================================================
SPAIN-2.27%
Grupo Auxiliar Metalurgico, S.A.
(Gamesa)
(Manufacturing-Specialized)(a) 9,700 233,185
===============================================================
SWEDEN-9.78%
Biacore International A.B. (Electronics-
Instrumentation)(a) 4,410 201,071
---------------------------------------------------------------
HiQ International A.B. (Services-Data
Processing) 17,000 126,180
---------------------------------------------------------------
Micronic Laser Systems A.B.
(Electronics-Semiconductors)(a) 6,690 197,912
---------------------------------------------------------------
POOLiA A.B.-B Shares
(Services-Employment) 3,160 152,455
---------------------------------------------------------------
Protect Data A.B. (Computers-Software &
Services)(a) 12,130 142,766
---------------------------------------------------------------
Q-Med A.B. (Health Care-Medical Products
& Supplies)(a) 9,000 183,226
===============================================================
1,003,610
===============================================================
SWITZERLAND-4.98%
Huber & Suhner A.G. (Metal Fabricators) 181 155,255
---------------------------------------------------------------
Micronas Semiconductor Holding A.G.
(Electronics-Semiconductors)(a) 292 122,170
---------------------------------------------------------------
Straumann A.G. (Health Care-Specialized
Services) 46 82,320
---------------------------------------------------------------
Tecan Group A.G. (Health Care-Medical
Products & Supplies) 146 151,451
===============================================================
511,196
===============================================================
UNITED KINGDOM-14.71%
Acal PLC (Electronics-Component
Distributors) 11,360 118,184
---------------------------------------------------------------
ARM Holdings PLC
(Electronics-Semiconductors)(a) 13,750 104,036
---------------------------------------------------------------
Chloride Group PLC (Electrical
Equipment) 48,200 117,480
---------------------------------------------------------------
CML Microsystems PLC (Electronics-
Semiconductors) 15,800 182,686
---------------------------------------------------------------
UNITED KINGDOM
easyJet PLC (Airlines)(a) 10,300 $ 60,644
---------------------------------------------------------------
First Technology PLC (Auto Parts &
Equipment) 15,140 119,080
---------------------------------------------------------------
Genetix Group PLC (Health Care-Medical
Products & Supplies)(a) 56,100 203,844
---------------------------------------------------------------
HIT Entertainment PLC
(Broadcasting-Television, Radio &
Cable) 18,800 112,868
---------------------------------------------------------------
Horizon Technology Group PLC (Computers-
Software & Services)(a) 15,900 100,037
---------------------------------------------------------------
John David Sports PLC
(Retail-Specialty-Apparel)(a) 29,200 113,523
---------------------------------------------------------------
NDS Group PLC-ADR
(Broadcasting-Television, Radio &
Cable)(a) 1,070 58,449
---------------------------------------------------------------
NSB Retail Systems PLC
(Computers-Software & Services) 18,500 46,751
---------------------------------------------------------------
Volex Group PLC (Electrical Equipment) 5,930 172,909
===============================================================
1,510,491
===============================================================
UNITED STATES OF AMERICA-0.51%
Siebel Systems, Inc. (Computers-Software
& Services)(a) 770 52,071
---------------------------------------------------------------
Total Foreign Stocks & Other Equity
Interests
(Cost $9,735,235) 8,977,982
===============================================================
PRINCIPAL
AMOUNT
MONEY MARKET FUNDS-10.89%
STIC Liquid Assets Portfolio(b) 558,849 558,849
---------------------------------------------------------------
STIC Prime Portfolio(b) 558,849 558,849
===============================================================
Total Money Market Funds
(Cost $1,117,698) 1,117,698
===============================================================
TOTAL INVESTMENTS-98.34%
(Cost $10,852,933) 10,095,680
===============================================================
OTHER ASSETS LESS LIABILITIES-1.66% 170,718
===============================================================
NET ASSETS-100.00% $10,266,398
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt Pfd - Preferred |
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
DECEMBER 31, 2000
ASSETS:
Investments, at market value (cost $10,852,933) $10,095,680
--------------------------------------------------------------
Foreign currencies, at value (cost $198,220) 201,356
--------------------------------------------------------------
Receivables for:
Investments sold 7,780
--------------------------------------------------------------
Fund shares sold 165,752
--------------------------------------------------------------
Dividends 7,249
--------------------------------------------------------------
Investment for deferred compensation plan 2,546
--------------------------------------------------------------
Due from advisor 12,224
--------------------------------------------------------------
Other assets 59,279
==============================================================
Total assets 10,551,866
==============================================================
LIABILITIES:
Payables for:
Investments purchased 214,594
--------------------------------------------------------------
Fund shares reacquired 23,746
--------------------------------------------------------------
Deferred compensation plan 2,546
--------------------------------------------------------------
Accrued administrative services fees 4,235
--------------------------------------------------------------
Accrued custodian fees 5,026
--------------------------------------------------------------
Accrued distribution fees 7,742
--------------------------------------------------------------
Accrued printing fees 6,838
--------------------------------------------------------------
Accrued professional fees 16,307
--------------------------------------------------------------
Accrued trustees' fees 156
--------------------------------------------------------------
Accrued transfer agent fees 1,955
--------------------------------------------------------------
Accrued operating expenses 2,323
==============================================================
Total liabilities 285,468
==============================================================
Net assets applicable to shares outstanding $10,266,398
______________________________________________________________
==============================================================
NET ASSETS:
Class A $5,625,367
______________________________________________________________
==============================================================
Class B $1,992,095
______________________________________________________________
==============================================================
Class C $2,648,936
______________________________________________________________
==============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 706,144
______________________________________________________________
==============================================================
Class B 250,695
______________________________________________________________
==============================================================
Class C 333,146
______________________________________________________________
==============================================================
Class A:
Net asset value and redemption price per share $ 7.97
--------------------------------------------------------------
Offering price per share:
(Net asset value of $7.97 DIVIDED BY 94.50%) $ 8.43
______________________________________________________________
==============================================================
Class B:
Net asset value and offering price per share $ 7.95
______________________________________________________________
==============================================================
Class C:
Net asset value and offering price per share $ 7.95
______________________________________________________________
==============================================================
|
STATEMENT OF OPERATIONS
FOR THE PERIOD AUGUST 31, 2000 (DATE OPERATIONS COMMENCED) THROUGH
DECEMBER 31, 2000
INVESTMENT INCOME:
Dividends from affiliated money market funds $ 11,787
--------------------------------------------------------------
Dividends (net of foreign withholding tax of $200) 1,950
--------------------------------------------------------------
Interest 6,096
--------------------------------------------------------------
Total investment income 19,833
==============================================================
EXPENSES:
Advisory fees 20,500
--------------------------------------------------------------
Administrative services fees 16,667
--------------------------------------------------------------
Custodian fees 30,863
--------------------------------------------------------------
Distribution fees--Class A 4,291
--------------------------------------------------------------
Distribution fees--Class B 4,682
--------------------------------------------------------------
Distribution fees--Class C 4,636
--------------------------------------------------------------
Transfer agent fees--Class A 3,341
--------------------------------------------------------------
Transfer agent fees--Class B 1,524
--------------------------------------------------------------
Transfer agent fees--Class C 1,509
--------------------------------------------------------------
Trustees' fees 3,240
--------------------------------------------------------------
Registration and filing fees 31,319
--------------------------------------------------------------
Printing 8,955
--------------------------------------------------------------
Professional fees 19,536
--------------------------------------------------------------
Other 2,772
==============================================================
Total expenses 153,835
==============================================================
Less: Fees waived and expenses reimbursed (101,909)
--------------------------------------------------------------
Expenses paid indirectly (2,144)
==============================================================
Net expenses 49,782
==============================================================
Net investment income (loss) (29,949)
==============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) from:
Investment securities (516,537)
--------------------------------------------------------------
Foreign currencies 16,081
==============================================================
(500,456)
==============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (757,253)
--------------------------------------------------------------
Foreign currencies (2,052)
--------------------------------------------------------------
(759,305)
==============================================================
Net gain (loss) from investment securities and
foreign currencies (1,259,761)
==============================================================
Net increase (decrease) in net assets resulting
from operations $(1,289,710)
______________________________________________________________
==============================================================
|
See Notes to Financial Statements.
FS-45
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD AUGUST 31, 2000 (DATE OPERATIONS COMMENCED) THROUGH DECEMBER 31,
2000
2000
-----------
OPERATIONS:
Net investment income (loss) $ (29,949)
---------------------------------------------------------------
Net realized gain (loss) from investment
securities and foreign currencies (500,456)
---------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities and
foreign currencies (759,305)
===============================================================
Net increase (decrease) in net assets resulting
from operations (1,289,710)
===============================================================
Share transactions-net:
Class A 6,385,964
---------------------------------------------------------------
Class B 2,274,262
---------------------------------------------------------------
Class C 2,895,882
===============================================================
Net increase in net assets 10,266,398
===============================================================
NET ASSETS:
Beginning of period --
===============================================================
End of period $10,266,398
_______________________________________________________________
===============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $11,550,792
---------------------------------------------------------------
Undistributed net investment income (loss) (8,552)
---------------------------------------------------------------
Undistributed net realized gain (loss) from
investment securities and foreign currencies (516,537)
---------------------------------------------------------------
Unrealized appreciation (depreciation) of
investment securities and foreign currencies (759,305)
===============================================================
$10,266,398
_______________________________________________________________
===============================================================
|
See Notes to Financial Statements.
FS-46
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM International Emerging Growth Fund (the "Fund") is a series portfolio of AIM
Funds Group (the "Trust"). The Trust is a Delaware business trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series management investment company consisting of ten separate
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund commenced operations on August 31, 2000. The Fund currently offers
three different classes of shares: Class A shares, Class B shares and Class C
shares. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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 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 December 31, 2000, undistributed net investment income was increased by $21,397, undistributed net realized gains decreased by $16,081, and paid-in capital decreased by $5,316 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 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 $161,713 as of December 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
FS-47
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 and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.95% of the Fund's
average daily net assets. For the period August 31, 2000 (date operations
commenced) through December 31, 2000, AIM waived fees of $20,500 and reimbursed
expenses of $81,409.
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 period August 31, 2000 (date operations
commenced) through December 31, 2000, AIM was paid $16,667 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 period August 31, 2000 (date
operations commenced) through December 31, 2000, AFS was paid $2,994 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
0.35% of the Funds 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 period August 31, 2000 (date
operations commenced) through December 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $4,291, $4,682 and $4,636, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $8,538 from sales of the Class A
shares of the Fund during the period August 31, 2000 (date operations commenced)
through December 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 same period, AIM Distributors received $364 in contingent
deferred sales charges imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of
AIM, AFS and AIM Distributors.
During the period August 31, 2000 (date operations commenced) through
December 31, 2000, the Fund paid legal fees of $976 for services rendered by
Kramer, Levin, Naftalis & Frankel LLP as counsel to the Board of Trustees. A
member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the period August 31, 2000 (date operations commenced) through December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $49 and reductions in custodian fees of $2,095 under expense offset arrangements which resulted in a reduction of the Funds total expenses of $2,144.
NOTE 4-TRUSTEES FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the period August 31, 2000
through December 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.
FS-48
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the period August 31, 2000 through
December 31, 2000 was $11,781,786 and $1,530,013, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 581,265 -------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (1,382,689) ============================================================== Net unrealized appreciation (depreciation) of investment securities $ (801,424) ______________________________________________________________ ============================================================== Cost of investments for tax purposes is $10,897,104. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the period August 31, 2000 (date operations commenced) and December 31, 2000 were as follows:
2000
----------------------
SHARES AMOUNT
--------- -----------
Sold:
Class A 745,389 $ 6,717,335
----------------------------------------------------------------
Class B 271,186 2,438,175
----------------------------------------------------------------
Class C 339,960 2,953,136
================================================================
Reacquired:
Class A (39,245) (331,371)
----------------------------------------------------------------
Class B (20,491) (163,913)
----------------------------------------------------------------
Class C (6,814) (57,254)
================================================================
1,289,985 $11,556,108
________________________________________________________________
================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the period indicated.
CLASS A
---------------------
AUGUST 31, 2000
(DATE OPERATIONS
COMMENCED)
TO
DECEMBER 31, 2000(a)
---------------------
Net asset value, beginning of period $10.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.03)
-------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (2.00)
=========================================================================
Total from investment operations (2.03)
=========================================================================
Net asset value, end of period $ 7.97
_________________________________________________________________________
=========================================================================
Total return(b) (20.30)%
_________________________________________________________________________
=========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $5,625
_________________________________________________________________________
=========================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.11 %(c)
-------------------------------------------------------------------------
Without fee waivers and expense reimbursements 6.83 %(c)
=========================================================================
Ratio of net investment income (loss) to average
net assets (1.09)%(c)
_________________________________________________________________________
=========================================================================
Portfolio turnover rate 30 %
_________________________________________________________________________
=========================================================================
|
(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 net assets of $3,648,357.
FS-49
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------------
AUGUST 31, 2000
(DATE OPERATIONS
COMMENCED)
TO
DECEMBER 31, 2000(A)
---------------------
Net asset value, beginning of period $10.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.05)
-------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (2.00)
=========================================================================
Total from investment operations (2.05)
=========================================================================
Net asset value, end of period $ 7.95
_________________________________________________________________________
=========================================================================
Total return(b) (20.50)%
_________________________________________________________________________
=========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $1,992
_________________________________________________________________________
=========================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.81 %(c)
-------------------------------------------------------------------------
Without fee waivers and expense reimbursements 7.53 %(c)
=========================================================================
Ratio of net investment income (loss) to average
net assets (1.79)%(c)
_________________________________________________________________________
=========================================================================
Portfolio turnover rate 30 %
_________________________________________________________________________
=========================================================================
|
(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 net assets of $1,393,313.
CLASS C
---------------------
AUGUST 31, 2000
(DATE OPERATIONS
COMMENCED)
TO
DECEMBER 31, 2000(A)
---------------------
Net asset value, beginning of period $10.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.05)
-------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (2.00)
=========================================================================
Total from investment operations (2.05)
=========================================================================
Net asset value, end of period $ 7.95
_________________________________________________________________________
=========================================================================
Total return(b) (20.50)%
_________________________________________________________________________
=========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $2,649
_________________________________________________________________________
=========================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.81 %(c)
-------------------------------------------------------------------------
Without fee waivers and expense reimbursements 7.53 %(c)
=========================================================================
Ratio of net investment income (loss) to average
net assets (1.79)%(c)
_________________________________________________________________________
=========================================================================
Portfolio turnover rate 30 %
_________________________________________________________________________
=========================================================================
|
(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 net assets of $1,379,510.
FS-50
NOTE 9-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP has
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence KPMG LLP resigned as Fund auditors on December 28, 2000 prior to
the first fiscal period end of the Fund. The Board of Trustees of the Trust,
upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP
and appointed PricewaterhouseCoopers LLP as independent public accountants to
audit the financial statements of the Fund. There were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinions that might be rendered on
the Funds financial statements.
FS-51
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of AIM Funds
Group of AIM New Technology Fund:
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 New Technology Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-52
SCHEDULE OF INVESTMENTS
December 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS-88.29%
BIOTECHNOLOGY-11.53%
Celgene Corp.(a) 39,400 $ 1,280,500
--------------------------------------------------------------------
Cephalon, Inc.(a) 17,300 1,095,306
--------------------------------------------------------------------
Ciphergen Biosystems, Inc.(a) 29,000 384,250
--------------------------------------------------------------------
COR Therapeutics, Inc.(a) 20,500 721,344
--------------------------------------------------------------------
Human Genome Sciences, Inc.(a) 12,000 831,750
--------------------------------------------------------------------
IDEC Pharmaceuticals Corp.(a) 8,900 1,687,106
--------------------------------------------------------------------
Incyte Genomics, Inc.(a) 29,000 721,375
--------------------------------------------------------------------
Invitrogen Corp.(a) 12,500 1,079,687
--------------------------------------------------------------------
Lexicon Genetics Inc.(a) 25,400 422,275
--------------------------------------------------------------------
Millennium Pharmaceuticals, Inc.(a) 7,600 470,250
====================================================================
8,693,843
====================================================================
COMMUNICATIONS EQUIPMENT-7.82%
CIENA Corp.(a) 12,100 984,637
--------------------------------------------------------------------
Comverse Technology, Inc.(a) 11,800 1,281,775
--------------------------------------------------------------------
Corning Inc. 20,900 1,103,781
--------------------------------------------------------------------
Digital Lightwave, Inc.(a) 25,000 792,187
--------------------------------------------------------------------
Finisar Corp.(a) 49,100 1,423,900
--------------------------------------------------------------------
UTStarcom, Inc.(a) 20,000 310,000
====================================================================
5,896,280
====================================================================
COMPUTERS (HARDWARE)-3.59%
Handspring, Inc.(a) 30,200 1,175,913
--------------------------------------------------------------------
Palm, Inc.(a) 54,000 1,528,875
====================================================================
2,704,788
====================================================================
COMPUTERS (NETWORKING)-8.05%
Emulex Corp.(a) 34,700 2,773,831
--------------------------------------------------------------------
Juniper Networks, Inc.(a) 19,300 2,433,006
--------------------------------------------------------------------
VeriSign, Inc.(a) 11,600 860,575
====================================================================
6,067,412
====================================================================
COMPUTERS (PERIPHERALS)-5.32%
Brocade Communications Systems, Inc.(a) 24,900 2,286,131
--------------------------------------------------------------------
Network Appliance, Inc.(a) 26,800 1,721,481
====================================================================
4,007,612
====================================================================
COMPUTERS (SOFTWARE & SERVICES)-20.38%
Agile Software Corp.(a) 37,550 1,854,031
--------------------------------------------------------------------
Ariba, Inc.(a) 12,900 693,375
--------------------------------------------------------------------
BEA Systems, Inc.(a) 29,400 1,978,988
--------------------------------------------------------------------
Check Point Software Technologies Ltd.
(Israel)(a) 16,600 2,217,138
--------------------------------------------------------------------
Interwoven, Inc.(a) 10,700 705,531
--------------------------------------------------------------------
i2 Technologies, Inc.(a) 38,200 2,077,125
--------------------------------------------------------------------
Macrovision Corp.(a) 17,200 1,273,069
--------------------------------------------------------------------
|
MARKET
SHARES VALUE
Siebel Systems, Inc.(a) 21,500 $ 1,453,938
--------------------------------------------------------------------
VERITAS Software Corp.(a) 25,600 2,240,000
--------------------------------------------------------------------
Websense, Inc.(a) 60,000 870,000
====================================================================
15,363,195
====================================================================
ELECTRONICS (DEFENSE)-1.92%
Anaren Microwave, Inc.(a) 21,500 1,444,531
====================================================================
ELECTRONICS (INSTRUMENTATION)-3.21%
Alpha Industries, Inc.(a) 26,500 980,500
--------------------------------------------------------------------
Newport Corp. 8,000 628,875
--------------------------------------------------------------------
Waters Corp.(a) 9,700 809,950
====================================================================
2,419,325
====================================================================
ELECTRONICS (SEMICONDUCTORS)-9.99%
Applied Micro Circuits Corp.(a) 26,800 2,011,256
--------------------------------------------------------------------
Elantec Semiconductor, Inc.(a) 10,000 277,500
--------------------------------------------------------------------
Exar Corp.(a) 24,500 759,117
--------------------------------------------------------------------
SDL, Inc.(a) 10,300 1,526,331
--------------------------------------------------------------------
TranSwitch Corp.(a) 20,300 794,238
--------------------------------------------------------------------
Triquint Semiconductor, Inc.(a) 49,400 2,158,163
====================================================================
7,526,605
====================================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-2.06%
Gilead Sciences, Inc.(a) 11,500 953,781
--------------------------------------------------------------------
Sepracor Inc.(a) 7,500 600,938
====================================================================
1,554,719
====================================================================
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-4.56%
Applera Corp.-Applied Biosystems Group 16,900 1,589,656
--------------------------------------------------------------------
Biosite Diagnostics Inc.(a) 19,300 780,444
--------------------------------------------------------------------
Cytyc Corp.(a) 5,400 337,838
--------------------------------------------------------------------
Molecular Devices Corp.(a) 10,700 732,281
====================================================================
3,440,219
====================================================================
SERVICES (ADVERTISING/MARKETING)-1.57%
TMP Worldwide, Inc.(a) 21,500 1,182,500
====================================================================
SERVICES (DATA PROCESSING)-3.59%
CheckFree Corp.(a) 26,800 1,139,000
--------------------------------------------------------------------
Paychex, Inc. 32,200 1,565,725
====================================================================
2,704,725
====================================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-4.70%
Amdocs Ltd. (United Kingdom)(a) 24,450 1,619,813
--------------------------------------------------------------------
Powerwave Technologies, Inc.(a) 32,900 1,924,650
====================================================================
3,544,463
====================================================================
Total Common Stocks
(Cost $77,001,069) 66,550,217
====================================================================
|
FS-53
PRINCIPAL MARKET
AMOUNT VALUE
MONEY MARKET FUNDS-16.95%
MUTUAL FUNDS-16.95%
STIC Liquid Assets Portfolio(b) $ 6,387,287 $ 6,387,287
--------------------------------------------------------------------
STIC Prime Portfolio(b) 6,387,287 6,387,287
====================================================================
Total Money Market Funds
(Cost $12,774,574) 12,774,574
====================================================================
TOTAL INVESTMENTS-105.24%
(Cost $89,775,643) 79,324,791
====================================================================
LIABILITIES LESS OTHER ASSETS-(5.24%) (3,948,414)
====================================================================
NET ASSETS-100.00% $ 75,376,377
____________________________________________________________________
====================================================================
|
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-54
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost $89,775,643) $79,324,791
--------------------------------------------------------------
Cash 184,601
--------------------------------------------------------------
Receivables for:
Investments sold 71,880
--------------------------------------------------------------
Fund shares sold 1,954,667
--------------------------------------------------------------
Dividends 66,587
--------------------------------------------------------------
Investment for deferred compensation plan 2,550
--------------------------------------------------------------
Other assets 115,995
==============================================================
Total assets $81,721,071
==============================================================
LIABILITIES:
Payables for:
Investments purchased 5,327,189
--------------------------------------------------------------
Fund shares reacquired 812,506
--------------------------------------------------------------
Deferred compensation plan 2,550
--------------------------------------------------------------
Accrued advisory fees 61,452
--------------------------------------------------------------
Accrued administrative services fees 4,235
--------------------------------------------------------------
Accrued distribution fees 63,130
--------------------------------------------------------------
Accrued transfer agent fees 23,862
--------------------------------------------------------------
Accrued operating expenses 49,770
==============================================================
Total liabilities 6,344,694
==============================================================
Net assets applicable to shares outstanding $75,376,377
==============================================================
NET ASSETS:
Class A $43,731,669
==============================================================
Class B $21,295,506
==============================================================
Class C $10,349,202
==============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 6,485,636
==============================================================
Class B 3,166,874
==============================================================
Class C 1,538,259
==============================================================
Class A:
Net asset value and redemption price per share $ 6.74
==============================================================
Offering price per share:
(Net asset value of $6.74 divided by 94.50%) $ 7.13
==============================================================
Class B:
Net asset value and offering price per share $ 6.72
==============================================================
Class C:
Net asset value and offering price per share $ 6.73
==============================================================
|
STATEMENT OF OPERATIONS
For the period August 31, 2000 (date operations commenced) through
December 31, 2000
INVESTMENT INCOME:
Dividends $ 1,689
---------------------------------------------------------------
Dividends from affiliated money market funds 132,348
---------------------------------------------------------------
Interest 43,519
===============================================================
Total investment income 177,556
===============================================================
EXPENSES:
Advisory fees 169,735
---------------------------------------------------------------
Administrative services fees 16,667
---------------------------------------------------------------
Custodian fees 10,983
---------------------------------------------------------------
Distribution fees -- Class A 35,318
---------------------------------------------------------------
Distribution fees -- Class B 43,533
---------------------------------------------------------------
Distribution fees -- Class C 25,294
---------------------------------------------------------------
Transfer agent fees -- Class A 33,834
---------------------------------------------------------------
Transfer agent fees -- Class B 16,389
---------------------------------------------------------------
Transfer agent fees -- Class C 9,523
---------------------------------------------------------------
Trustees' fees 3,118
---------------------------------------------------------------
Registration and filing fees 70,653
---------------------------------------------------------------
Other 31,763
===============================================================
Total expenses 466,810
===============================================================
Less: Fees waived (126,575)
===============================================================
Expenses paid indirectly (2,481)
===============================================================
Net expenses 337,754
===============================================================
Net investment income (loss) (160,198)
===============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES
Net realized gain (loss) from investment
securities (11,533,886)
===============================================================
Change in net unrealized appreciation
(depreciation) of investment securities (10,450,852)
---------------------------------------------------------------
Net gain (loss) from investment securities (21,984,738)
===============================================================
Net increase (decrease) in net assets resulting
from operations $(22,144,936)
_______________________________________________________________
===============================================================
|
See Notes to Financial Statements.
FS-55
STATEMENT OF CHANGES IN NET ASSETS
For the period August 31, 2000 (date operations commenced) through December 31,
2000
2000
------------
OPERATIONS:
Net investment income (loss) $ (160,198)
----------------------------------------------------------------
Net realized gain (loss) from investment
securities (11,533,886)
----------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (10,450,852)
----------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (22,144,936)
================================================================
Share transactions--net:
Class A 56,708,694
----------------------------------------------------------------
Class B 27,020,002
----------------------------------------------------------------
Class C 13,792,617
----------------------------------------------------------------
Net increase in net assets 75,376,377
================================================================
NET ASSETS:
Beginning of period 0
================================================================
End of period $ 75,376,377
________________________________________________________________
================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 97,390,471
----------------------------------------------------------------
Undistributed net investment income (loss) (29,356)
----------------------------------------------------------------
Undistributed net realized gain (loss) from
investment securities (11,533,886)
----------------------------------------------------------------
Unrealized appreciation (depreciation) of
investment securities (10,450,852)
================================================================
$ 75,376,377
________________________________________________________________
================================================================
|
See Notes to Financial Statements.
FS-56
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM New Technology Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund commenced
operations on August 31, 2000. The Fund currently offers three different classes
of shares: Class A shares, Class B shares and Class C shares. Class A shares are
sold with a front-end sales charge. Class B shares and Class C shares are sold
with a contingent deferred sales charge. Matters affecting each portfolio or
class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is to achieve 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.
On December 31, 2000, undistributed net investment income was increased by
$130,842 and paid-in capital decreased by $130,842 as a result of 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. The Fund has a capital loss carryforward of $1,713,194 as of December 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. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to AIM at the annual rate of 1.00% of the Fund's average daily net assets. During
FS-57
the period August 31, 2000 (date operation commenced) through December 31, 2000,
AIM waived fees of $126,575.
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 period August 31, 2000 (date operations
commenced) through December 31, 2000 AIM was paid $16,667 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 period August 31, 2000 (date
operations commenced) through December 31, 2000 AFS was paid $25,273 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
0.35% 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 period August 31, 2000 (date
operations commenced) through December 31, 2000 the Class A, Class B and Class C
shares paid AIM Distributors $35,318, $43,533 and $25,294, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $142,151 from sales of the Class A
shares of the Fund for the period August 31, 2000 (date operations commenced)
through December 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. For the same period, AIM Distributors received $16,403 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.
For the period August 31, 2000 (date operations commenced) through December
31, 2000, the Fund paid legal fees of $980 for services rendered by Kramer,
Levin, Naftalis & Frankel LLP as counsel to the Board of Trustees. A member of
that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the period August 31, 2000 (date operations commenced) through December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $386 and reductions in custodian fees of $2,095 under expense offset arrangements which resulted in a reduction of the Funds total expenses of $2,481.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. For the period August 31, 2000
through December 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.
FS-58
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund for the period August 31, 2000 through December
31, 2000 was $110,127,765 and $21,592,810, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 2,235,613 --------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (14,035,450) =============================================================== Net unrealized appreciation (depreciation) of investment securities $(11,799,837) _______________________________________________________________ =============================================================== |
Cost of investments for tax purposes is $91,124,628.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding for the period August 31, 2000 (date operations commenced) through December 31, 2000 were as follows:
2000
-----------------------
SHARES AMOUNT
---------- -----------
Sold:
Class A 7,406,952 $63,371,172
-----------------------------------------------------------------
Class B 3,305,594 28,031,799
-----------------------------------------------------------------
Class C 1,784,951 15,613,560
=================================================================
Reacquired:
Class A (921,316) (6,662,478)
-----------------------------------------------------------------
Class B (138,720) (1,011,797)
-----------------------------------------------------------------
Class C (246,692) (1,820,943)
=================================================================
11,190,769 $97,521,313
_________________________________________________________________
=================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the period indicated.
CLASS A
-----------------------------------
AUGUST 31, 2000 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 2000(a)
-----------------------------------
Net asset value, beginning of period $ 10.00
---------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (0.02)
---------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (3.24)
=======================================================================================
Total from investment operations (3.26)
=======================================================================================
Net asset value, end of period $ 6.74
_______________________________________________________________________________________
=======================================================================================
Total return(b) (32.60)%
_______________________________________________________________________________________
=======================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $43,732
_______________________________________________________________________________________
=======================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.72%(c)
---------------------------------------------------------------------------------------
Without fee waivers 2.47%(c)
_______________________________________________________________________________________
=======================================================================================
Ratio of net investment income (loss) to average
net assets (0.66)%(c)
_______________________________________________________________________________________
=======================================================================================
Portfolio turnover rate 54%
_______________________________________________________________________________________
=======================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charge and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of $30,026,225.
FS-59
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
-----------------------------------
AUGUST 31, 2000 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 2000(a)
-----------------------------------
Net asset value, beginning of period $ 10.00
---------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04)
---------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (3.24)
=======================================================================================
Total from investment operations (3.28)
=======================================================================================
Net asset value, end of period $ 6.72
_______________________________________________________________________________________
=======================================================================================
Total return(b) (32.80)%
_______________________________________________________________________________________
=======================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $21,296
_______________________________________________________________________________________
=======================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.41%(c)
---------------------------------------------------------------------------------------
Without fee waivers 3.16%(c)
_______________________________________________________________________________________
=======================================================================================
Ratio of net investment income (loss) to average
net assets (1.36)%(c)
_______________________________________________________________________________________
=======================================================================================
Portfolio turnover rate 54%
_______________________________________________________________________________________
=======================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charge and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $12,953,782.
CLASS C
-----------------------------------
AUGUST 31, 2000 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 2000(a)
-----------------------------------
Net asset value, beginning of period $ 10.00
---------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04)
---------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (3.23)
=======================================================================================
Total from investment operations (3.27)
=======================================================================================
Net asset value, end of period $ 6.73
_______________________________________________________________________________________
=======================================================================================
Total return(b) (32.70)%
_______________________________________________________________________________________
=======================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $10,349
_______________________________________________________________________________________
=======================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.41%(c)
---------------------------------------------------------------------------------------
Without fee waivers 3.16%(c)
_______________________________________________________________________________________
=======================================================================================
Ratio of net investment income (loss) to average
net assets (1.35)%(c)
_______________________________________________________________________________________
=======================================================================================
Portfolio turnover rate 54%
_______________________________________________________________________________________
=======================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charge and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $7,526,683.
FS-60
NOTE 9-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP has
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence, KPMG LLP resigned as Fund auditors on December 28, 2000 prior to
the first fiscal period end of the Fund. The Board of Trustees of the Trust,
upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP
and appointed PricewaterhouseCoopers LLP as independent public accountants to
audit the financial statements of the Fund. There were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinions that might be rendered on
the Funds financial statements.
FS-61
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Select Growth Fund
and Board of Trustees of AIM Funds Group:
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 Select Growth Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statements of changes in net assets of the Fund for the year ended December 31, 1999 and the financial highlights for each of the periods ended on or before December 31, 1999 were audited by other independent accountants whose report dated February 14, 2000 expressed an unqualified opinion thereon.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-62
SCHEDULE OF INVESTMENTS
December 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-94.43%
BIOTECHNOLOGY-1.31%
Amgen Inc.(a) 120,000 $ 7,672,500
---------------------------------------------------------------
Celgene Corp.(a) 272,000 8,840,000
===============================================================
16,512,500
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.52%
Univision Communications
Inc.-Class A(a) 162,000 6,631,875
===============================================================
COMMUNICATIONS EQUIPMENT-4.84%
Comverse Technology, Inc.(a) 429,900 46,697,887
---------------------------------------------------------------
Finisar Corp.(a) 49,200 1,426,800
---------------------------------------------------------------
JDS Uniphase Corp.(a) 62,800 2,617,975
---------------------------------------------------------------
Redback Networks Inc.(a) 66,000 2,706,000
---------------------------------------------------------------
UTStarcom, Inc.(a) 500,000 7,750,000
===============================================================
61,198,662
===============================================================
COMPUTERS (HARDWARE)-2.16%
National Instruments Corp.(a) 165,000 8,012,812
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 624,000 17,394,000
---------------------------------------------------------------
Sycamore Networks, Inc.(a) 52,200 1,944,450
===============================================================
27,351,262
===============================================================
COMPUTERS (NETWORKING)-3.19%
Cisco Systems, Inc.(a) 288,000 11,016,000
---------------------------------------------------------------
Extreme Networks, Inc.(a) 262,000 10,250,750
---------------------------------------------------------------
Juniper Networks, Inc.(a) 129,600 16,337,700
---------------------------------------------------------------
VeriSign, Inc.(a) 38,000 2,819,125
===============================================================
40,423,575
===============================================================
COMPUTERS (PERIPHERALS)-5.65%
Brocade Communications Systems,
Inc.(a) 232,000 21,300,500
---------------------------------------------------------------
EMC Corp.(a) 636,280 42,312,620
---------------------------------------------------------------
QLogic Corp.(a) 103,000 7,931,000
===============================================================
71,544,120
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-12.84%
America Online, Inc.(a) 162,000 5,637,600
---------------------------------------------------------------
Ariba, Inc.(a) 110,000 5,912,500
---------------------------------------------------------------
BEA Systems, Inc.(a) 484,100 32,585,981
---------------------------------------------------------------
BMC Software, Inc.(a) 325,000 4,550,000
---------------------------------------------------------------
Check Point Software Technologies
Ltd. (Israel)(a) 160,000 21,370,000
---------------------------------------------------------------
i2 Technologies, Inc.(a) 170,000 9,243,750
---------------------------------------------------------------
Oracle Corp.(a) 864,000 25,110,000
---------------------------------------------------------------
PeopleSoft, Inc.(a) 163,000 6,061,562
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Peregrine Systems, Inc.(a) 273,800 $ 5,407,550
---------------------------------------------------------------
Retek Inc.(a) 320,000 7,800,000
---------------------------------------------------------------
Secure Computing Corp.(a) 606,100 5,985,237
---------------------------------------------------------------
Siebel Systems, Inc.(a) 148,000 10,008,500
---------------------------------------------------------------
VERITAS Software Corp.(a) 260,950 22,833,125
===============================================================
162,505,805
===============================================================
DISTRIBUTORS (FOOD &
HEALTH)-1.52%
AmeriSource Health Corp.-Class
A(a) 125,000 6,312,500
---------------------------------------------------------------
McKesson HBOC, Inc. 360,000 12,920,400
===============================================================
19,232,900
===============================================================
ELECTRIC COMPANIES-0.99%
PG&E Corp. 390,000 7,800,000
---------------------------------------------------------------
TXU Corp. 107,000 4,741,437
===============================================================
12,541,437
===============================================================
ELECTRICAL EQUIPMENT-2.85%
General Electric Co. 270,000 12,943,125
---------------------------------------------------------------
Koninklijke (Royal) Philips
Electronics N.V.- ADR
(Netherlands) 167,207 6,061,254
---------------------------------------------------------------
Sanmina Corp.(a) 174,400 13,363,400
---------------------------------------------------------------
Viasystems Group, Inc.(a) 450,000 3,740,625
===============================================================
36,108,404
===============================================================
ELECTRONICS
(INSTRUMENTATION)-2.45%
Tektronix, Inc. 512,000 17,248,000
---------------------------------------------------------------
Waters Corp.(a) 164,000 13,694,000
===============================================================
30,942,000
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-4.67%
Altera Corp.(a) 561,600 14,777,100
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 132,000 9,906,187
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 190,000 10,307,500
---------------------------------------------------------------
Linear Technology Corp. 177,600 8,214,000
---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 140,000 6,693,750
---------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 93,200 7,327,850
---------------------------------------------------------------
Zoran Corp.(a) 117,000 1,813,500
===============================================================
59,039,887
===============================================================
ENGINEERING & CONSTRUCTION-1.48%
Quanta Services, Inc.(a) 582,500 18,749,219
===============================================================
ENTERTAINMENT-0.85%
Time Warner Inc. 205,000 10,709,200
===============================================================
FINANCIAL (DIVERSIFIED)-5.63%
American Express Co. 248,300 13,640,981
---------------------------------------------------------------
Citigroup Inc. 591,500 30,203,469
---------------------------------------------------------------
|
FS-63
MARKET
SHARES VALUE
FINANCIAL (DIVERSIFIED)-(CONTINUED)
Freddie Mac 226,860 $ 15,624,983
---------------------------------------------------------------
MGIC Investment Corp. 174,300 11,754,356
===============================================================
71,223,789
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-3.42%
Forest Laboratories, Inc.(a) 105,200 13,978,450
---------------------------------------------------------------
Genentech, Inc.(a) 86,000 7,009,000
---------------------------------------------------------------
Gilead Sciences, Inc.(a) 106,000 8,791,375
---------------------------------------------------------------
ICN Pharmaceuticals, Inc. 215,000 6,597,813
---------------------------------------------------------------
Medicis Pharmaceutical
Corp.-Class A(a) 117,000 6,917,625
===============================================================
43,294,263
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-3.98%
Allergan, Inc. 88,000 8,519,500
---------------------------------------------------------------
Pfizer Inc. 736,200 33,865,200
---------------------------------------------------------------
Pharmacia Corp. 131,000 7,991,000
===============================================================
50,375,700
===============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-3.57%
Health Management Associates,
Inc.- Class A(a) 690,000 14,317,500
---------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 360,000 18,045,000
---------------------------------------------------------------
Tenet Healthcare Corp.(a) 150,000 6,665,625
---------------------------------------------------------------
Triad Hospitals, Inc.(a) 190,000 6,186,875
===============================================================
45,215,000
===============================================================
HEALTH CARE (MANAGED CARE)-1.55%
CIGNA Corp. 47,300 6,257,790
---------------------------------------------------------------
UnitedHealth Group Inc. 218,200 13,392,025
===============================================================
19,649,815
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-4.40%
Applera Corp.-Applied Biosystems
Group 120,000 11,287,500
---------------------------------------------------------------
Beckman Coulter, Inc. 104,000 4,361,500
---------------------------------------------------------------
Biomet, Inc. 180,900 7,179,469
---------------------------------------------------------------
Edwards Lifesciences Corp.(a) 440,000 7,810,000
---------------------------------------------------------------
Medtronic, Inc. 300,000 18,112,500
---------------------------------------------------------------
Syncor International Corp.(a) 190,000 6,911,250
===============================================================
55,662,219
===============================================================
HEALTH CARE (SPECIALIZED
SERVICES)-1.14%
Alza Corp.(a) 180,000 7,650,000
---------------------------------------------------------------
Quest Diagnostics Inc.(a) 47,500 6,745,000
===============================================================
14,395,000
===============================================================
INSURANCE (MULTI-LINE)-0.60%
American International Group,
Inc. 77,000 7,589,313
===============================================================
|
MARKET
SHARES VALUE
INSURANCE
(PROPERTY-CASUALTY)-1.77%
Radian Group Inc. 182,000 $ 13,661,375
---------------------------------------------------------------
XL Capital Ltd.-Class A 100,000 8,737,500
===============================================================
22,398,875
===============================================================
INSURANCE BROKERS-0.65%
Marsh & McLennan Cos., Inc. 70,000 8,190,000
===============================================================
INVESTMENT
BANKING/BROKERAGE-0.50%
Lehman Brothers Holdings Inc. 92,800 6,275,600
===============================================================
INVESTMENT MANAGEMENT-0.64%
Stilwell Financial, Inc. 206,000 8,124,125
===============================================================
LEISURE TIME (PRODUCTS)-0.47%
Harley-Davidson, Inc. 151,000 6,002,250
===============================================================
MANUFACTURING (DIVERSIFIED)-0.50%
Tyco International Ltd. (Bermuda) 115,000 6,382,500
===============================================================
MANUFACTURING (SPECIALIZED)-1.38%
CTS Corp. 200,000 7,287,500
---------------------------------------------------------------
Flextronics International Ltd.
(Singapore)(a) 357,420 10,186,470
===============================================================
17,473,970
===============================================================
NATURAL GAS-2.57%
Dynegy Inc.-Class A 290,000 16,258,125
---------------------------------------------------------------
Enron Corp. 195,000 16,209,375
===============================================================
32,467,500
===============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-2.35%
Cooper Cameron Corp.(a) 120,000 7,927,500
---------------------------------------------------------------
Diamond Offshore Drilling, Inc. 125,000 5,000,000
---------------------------------------------------------------
ENSCO International Inc. 164,600 5,606,688
---------------------------------------------------------------
Schlumberger Ltd. 53,400 4,268,663
---------------------------------------------------------------
Transocean Sedco Forex Inc. 150,210 6,909,660
===============================================================
29,712,511
===============================================================
PAPER & FOREST PRODUCTS-0.31%
International Paper Co. 96,700 3,946,569
===============================================================
RESTAURANTS-0.88%
CEC Entertainment Inc.(a) 328,000 11,193,000
===============================================================
RETAIL (BUILDING SUPPLIES)-0.71%
Sherwin-Williams Co. (The) 340,000 8,946,250
===============================================================
RETAIL (COMPUTERS &
ELECTRONICS)-0.47%
Best Buy Co., Inc.(a) 200,000 5,912,500
===============================================================
RETAIL (FOOD CHAINS)-0.75%
Kroger Co. (The)(a) 350,000 9,471,875
===============================================================
RETAIL (SPECIALTY)-1.30%
Rent-A-Center, Inc.(a) 221,000 7,624,500
---------------------------------------------------------------
|
FS-64
MARKET
SHARES VALUE
RETAIL (SPECIALTY)-(CONTINUED)
Zale Corp.(a) 304,000 $ 8,835,000
===============================================================
16,459,500
===============================================================
RETAIL (SPECIALTY-APPAREL)-1.57%
Men's Wearhouse, Inc. (The)(a) 596,000 16,241,000
---------------------------------------------------------------
Too Inc.(a) 290,000 3,625,000
===============================================================
19,866,000
===============================================================
SERVICES (COMMERCIAL &
CONSUMER)-2.22%
Convergys Corp.(a) 98,000 4,440,625
---------------------------------------------------------------
H&R Block, Inc. 270,000 11,171,250
---------------------------------------------------------------
Iron Mountain Inc.(a) 161,000 5,977,125
---------------------------------------------------------------
TeleTech Holdings, Inc.(a) 355,100 6,524,963
===============================================================
28,113,963
===============================================================
SERVICES (COMPUTER SYSTEMS)-0.99%
Critical Path, Inc.(a) 53,000 1,629,750
---------------------------------------------------------------
SunGard Data Systems Inc.(a) 230,000 10,838,750
===============================================================
12,468,500
===============================================================
SERVICES (DATA PROCESSING)-2.89%
Concord EFS, Inc.(a) 174,825 7,681,373
---------------------------------------------------------------
DST Systems, Inc.(a) 116,200 7,785,400
---------------------------------------------------------------
First Data Corp. 122,000 6,427,875
---------------------------------------------------------------
Fiserv, Inc.(a) 85,275 4,045,233
---------------------------------------------------------------
Learning Tree International,
Inc.(a) 117,800 5,831,100
---------------------------------------------------------------
Paychex, Inc. 100,000 4,862,500
===============================================================
36,633,481
===============================================================
|
MARKET
SHARES VALUE
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-0.59%
Amdocs Ltd. (United Kingdom)(a) 66,700 $ 4,418,875
---------------------------------------------------------------
Nextel Communications, Inc.-Class
A(a) 122,000 3,019,500
===============================================================
7,438,375
===============================================================
TELECOMMUNICATIONS (LONG
DISTANCE)-0.11%
Global Crossing Ltd. (Bermuda)(a) 98,842 1,414,676
===============================================================
WASTE MANAGEMENT-1.20%
Waste Management, Inc. 546,600 15,168,150
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$868,657,168) 1,194,956,115
===============================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.39%
U.S. TREASURY BILLS-0.39%
5.77%, 03/22/01 (Cost
$4,938,667)(b) $ 5,000,000 4,939,500
===============================================================
SHARES
MONEY MARKET FUNDS-13.13%
STIC Liquid Assets Portfolio(c) 83,123,492 83,123,492
---------------------------------------------------------------
STIC Prime Portfolio(c) 83,123,492 83,123,492
===============================================================
Total Money Market Funds
(Cost $166,246,984) 166,246,984
===============================================================
TOTAL INVESTMENTS-107.95% (Cost
$1,039,842,819) 1,366,142,599
===============================================================
LIABILITIES LESS OTHER
ASSETS-(7.95%) (100,666,536)
===============================================================
NET ASSETS-100.00% $1,265,476,063
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) 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-65
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost
$1,039,842,819) $1,366,142,599
-------------------------------------------------------------
Receivables for:
Investments sold 14,844,357
-------------------------------------------------------------
Fund shares sold 6,120,758
-------------------------------------------------------------
Dividends 1,442,654
-------------------------------------------------------------
Investment for deferred compensation plan 79,983
-------------------------------------------------------------
Other assets 93,794
=============================================================
Total assets 1,388,724,145
=============================================================
LIABILITIES:
Payables for:
Investments purchased 117,468,895
-------------------------------------------------------------
Fund shares reacquired 3,439,848
-------------------------------------------------------------
Deferred compensation plan 79,983
-------------------------------------------------------------
Accrued advisory fees 677,736
-------------------------------------------------------------
Accrued administrative services fees 12,142
-------------------------------------------------------------
Accrued distribution fees 1,301,215
-------------------------------------------------------------
Accrued trustees' fees 190
-------------------------------------------------------------
Accrued transfer agent fees 131,510
-------------------------------------------------------------
Accrued operating expenses 136,563
=============================================================
Total liabilities 123,248,082
=============================================================
Net assets applicable to shares outstanding $1,265,476,063
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 532,042,366
_____________________________________________________________
=============================================================
Class B $ 661,444,891
_____________________________________________________________
=============================================================
Class C $ 71,988,806
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.010 PAR VALUE PER
SHARE:
Class A 23,253,557
_____________________________________________________________
=============================================================
Class B 31,391,795
_____________________________________________________________
=============================================================
Class C 3,420,579
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 22.88
-------------------------------------------------------------
Offering price per share:
(Net asset value of $22.88 divided by
94.50%) $ 24.21
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 21.07
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 21.05
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended December 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$56,829) $ 3,070,333
------------------------------------------------------------
Dividends from affiliated money market funds 10,362,176
------------------------------------------------------------
Interest 178,800
============================================================
Total investment income 13,611,309
============================================================
EXPENSES:
Advisory fees 8,431,513
------------------------------------------------------------
Administrative services fees 144,211
------------------------------------------------------------
Custodian fees 115,732
------------------------------------------------------------
Distribution fees -- Class A 1,370,376
------------------------------------------------------------
Distribution fees -- Class B 7,047,426
------------------------------------------------------------
Distribution fees -- Class C 541,490
------------------------------------------------------------
Transfer agent fees -- Class A 633,578
------------------------------------------------------------
Transfer agent fees -- Class B 997,339
------------------------------------------------------------
Transfer agent fees -- Class C 76,631
------------------------------------------------------------
Trustees' fees 8,543
------------------------------------------------------------
Other 484,783
============================================================
Total expenses 19,851,622
============================================================
Less: Expenses paid indirectly (48,211)
------------------------------------------------------------
Net expenses 19,803,411
============================================================
Net investment income (loss) (6,192,102)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FUTURES
CONTRACTS:
Net realized gain (loss) from:
Investment securities 163,108,296
------------------------------------------------------------
Futures contracts (9,703,339)
============================================================
153,404,957
============================================================
Change in net unrealized appreciation
(depreciation) of investment securities (209,245,233)
============================================================
Net gain (loss) from investment securities
and futures contracts (55,840,276)
============================================================
Net increase (decrease) in net assets
resulting from operations $ (62,032,378)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-66
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (6,192,102) $ (6,500,213)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities and futures
contracts 153,404,957 46,613,838
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and futures contracts (209,245,233) 268,442,968
==============================================================================================
Net increase (decrease) in net assets resulting from
operations (62,032,378) 308,556,593
==============================================================================================
Distributions to shareholders from net realized gains:
Class A (59,353,657) (17,929,351)
----------------------------------------------------------------------------------------------
Class B (80,285,223) (24,484,976)
----------------------------------------------------------------------------------------------
Class C (8,275,783) (997,756)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 150,959,050 25,912,665
----------------------------------------------------------------------------------------------
Class B 181,653,821 19,950,492
----------------------------------------------------------------------------------------------
Class C 63,351,899 11,803,897
==============================================================================================
Net increase in net assets 186,017,729 322,811,564
==============================================================================================
NET ASSETS:
Beginning of year 1,079,458,334 756,646,770
==============================================================================================
End of year $1,265,476,063 $1,079,458,334
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 945,455,716 $ 548,170,108
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (101,758) (88,818)
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and futures contracts (6,177,675) (4,167,969)
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
futures contracts 326,299,780 535,545,013
==============================================================================================
$1,265,476,063 $1,079,458,334
______________________________________________________________________________________________
==============================================================================================
|
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Select Growth Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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
FS-67
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 December 31, 2000, undistributed net investment income was increased by $6,179,162, undistributed net realized gains decreased by $7,500,000, and paid-in capital increased by $1,320,838 as a result of differences due to utilization of a portion of the proceed from redemptions as distributions for federal income tax purposes 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. 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.
F. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.80% of the first
$150 million of the Fund's average daily net assets, plus 0.625% of the Fund's
average daily net assets in excess of $150 million.
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 December 31, 2000, AIM was
paid $144,211 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 year ended December 31, 2000, AFS
was paid $1,049,302 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing
FS-68
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 December 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $1,370,376,
$7,047,426 and $541,490, respectively, as compensation under the Plans.
AIM Distributors received commissions of $511,968 from sales of the Class A
shares of the Fund during the year ended December 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 December 31, 2000,
AIM Distributors received $32,980 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors. During the year ended December 31, 2000, the Fund paid
legal fees of $6,463 for services rendered by Kramer, Levin, Naftalis & Frankel
LLP as counsel to the Board of Trustees. A member of that firm is a trustee of
the Trust.
NOTE 3-INDIRECT EXPENSES
For the year ended December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $21,267 and reductions in custodian fees of $26,944 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $48,211.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended December 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 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 2000 was
$863,902,291 and $641,595,238, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $413,280,245 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (87,118,532) ========================================================= Net unrealized appreciation of investment securities $326,161,713 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $1,039,980,886. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 2000 and 1999 were as follows:
2000 1999
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
Sold:
Class A 6,779,004 $ 198,529,121 8,174,582 $ 169,122,203
------------------------------------------------------------------------------------------------------------------------
Class B 7,978,650 219,786,359 5,441,024 110,096,224
------------------------------------------------------------------------------------------------------------------------
Class C 2,377,973 64,756,969 820,566 16,761,504
========================================================================================================================
Issued as reinvestment of dividends:
Class A 2,458,664 56,574,104 702,598 17,072,219
------------------------------------------------------------------------------------------------------------------------
Class B 3,538,127 74,996,759 996,161 22,682,713
------------------------------------------------------------------------------------------------------------------------
Class C 377,111 7,983,463 41,870 952,496
========================================================================================================================
Reacquired:
Class A (3,586,000) (104,144,175) (7,818,939) (160,281,757)
------------------------------------------------------------------------------------------------------------------------
Class B (4,240,494) (113,129,297) (5,672,316) (112,828,445)
------------------------------------------------------------------------------------------------------------------------
Class C (364,164) (9,388,533) (296,926) (5,910,103)
========================================================================================================================
15,318,871 $ 395,964,770 2,388,620 $ 57,667,054
________________________________________________________________________________________________________________________
========================================================================================================================
|
FS-69
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 DECEMBER 31,
--------------------------------------------------------
2000(a) 1999 1998 1997(a) 1996
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 26.23 $ 19.35 $ 15.67 $ 14.78 $ 13.05
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.01) (0.06) (0.04) 0.01 0.07
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.44) 8.00 4.24 2.82 2.34
======================================================================================================================
Total from investment operations (0.45) 7.94 4.20 2.83 2.41
======================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- (0.01) --
----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.90) (1.06) (0.52) (1.93) (0.68)
======================================================================================================================
Total distributions (2.90) (1.06) (0.52) (1.94) (0.68)
======================================================================================================================
Net asset value, end of period $ 22.88 $ 26.23 $ 19.35 $ 15.67 $ 14.78
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(b) (1.77)% 41.48% 27.09% 19.54% 18.61%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $532,042 $461,628 $320,143 $266,168 $227,882
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets 1.07%(c) 1.09% 1.11% 1.13% 1.18%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of net investment income (loss) to average net assets (0.02)%(c) (0.31)% (0.22)% 0.04% 0.46%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 56% 31% 68% 110% 97%
______________________________________________________________________________________________________________________
======================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $548,150,411.
CLASS B
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2000(a) 1999(a) 1998 1997(a) 1996
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 24.57 $ 18.33 $ 14.98 $ 14.32 $ 12.77
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.22) (0.23) (0.17) (0.13) (0.05)
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.38) 7.53 4.04 2.72 2.28
======================================================================================================================
Total from investment operations (0.60) 7.30 3.87 2.59 2.23
======================================================================================================================
Less distributions:
Distributions from net realized gains (2.90) (1.06) (0.52) (1.93) (0.68)
______________________________________________________________________________________________________________________
======================================================================================================================
Net asset value, end of period $ 21.07 $ 24.57 $ 18.33 $ 14.98 $ 14.32
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(b) (2.50)% 40.29% 26.13% 18.50% 17.60%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $661,445 $592,555 $428,002 $356,186 $280,807
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets 1.84%(c) 1.90% 1.93% 1.99% 2.03%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of net investment income (loss) to average net assets (0.80)%(c) (1.12)% (1.04)% (0.82)% (0.39)%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 56% 31% 68% 110% 97%
______________________________________________________________________________________________________________________
======================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $704,742,549.
FS-70
NOTE 8-FINANCIAL HIGHLIGHTS (continued)
CLASS C
-----------------------------------------------
AUGUST 4, 1997
(DATE SALES
YEAR ENDED DECEMBER 31, COMMENCED) TO
----------------------------- DECEMBER 31,
2000(a) 1999(a) 1998(a) 1997(a)
------- ------- ------- --------------
Net asset value, beginning of period $ 24.55 $ 18.32 $14.98 $17.65
-------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.22) (0.23) (0.17) (0.04)
-------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.38) 7.52 4.03 (0.70)
=============================================================================================================
Total from investment operations (0.60) 7.29 3.86 (0.74)
=============================================================================================================
Less distributions:
Distributions from net realized gains (2.90) (1.06) (0.52) (1.93)
=============================================================================================================
Net asset value, end of period $ 21.05 $ 24.55 $18.32 $14.98
_____________________________________________________________________________________________________________
=============================================================================================================
Total return(b) (2.50)% 40.26% 26.07% (3.86)%
_____________________________________________________________________________________________________________
=============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $71,989 $25,275 $8,501 $1,189
_____________________________________________________________________________________________________________
=============================================================================================================
Ratio of expenses to average net assets 1.84%(c) 1.90% 1.93% 1.95%(d)
_____________________________________________________________________________________________________________
=============================================================================================================
Ratio of net investment income (loss) to average net assets (0.80)%(c) (1.12)% (1.04)% (0.77)%(d)
_____________________________________________________________________________________________________________
=============================================================================================================
Portfolio turnover rate 56% 31% 68% 110%
_____________________________________________________________________________________________________________
=============================================================================================================
|
(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 $54,149,044.
(d) Annualized.
NOTE 9-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to an investment in another fund within The AIM Family of Funds, which KPMG LLP represented to the Fund was inadvertent, and new SEC rules regarding auditor independence KPMG LLP resigned as Fund auditors on December 28, 2000. The Board of Trustees of the Trust, upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP and appointed PricewaterhouseCoopers LLP as independent public accountants to audit the financial statements of the Fund. KPMG LLP had served as independent public accountants for the two years ended December 31, 1999. The audit reports of KPMG LLP on the financial statements of the Fund for the two years ended December 31, 1999 did not contain any adverse opinions or disclaimer of opinions, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. In connection with the audits for the two years ended December 31, 1999, there were no disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, auditing scope or procedures, which disagreements, if not resolved to their satisfaction, would have caused them to make reference in connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with PricewaterhouseCoopers LLP at any time prior to their engagement with respect to the application of accounting principles to a specified transaction, either completed or proposed,or the type of audit opinions that might be rendered on the Fund's financial statements.
FS-71
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Small Cap Equity Fund
and Board of Trustees of AIM Funds Group:
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 Small Cap Equity Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-72
SCHEDULE OF INVESTMENTS
December 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-93.05%
AEROSPACE/DEFENSE-0.87%
BE Aerospace, Inc.(a) 31,600 $ 505,600
=================================================================
AGRICULTURAL PRODUCTS-0.35%
Eden Bioscience Corp.(a) 6,800 203,575
=================================================================
BANKS (REGIONAL)-2.86%
Bank United Corp.-Class A 8,600 586,412
-----------------------------------------------------------------
Commerce Bancshares, Inc. 13,130 558,025
-----------------------------------------------------------------
TCF Financial Corp. 11,700 521,381
=================================================================
1,665,818
=================================================================
BEVERAGES (ALCOHOLIC)-0.94%
Constellation Brands, Inc.-Class A(a) 9,300 546,375
=================================================================
BROADCASTING (TELEVISION, RADIO & CABLE)-1.93%
Cox Radio, Inc.-Class A(a) 23,700 534,731
-----------------------------------------------------------------
Entercom Communications Corp.(a) 17,100 588,881
=================================================================
1,123,612
=================================================================
COMMUNICATIONS EQUIPMENT-1.41%
Digital Lightwave, Inc.(a) 11,200 354,900
-----------------------------------------------------------------
UTStarcom, Inc.(a) 29,900 463,450
=================================================================
818,350
=================================================================
COMPUTERS (PERIPHERALS)-1.01%
Actel Corp.(a) 24,200 585,337
=================================================================
COMPUTERS (SOFTWARE & SERVICES)-8.50%
Affiliated Computer Services, Inc.-Class
A(a) 6,800 412,675
-----------------------------------------------------------------
Eclipsys Corp.(a) 19,900 487,550
-----------------------------------------------------------------
IntraNet Solutions, Inc.(a) 11,400 581,400
-----------------------------------------------------------------
Moldflow Corp.(a) 27,500 629,062
-----------------------------------------------------------------
Natural MicroSystems Corp.(a) 12,000 118,500
-----------------------------------------------------------------
Peregrine Systems, Inc.(a) 24,000 474,000
-----------------------------------------------------------------
Retek Inc.(a) 12,900 314,437
-----------------------------------------------------------------
Secure Computing Corp.(a) 31,200 308,100
-----------------------------------------------------------------
SERENA Software, Inc.(a) 14,600 499,822
-----------------------------------------------------------------
Sybase, Inc.(a) 27,700 548,806
-----------------------------------------------------------------
Titan Corp. (The)(a) 35,200 572,000
=================================================================
4,946,352
=================================================================
CONSUMER FINANCE-1.90%
American Capital Strategies, Ltd. 21,200 533,975
-----------------------------------------------------------------
AmeriCredit Corp.(a) 20,900 569,525
=================================================================
1,103,500
=================================================================
ELECTRIC COMPANIES-0.93%
UtiliCorp United Inc. 17,500 542,500
=================================================================
ELECTRICAL EQUIPMENT-5.68%
APW Ltd.(a) 19,500 658,125
-----------------------------------------------------------------
MARKET
SHARES VALUE
ELECTRICAL EQUIPMENT (CONTINUED)
Artesyn Technologies, Inc.(a) 35,400 $ 561,975
-----------------------------------------------------------------
Black Box Corp.(a) 11,600 560,425
-----------------------------------------------------------------
C & D Technologies, Inc. 9,900 427,556
-----------------------------------------------------------------
Sensormatic Electronics Corp.(a) 26,200 525,637
-----------------------------------------------------------------
Viasystems Group, Inc.(a) 68,700 571,069
=================================================================
3,304,787
=================================================================
ELECTRONICS (DEFENSE)-0.71%
Aeroflex Inc.(a) 14,400 415,125
=================================================================
ELECTRONICS (INSTRUMENTATION)-5.05%
Alpha Industries, Inc.(a) 12,400 458,800
-----------------------------------------------------------------
Coherent, Inc.(a) 17,300 562,250
-----------------------------------------------------------------
Garmin Ltd.(a) 29,400 580,650
-----------------------------------------------------------------
Methode Electronics, Inc.-Class A 16,700 383,056
-----------------------------------------------------------------
Photon Dynamics, Inc.(a) 17,600 396,000
-----------------------------------------------------------------
Varian Inc.(a) 16,600 562,325
=================================================================
2,943,081
=================================================================
ENGINEERING & CONSTRUCTION-1.64%
Granite Construction, Inc. 18,000 520,875
-----------------------------------------------------------------
Quanta Services, Inc.(a) 13,420 431,956
=================================================================
952,831
=================================================================
EQUIPMENT (SEMICONDUCTOR)-0.52%
Varian Semiconductor Equipment
Associates, Inc.(a) 12,700 301,625
-----------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.75%
Allied Capital Corp. 24,000 501,000
-----------------------------------------------------------------
IndyMac Mortgage Holdings, Inc.(a) 17,600 519,200
=================================================================
1,020,200
=================================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-1.87%
Alpharma Inc.-Class A 12,900 565,987
-----------------------------------------------------------------
Angiotech Pharmaceuticals, Inc.
(Canada)(a) 5,500 253,000
-----------------------------------------------------------------
Noven Pharmaceuticals, Inc.(a) 7,150 267,231
=================================================================
1,086,218
=================================================================
HEALTH CARE (HOSPITAL MANAGEMENT)-0.84%
Community Health Systems(a) 13,950 488,250
=================================================================
HEALTH CARE (MANAGED CARE)-1.06%
First Health Group Corp.(a) 8,350 388,797
-----------------------------------------------------------------
Trigon Healthcare, Inc.(a) 2,900 225,656
=================================================================
614,453
=================================================================
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-3.12%
Apogent Technologies Inc.(a) 23,800 487,900
-----------------------------------------------------------------
Henry Schein, Inc.(a) 16,400 567,850
-----------------------------------------------------------------
PolyMedica Corp.(a) 5,500 183,562
-----------------------------------------------------------------
|
FS-73
MARKET
SHARES VALUE
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) (CONTINUED)
Sybron Dental Specialties, Inc.(a) 5,333 $ 89,994
-----------------------------------------------------------------
Vital Signs, Inc. 15,200 488,300
=================================================================
1,817,606
=================================================================
HEALTH CARE (SPECIALIZED SERVICES)-3.88%
Advance Paradigm, Inc.(a) 12,000 546,000
-----------------------------------------------------------------
Laboratory Corp. of America Holdings(a) 3,000 528,000
-----------------------------------------------------------------
Lincare Holdings, Inc.(a) 9,500 542,094
-----------------------------------------------------------------
RehabCare Group, Inc.(a) 12,500 642,187
=================================================================
2,258,281
=================================================================
INSURANCE (LIFE/HEALTH)-0.98%
Annuity and Life Re (Holdings), Ltd.
(Bermuda) 17,800 568,487
=================================================================
INSURANCE (PROPERTY-CASUALTY)-1.91%
HCC Insurance Holdings, Inc. 20,400 549,525
-----------------------------------------------------------------
Radian Group Inc. 7,500 562,969
=================================================================
1,112,494
=================================================================
INVESTMENT BANKING/BROKERAGE-0.98%
LaBranche & Co. Inc.(a) 18,600 568,463
=================================================================
INVESTMENT MANAGEMENT-0.92%
Affiliated Managers Group, Inc.(a) 9,800 537,775
=================================================================
INVESTMENTS-3.84%
S&P Mid-Cap 400 Depositary Receipts 23,700 2,236,688
=================================================================
LAND DEVELOPMENT-0.90%
Mission West Properties Inc. 37,600 521,700
=================================================================
LEISURE TIME (PRODUCTS)-0.93%
Speedway Motorsports, Inc.(a) 22,500 540,000
=================================================================
MANUFACTURING (SPECIALIZED)-0.52%
CTS Corp. 8,300 302,431
=================================================================
NATURAL GAS-0.95%
MDU Resources Group, Inc. 17,100 555,750
=================================================================
OFFICE EQUIPMENT & SUPPLIES-0.94%
Reynolds & Reynolds Co. (The)- Class A 26,900 544,725
=================================================================
OIL & GAS (DRILLING & EQUIPMENT)-3.01%
Grant Prideco, Inc.(a) 27,400 601,088
-----------------------------------------------------------------
Key Energy Services, Inc.(a) 58,700 612,681
-----------------------------------------------------------------
Pride International, Inc.(a) 22,000 541,750
=================================================================
1,755,519
=================================================================
OIL & GAS (EXPLORATION & PRODUCTION)-4.09%
Barrett Resources Corp.(a) 11,000 624,938
-----------------------------------------------------------------
Cross Timbers Oil Co. 20,000 555,000
-----------------------------------------------------------------
Forest Oil Corp.(a) 16,350 602,906
-----------------------------------------------------------------
Westport Resources Corp.(a) 27,400 601,088
=================================================================
2,383,932
=================================================================
OIL & GAS (REFINING & MARKETING)-0.98%
Valero Energy Corp. 15,400 572,688
=================================================================
MARKET
SHARES VALUE
PAPER & FOREST PRODUCTS-0.74%
Wausau-Mosinee Paper Corp. 42,700 $ 432,338
=================================================================
PHOTOGRAPHY/IMAGING-0.96%
Concord Camera Corp.(a) 34,000 561,000
=================================================================
RAILROADS-0.89%
GATX Corp. 10,400 518,700
=================================================================
REAL ESTATE INVESTMENT TRUSTS-0.88%
CarrAmerica Realty Corp. 16,400 513,525
=================================================================
RESTAURANTS-0.91%
CEC Entertainment Inc.(a) 11,200 382,200
-----------------------------------------------------------------
P.F. Chang's China Bistro, Inc.(a) 4,700 147,756
=================================================================
529,956
=================================================================
RETAIL (DISCOUNTERS)-0.93%
Stein Mart, Inc.(a) 46,600 541,725
=================================================================
RETAIL (SPECIALTY)-1.31%
Linens 'n Things, Inc.(a) 11,100 306,638
-----------------------------------------------------------------
Venator Group, Inc.(a) 29,600 458,800
=================================================================
765,438
=================================================================
RETAIL (SPECIALTY-APPAREL)-2.19%
Abercrombie & Fitch Co.-Class A(a) 30,300 606,000
-----------------------------------------------------------------
bebe stores, inc.(a) 15,000 320,625
-----------------------------------------------------------------
Hot Topic, Inc.(a) 16,600 272,863
-----------------------------------------------------------------
Too Inc.(a) 6,200 77,500
=================================================================
1,276,988
=================================================================
SERVICES (ADVERTISING/MARKETING)-1.38%
Forrester Research, Inc.(a) 9,500 475,594
-----------------------------------------------------------------
Professional Detailing, Inc.(a) 3,100 327,873
=================================================================
803,467
=================================================================
SERVICES (COMMERCIAL & CONSUMER)-5.70%
Copart, Inc.(a) 26,400 567,600
-----------------------------------------------------------------
DiamondCluster International, Inc.-Class
A 8,000 244,000
-----------------------------------------------------------------
Edison Schools Inc.(a) 8,360 263,340
-----------------------------------------------------------------
Iron Mountain Inc.(a) 16,100 597,713
-----------------------------------------------------------------
Ogden Corp.(a) 34,200 525,825
-----------------------------------------------------------------
TeleTech Holdings, Inc.(a) 29,300 538,388
-----------------------------------------------------------------
Watson Wyatt & Co. Holdings(a) 24,800 582,800
=================================================================
3,319,666
=================================================================
SERVICES (COMPUTER SYSTEMS)-1.03%
Insight Enterprises, Inc.(a) 33,450 600,009
=================================================================
SERVICES (DATA PROCESSING)-1.13%
Learning Tree International, Inc.(a) 13,300 658,350
=================================================================
SERVICES (EMPLOYMENT)-1.91%
Hall, Kinion & Associates, Inc.(a) 29,000 583,625
-----------------------------------------------------------------
Heidrick & Struggles International,
Inc.(a) 7,800 328,088
-----------------------------------------------------------------
Korn/Ferry International(a) 9,500 201,875
=================================================================
1,113,588
=================================================================
|
FS-74
MARKET
SHARES VALUE
SERVICES (FACILITIES & ENVIRONMENTAL)-0.94%
Tetra Tech, Inc.(a) 17,100 $ 545,063
=================================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-3.23%
Arch Wireless, Inc.(a) 21,700 13,563
-----------------------------------------------------------------
o2wireless Solutions, Inc.(a) 79,600 741,275
-----------------------------------------------------------------
Powerwave Technologies, Inc.(a) 8,050 470,925
-----------------------------------------------------------------
Rural Cellular Corp.-Class A(a) 6,500 192,563
-----------------------------------------------------------------
Spectrasite Holdings, Inc.(a) 34,900 462,425
=================================================================
1,880,751
=================================================================
WASTE MANAGEMENT-1.15%
Waste Connections, Inc.(a) 20,200 667,863
=================================================================
Total Domestic Common Stocks
(Cost $52,108,651) 54,172,555
=================================================================
MARKET
SHARES VALUE
MONEY MARKET FUNDS-6.32%
STIC Liquid Assets Portfolio(b) 1,839,695 $ 1,839,695
-----------------------------------------------------------------
STIC Prime Portfolio(b) 1,839,695 1,839,695
-----------------------------------------------------------------
Total Money Market Funds
(Cost $3,679,390) 3,679,390
=================================================================
TOTAL INVESTMENTS-99.37%
(Cost $55,788,041) 57,851,945
=================================================================
OTHER ASSETS LESS LIABILITIES-0.63% 366,930
=================================================================
NET ASSETS-100.00% $58,218,875
_________________________________________________________________
=================================================================
|
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-75
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost $55,788,041) $57,851,945
--------------------------------------------------------------
Receivables for:
Investments sold 359,504
--------------------------------------------------------------
Fund shares sold 1,925,753
--------------------------------------------------------------
Dividends 57,463
--------------------------------------------------------------
Investment for deferred compensation plan 2,547
--------------------------------------------------------------
Other assets 105,661
==============================================================
Total assets 60,302,873
==============================================================
LIABILITIES:
Payables for:
Investments purchased 1,837,953
--------------------------------------------------------------
Fund shares reacquired 110,351
--------------------------------------------------------------
Options written (premiums received $8,084) 4,406
--------------------------------------------------------------
Deferred compensation plan 2,547
--------------------------------------------------------------
Accrued administrative services fees 4,235
--------------------------------------------------------------
Accrued distribution fees 39,077
--------------------------------------------------------------
Accrued trustees' fees 159
--------------------------------------------------------------
Accrued transfer agent fees 12,108
--------------------------------------------------------------
Accrued operating expenses 73,162
==============================================================
Total liabilities 2,083,998
==============================================================
Net assets applicable to shares outstanding $58,218,875
==============================================================
NET ASSETS:
Class A $32,805,332
==============================================================
Class B $16,385,293
==============================================================
Class C $9,028,250
==============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 3,506,570
==============================================================
Class B 1,755,406
==============================================================
Class C 967,023
==============================================================
Class A:
Net asset value and redemption price per share $ 9.36
==============================================================
Offering price per share:
(Net asset value of $9.36 DIVIDED BY 94.50%) $ 9.90
==============================================================
Class B:
Net asset value and offering price per share $ 9.33
==============================================================
Class C:
Net asset value and offering price per share $ 9.34
______________________________________________________________
==============================================================
|
STATEMENT OF OPERATIONS
For the period August 31, 2000 (date operations commenced) through December 31, 2000
INVESTMENT INCOME:
Dividends $ 85,042
--------------------------------------------------------------
Dividends from affiliated money market funds 65,794
--------------------------------------------------------------
Interest 20,882
==============================================================
Total investment income 171,718
==============================================================
EXPENSES:
Advisory fees 89,083
--------------------------------------------------------------
Administrative services fees 16,667
--------------------------------------------------------------
Custodian fees 16,864
--------------------------------------------------------------
Distribution fees--Class A 21,788
--------------------------------------------------------------
Distribution fees--Class B 28,721
--------------------------------------------------------------
Distribution fees--Class C 13,831
--------------------------------------------------------------
Transfer agent fees--Class A 16,053
--------------------------------------------------------------
Transfer agent fees--Class B 9,226
--------------------------------------------------------------
Transfer agent fees--Class C 4,443
--------------------------------------------------------------
Trustee's fees 3,262
--------------------------------------------------------------
Registration and filing fees 65,263
--------------------------------------------------------------
Other 30,334
==============================================================
Total expenses 315,535
==============================================================
Less: Fees waived and expenses reimbursed (98,508)
==============================================================
Expenses paid indirectly (2,339)
==============================================================
Net expenses 214,688
==============================================================
Net investment income (loss) (42,970)
==============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FUTURES CONTRACTS AND
OPTION CONTRACTS
Net realized gain (loss) from:
Investment securities (3,389,183)
--------------------------------------------------------------
Futures contracts 230
==============================================================
(3,388,953)
==============================================================
Change in net unrealized appreciation of:
Investment securities 2,063,904
--------------------------------------------------------------
Option contracts written 3,677
==============================================================
2,067,581
==============================================================
Net gain (loss) from investment securities,
futures contracts and option contracts (1,321,372)
==============================================================
Net increase (decrease) in net assets resulting
from operations $(1,364,342)
______________________________________________________________
==============================================================
|
See Notes to Financial Statements.
FS-76
STATEMENT OF CHANGES IN NET ASSETS
For the period August 31, 2000 (date operations commenced) through December 31,
2000
2000
-----------
OPERATIONS:
Net investment income (loss) $ (42,970)
---------------------------------------------------------------
Net realized gain (loss) from investment
securities, futures contracts and option
contracts (3,388,953)
---------------------------------------------------------------
Change in net unrealized appreciation of
investment securities, futures contracts and
option contracts 2,067,581
---------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (1,364,342)
---------------------------------------------------------------
Share transactions--net:
---------------------------------------------------------------
Class A 33,716,692
---------------------------------------------------------------
Class B 16,719,812
---------------------------------------------------------------
Class C 9,146,713
---------------------------------------------------------------
Net increase in net assets 58,218,875
---------------------------------------------------------------
NET ASSETS:
Beginning of period --
---------------------------------------------------------------
End of period $58,218,875
_______________________________________________________________
===============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $59,572,581
---------------------------------------------------------------
Undistributed net investment income (loss) (32,334)
---------------------------------------------------------------
Undistributed net realized gain (loss) from
investment securities, futures contracts and
option contracts (3,388,953)
---------------------------------------------------------------
Unrealized appreciation of investment
securities, futures contracts and option
contracts 2,067,581
===============================================================
$58,218,875
_______________________________________________________________
===============================================================
|
See Notes to Financial Statements.
FS-77
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Small Cap Equity Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940" Act), as an open-end
series management investment company consisting of ten separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund commenced
operations on August 31, 2000. The Fund currently offers three different classes
of shares: Class A shares, Class B shares and Class C shares. Class A shares are
sold with a front-end sales charge. Class B shares and Class C shares are sold
with a contingent deferred sales charge. Matters affecting each portfolio or
class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Funds investment objective is to achieve 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 Trusts 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 December 31, 2000,
undistributed net investment income was increased by $10,636 and paid-in
capital decreased by $10,636 as a result of non-deductible stock issuance
costs for federal income tax purposes. 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. The Fund has a capital loss
carryforward of $700,371 as of December 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. 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.
FS-78
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.
F. 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 days 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.
G. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes
operations. All other expenses which are attributable to more than one class
are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. (AIM). Under the terms of the investment advisory agreement, the
Fund pays an advisory fee to AIM at the annual rate of 0.85% of the Funds
average daily net assets. For the period August 31, 2000 (date operations
commenced) through December 31, 2000, AIM waived fees of $89,083 and was
reimbursed fees of $9,425.
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 period August 31, 2000 (date operations
commenced) through December 31, 2000 A I M was paid $16,667 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 period August 31, 2000 (date
operations commenced) through December 31, 2000 AFS was paid $12,321 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 0.35% of
the Funds 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 period August 31, 2000 (date
operations commenced) through December 31, 2000 the Class A, Class B and
Class C shares paid AIM Distributors $21,788, $28,721 and $13,831, respectively,
as compensation under the Plans.
AIM Distributors received commissions of $66,008 from sales of the Class A
shares of the Fund for the period August 31, 2000 (date operations commenced)
through December 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. For the same period, AIM Distributors received $541 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. For the period August 31, 2000 (date operations
commenced) through December 31, 2000, the Fund paid legal fees of $977 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the period August 31, 2000 (date operations commenced) through December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $244 and reductions in custodian fees of $2,095 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $2,339.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an interested person of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. For the period August 31, 2000
through December 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.
FS-79
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the period August 31, 2000 (date
operations commenced) through December 31, 2000 was $68,616,044 and $13,118,210,
respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $5,589,590 ------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (4,067,771) ============================================================= Net unrealized appreciation of investment securities $1,521,819 _____________________________________________________________ ============================================================= |
Cost of investments for tax purposes is $56,330,126.
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the period August 31, 2000 (date operations commenced) through December 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
---------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- --------
Beginning of year -- $ --
-------------------------------------------------------------
Written 47 8,084
-------------------------------------------------------------
End of year 47 $8,084
-------------------------------------------------------------
|
Open call option contracts written as of December 31, 2000 were as follows:
CONTRACT STRIKE NUMBER OF PREMIUMS MARKET UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE APPRECIATION
----- -------- ------ --------- -------- ------ ------------
P.F. Changs China Bistro
Inc. January $40 47 $8,084 $4,406 $3,677
--------------------------------------------------------------------------------------
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the period August 31, 2000 (date operations commenced) and December 31, 2000 were as follows:
2000
-----------------------
SHARES AMOUNT
---------- -----------
Sold:
Class A 3,707,242 $35,554,951
-----------------------------------------------------------------
Class B 1,851,798 17,580,252
-----------------------------------------------------------------
Class C 1,021,221 9,654,027
-----------------------------------------------------------------
Reacquired:
Class A (200,672) (1,838,259)
-----------------------------------------------------------------
Class B (96,392) (860,440)
-----------------------------------------------------------------
Class C (54,198) (507,314)
-----------------------------------------------------------------
6,228,999 $59,583,217
-----------------------------------------------------------------
|
FS-80
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
----------------------------------
AUGUST 31, 2000 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 2000(a)
----------------------------------
Net asset value, beginning of period $ 10.00
---------------------------------------------------------------------------------------------
Income from investment operations:
Net gains (losses) on securities (both realized
and unrealized) (0.64)
=============================================================================================
Total from investment operations (0.64)
=============================================================================================
Net asset value, end of period $ 9.36
_____________________________________________________________________________________________
=============================================================================================
Total return(b) (6.40)%
_____________________________________________________________________________________________
=============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $32,805
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c)
---------------------------------------------------------------------------------------------
Without fee waivers 2.72%(c)
_____________________________________________________________________________________________
=============================================================================================
Ratio of net investment loss to average net assets (0.12)%(c)
_____________________________________________________________________________________________
=============================================================================================
Portfolio turnover rate 49%
_____________________________________________________________________________________________
=============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and are not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of $18,523,608.
CLASS B
----------------------------------
AUGUST 31, 2000 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 2000(a)
----------------------------------
Net asset value, beginning of period $ 10.00
---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.03)
---------------------------------------------------------------------------------------------
Net losses on securities (both realized and
unrealized) (0.64)
=============================================================================================
Total from investment operations (0.67)
=============================================================================================
Net asset value, end of period $ 9.33
_____________________________________________________________________________________________
=============================================================================================
Total return(b) (6.70)%
_____________________________________________________________________________________________
=============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $16,385
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.49%(c)
---------------------------------------------------------------------------------------------
Without fee waivers 3.43%(c)
_____________________________________________________________________________________________
=============================================================================================
Ratio of net investment loss to average net assets (0.83)%(c)
_____________________________________________________________________________________________
=============================================================================================
Portfolio turnover rate 49%
_____________________________________________________________________________________________
=============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and are not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $8,546,348.
FS-81
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
----------------------------------
AUGUST 31, 2000 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 2000(a)
----------------------------------
Net asset value, beginning of period $10.00
---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.03)
---------------------------------------------------------------------------------------------
Net losses on securities (both realized and
unrealized) (0.63)
=============================================================================================
Total from investment operations (0.66)
=============================================================================================
Net asset value, end of period $ 9.34
_____________________________________________________________________________________________
=============================================================================================
Total return(b) (6.60)%
_____________________________________________________________________________________________
=============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $9,028
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.49%(c)
---------------------------------------------------------------------------------------------
Without fee waivers 3.43%(c)
_____________________________________________________________________________________________
=============================================================================================
Ratio of net investment loss to average net assets (0.83)%(c)
_____________________________________________________________________________________________
=============================================================================================
Portfolio turnover rate 49%
_____________________________________________________________________________________________
=============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and are not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $4,115,423.
NOTE 10-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP has
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence, KPMG LLP resigned as Fund auditors on December 28, 2000 prior to
the first fiscal period end of the Fund. The Board of Trustees of the Trust,
upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP
and appointed PricewaterhouseCoopers LLP as independent public accountants to
audit the financial statements of the Fund. There were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinions that might be rendered on
the Funds financial statements.
FS-82
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Value Fund
and Board of Trustees of AIM Funds Group:
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 Value Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statements of changes in net assets of the Fund for the year ended December 31, 1999 and the financial highlights for each of the periods ended on or before December 31, 1999 were audited by other independent accountants whose report dated February 14, 2000 expressed an unqualified opinion thereon.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-83
SCHEDULE OF INVESTMENTS
December 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-80.63%
BANKS (MAJOR REGIONAL)-0.55%
Bank of New York Co., Inc. (The) 2,500,000 $ 137,968,750
================================================================
BANKS (MONEY CENTER)-1.16%
J.P. Morgan Chase & Co. 6,375,000 289,664,062
================================================================
BROADCASTING (TELEVISION,
RADIO & CABLE)-10.85%
Comcast Corp.-Class A(a)(b) 39,250,000 1,638,687,500
----------------------------------------------------------------
Cox Communications, Inc.-Class
A(a) 23,000,000 1,070,937,500
================================================================
2,709,625,000
================================================================
COMPUTERS (HARDWARE)-2.69%
Apple Computer, Inc.(a)(b) 17,500,000 260,312,500
----------------------------------------------------------------
Compaq Computer Corp. 20,000,000 301,000,000
----------------------------------------------------------------
Sun Microsystems, Inc.(a) 4,000,000 111,500,000
================================================================
672,812,500
================================================================
COMPUTERS (NETWORKING)-1.85%
Cisco Systems, Inc.(a) 12,107,000 463,092,750
================================================================
COMPUTERS (PERIPHERALS)-0.99%
EMC Corp.(a) 3,700,000 246,050,000
================================================================
COMPUTERS (SOFTWARE & SERVICES)-2.40%
America Online, Inc.(a) 4,500,000 156,600,000
----------------------------------------------------------------
At Home Corp.-Series A(a) 4,803,700 26,570,466
----------------------------------------------------------------
Microsoft Corp.(a) 2,250,000 97,593,750
----------------------------------------------------------------
Oracle Corp.(a) 11,000,000 319,687,500
================================================================
600,451,716
================================================================
ELECTRICAL EQUIPMENT-0.22%
Solectron Corp.(a) 1,600,000 54,240,000
================================================================
ELECTRONICS (SEMICONDUCTORS)-2.15%
Analog Devices, Inc.(a) 10,500,000 537,468,750
================================================================
EQUIPMENT (SEMICONDUCTOR)-0.90%
Applied Materials, Inc.(a) 2,000,000 76,375,000
----------------------------------------------------------------
Teradyne, Inc.(a) 4,000,000 149,000,000
================================================================
225,375,000
================================================================
FINANCIAL (DIVERSIFIED)-6.65%
American Express Co. 9,750,000 535,640,625
----------------------------------------------------------------
Citigroup Inc. 14,033,333 716,577,066
----------------------------------------------------------------
Freddie Mac 2,750,000 189,406,250
----------------------------------------------------------------
J.P. Morgan & Co., Inc. 1,325,000 219,287,500
================================================================
1,660,911,441
================================================================
|
MARKET
SHARES VALUE
HEALTH CARE (DIVERSIFIED)-2.24%
Johnson & Johnson 5,325,000 $ 559,457,812
================================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-4.66%
Pfizer Inc. 20,391,200 937,995,200
----------------------------------------------------------------
Schering-Plough Corp. 4,000,000 227,000,000
================================================================
1,164,995,200
================================================================
HEALTH CARE (MANAGED CARE)-1.23%
UnitedHealth Group Inc. 5,000,000 306,875,000
================================================================
HEALTH CARE (MEDICAL PRODUCTS
& SUPPLIES)-1.34%
Baxter International, Inc. 1,500,000 132,468,750
----------------------------------------------------------------
Guidant Corp.(a) 3,739,000 201,672,312
================================================================
334,141,062
================================================================
HOUSEHOLD PRODUCTS
(NON-DURABLES)-1.27%
Kimberly-Clark Corp. 4,500,000 318,105,000
================================================================
INSURANCE (MULTI-LINE)-4.65%
American International Group,
Inc. 10,125,000 997,945,312
----------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 2,300,000 162,437,500
================================================================
1,160,382,812
================================================================
INVESTMENT BANKING/BROKERAGE-4.75%
Merrill Lynch & Co., Inc. 3,200,000 218,200,000
----------------------------------------------------------------
Morgan Stanley Dean Witter &
Co. 12,231,700 969,362,225
================================================================
1,187,562,225
================================================================
MANUFACTURING (DIVERSIFIED)-2.46%
Honeywell International Inc. 13,000,000 615,062,500
================================================================
NATURAL GAS-1.59%
Williams Cos., Inc. (The) 9,960,900 397,813,444
================================================================
OIL & GAS (DRILLING & EQUIPMENT)-2.19%
R&B Falcon Corp.(a) 3,855,700 88,440,119
----------------------------------------------------------------
Schlumberger Ltd. 3,625,000 289,773,438
----------------------------------------------------------------
Transocean Sedco Forex Inc. 3,647,100 167,766,600
================================================================
545,980,157
================================================================
OIL (INTERNATIONAL INTEGRATED)-1.76%
Chevron Corp. 1,600,000 135,100,000
----------------------------------------------------------------
Exxon Mobil Corp. 3,500,000 304,281,250
================================================================
439,381,250
================================================================
|
FS-84
MARKET
SHARES VALUE
RETAIL (COMPUTERS & ELECTRONICS)-0.96%
Best Buy Co., Inc.(a) 8,071,500 $ 238,613,719
================================================================
RETAIL (DRUG STORES)-2.72%
Walgreen Co. 16,231,000 678,658,688
================================================================
RETAIL (FOOD CHAINS)-3.22%
Kroger Co. (The)(a) 8,000,000 216,500,000
----------------------------------------------------------------
Safeway Inc.(a) 9,405,600 587,850,000
================================================================
804,350,000
================================================================
RETAIL (GENERAL MERCHANDISE)-4.00%
Costco Wholesale Corp.(a) 6,750,000 269,578,125
----------------------------------------------------------------
Target Corp. 22,600,000 728,850,000
================================================================
998,428,125
================================================================
RETAIL (SPECIALTY-APPAREL)-0.51%
Gap, Inc. (The) 5,000,000 127,500,000
================================================================
SERVICES (ADVERTISING/MARKETING)-3.09%
Omnicom Group Inc.(b) 9,307,300 771,342,488
================================================================
SERVICES (DATA PROCESSING)-4.70%
Automatic Data Processing,
Inc. 4,700,000 297,568,750
----------------------------------------------------------------
First Data Corp. 16,623,900 875,871,731
================================================================
1,173,440,481
================================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-2.88%
Nextel Communications,
Inc.-Class A(a) 29,093,800 720,071,550
================================================================
Total Domestic Common
Stocks (Cost
$17,862,991,702) 20,139,821,482
================================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-10.30%
BERMUDA-4.89%
Tyco International Ltd.
(Manufacturing- Diversified) 22,000,000 1,221,000,000
================================================================
CANADA-2.29%
Celestica Inc. (Electronics-
Semiconductors)(a) 7,600,000 412,300,000
----------------------------------------------------------------
|
MARKET
SHARES VALUE
CANADA-(CONTINUED)
Nortel Networks Corp.
(Communications Equipment) 5,000,000 $ 160,312,500
================================================================
572,612,500
================================================================
FINLAND-1.17%
Nokia Oyj-ADR (Communications
Equipment) 6,700,000 291,450,000
================================================================
FRANCE-0.45%
Alcatel S.A.-ADR
(Communications Equipment) 2,000,000 111,875,000
================================================================
UNITED KINGDOM-1.50%
Amdocs Ltd.
(Telecommunications-
Cellular/Wireless)(a) 115,900 7,678,375
----------------------------------------------------------------
BP Amoco PLC-ADR
(Oil-International Integrated) 7,700,000 368,637,500
================================================================
376,315,875
================================================================
Total Foreign Stocks &
Other Equity Interests
(Cost $1,939,079,867) 2,573,253,375
================================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.21%
U.S. TREASURY BILLS-0.21%
5.77%, 03/22/01 (Cost
$51,375,467)(c)(d) $ 52,000,000 51,370,800
================================================================
SHARES
MONEY MARKET FUNDS-9.37%
STIC Liquid Assets
Portfolio(e) 1,169,522,058 1,169,522,058
----------------------------------------------------------------
STIC Prime Portfolio(e) 1,169,522,058 1,169,522,058
================================================================
Total Money Market Funds
(Cost $2,339,044,116) 2,339,044,116
================================================================
TOTAL INVESTMENTS-100.51%
(Cost $22,192,491,152) 25,103,489,773
================================================================
LIABILITIES LESS OTHER
ASSETS-(0.51%) (126,428,148)
================================================================
NET ASSETS-100.00% $24,977,061,625
________________________________________________________________
================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated issuers are those in which the Fund's holdings of an issuer
represent 5% or more of the outstanding voting securities of the issuer.
The Fund has not owned enough of the outstanding voting securities of the
issuer to have control (as defined in the Investment Company Act of 1940)
of that issuer. The aggregate market value of these securities as of
12/31/00 was $2,670,342,488, which represented 10.69% of the Fund's net
assets.
(c) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 8.
(d) The interest rate shown represents the rate of discount paid or received at
the time of purchase by the Fund.
(e) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-85
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost
$22,192,491,152)* $25,103,489,773
-------------------------------------------------------------
Receivables for:
Investments sold 30,839,098
-------------------------------------------------------------
Fund shares sold 36,369,892
-------------------------------------------------------------
Dividends and interest 20,639,594
-------------------------------------------------------------
Investment for deferred compensation plan 290,402
-------------------------------------------------------------
Collateral for securities loaned 232,476,600
-------------------------------------------------------------
Other assets 1,345,793
=============================================================
Total assets 25,425,451,152
=============================================================
LIABILITIES:
Payables for:
Investments purchased 8,549,542
-------------------------------------------------------------
Fund shares reacquired 97,664,758
-------------------------------------------------------------
Foreign currency contracts closed 1,262,901
-------------------------------------------------------------
Foreign currency contracts outstanding 30,173,628
-------------------------------------------------------------
Options written (premiums received
$76,053,069) 26,613,562
-------------------------------------------------------------
Deferred compensation plan 290,402
-------------------------------------------------------------
Collateral upon return of securities
loaned 232,476,600
-------------------------------------------------------------
Variation margin 10,123,750
-------------------------------------------------------------
Accrued advisory fees 11,696,287
-------------------------------------------------------------
Accrued administrative services fees 72,051
-------------------------------------------------------------
Accrued distribution fees 24,932,256
-------------------------------------------------------------
Accrued transfer agent fees 2,806,943
-------------------------------------------------------------
Accrued operating expenses 1,726,847
=============================================================
Total liabilities 448,389,527
=============================================================
Net assets applicable to shares
outstanding $24,977,061,625
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $11,223,503,824
_____________________________________________________________
=============================================================
Class B $12,491,365,831
_____________________________________________________________
=============================================================
Class C $ 1,262,191,970
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 897,295,063
_____________________________________________________________
=============================================================
Class B 1,045,872,965
_____________________________________________________________
=============================================================
Class C 105,625,942
_____________________________________________________________
=============================================================
Class A :
Net asset value and redemption price per
share $ 12.51
-------------------------------------------------------------
Offering price per share: (Net asset
value of $12.51 divided by 94.50%) $ 13.24
_____________________________________________________________
=============================================================
Class B :
Net asset value and offering price per
share $ 11.94
_____________________________________________________________
=============================================================
Class C :
Net asset value and offering price per
share $ 11.95
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended December 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
of $1,503,487) $ 105,653,472
-------------------------------------------------------------
Dividends from affiliated money market
funds 146,120,135
-------------------------------------------------------------
Interest 292,589
-------------------------------------------------------------
Security lending 88,707
=============================================================
Total investment income 252,154,903
=============================================================
EXPENSES:
Advisory fees 178,352,446
-------------------------------------------------------------
Administrative services fees 959,833
-------------------------------------------------------------
Custodian fees 1,232,008
-------------------------------------------------------------
Distribution fees -- Class A 31,857,597
-------------------------------------------------------------
Distribution fees -- Class B 144,649,550
-------------------------------------------------------------
Distribution fees -- Class C 12,863,973
-------------------------------------------------------------
Transfer agent fees -- Class A 15,459,549
-------------------------------------------------------------
Transfer agent fees -- Class B 21,540,954
-------------------------------------------------------------
Transfer agent fees -- Class C 1,915,680
-------------------------------------------------------------
Trustee's fees 64,711
-------------------------------------------------------------
Other 9,067,864
=============================================================
Total expenses 417,964,165
=============================================================
Less: Fees waived (11,485,909)
-------------------------------------------------------------
Expenses paid indirectly (500,490)
=============================================================
Net expenses 405,977,766
=============================================================
Net investment income (loss) (153,822,863)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCY
CONTRACTS, FUTURES CONTRACTS AND OPTION
CONTRACTS
Net realized gain (loss) from:
Investment securities 1,534,916,534
-------------------------------------------------------------
Foreign currency contracts 273,598,057
-------------------------------------------------------------
Futures contracts (8,346,967)
-------------------------------------------------------------
Option contracts written 2,054,630
=============================================================
1,802,222,254
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (6,232,949,524)
-------------------------------------------------------------
Foreign currency contracts (99,122,605)
-------------------------------------------------------------
Futures contracts (10,808,068)
-------------------------------------------------------------
Option contracts written 49,439,507
=============================================================
(6,293,440,690)
=============================================================
Net gain (loss) from investment
securities, foreign currency contracts,
futures contracts and option contracts (4,491,218,436)
=============================================================
Net increase (decrease) in net assets
resulting from operations $(4,645,041,299)
_____________________________________________________________
=============================================================
|
* At December 31, 2000, securities with an aggregate market value of $203,320,677 were on loan to brokers.
See Notes to Financial Statements.
FS-86
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 2000 and 1999
2000 1999
--------------- ---------------
OPERATIONS:
Net investment income (loss) $ (153,822,863) $ (115,945,323)
------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currency contracts, futures contracts and option
contracts 1,802,222,254 2,580,583,708
------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currency contracts,
futures contracts and option contracts (6,293,440,690) 3,559,362,924
================================================================================================
Net increase (decrease) in net assets resulting from
operations (4,645,041,299) 6,024,001,309
================================================================================================
Distributions to shareholders from net realized gains:
Class A (1,074,794,698) (788,853,278)
------------------------------------------------------------------------------------------------
Class B (1,247,299,950) (918,638,257)
------------------------------------------------------------------------------------------------
Class C (126,240,715) (52,550,069)
------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,670,331,026 1,781,344,407
------------------------------------------------------------------------------------------------
Class B 1,786,995,772 2,515,709,918
------------------------------------------------------------------------------------------------
Class C 774,093,169 562,747,820
================================================================================================
Net increase (decrease) in net assets (2,861,956,695) 9,123,761,850
================================================================================================
NET ASSETS:
Beginning of year 27,839,018,320 18,715,256,470
================================================================================================
End of year $24,977,061,625 $27,839,018,320
________________________________________________________________________________________________
================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $22,036,509,303 $17,884,938,370
------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (751,164) (577,334)
------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currency contracts, futures
contracts and option contracts 21,847,054 741,760,162
------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currency contracts, futures contracts and option
contracts 2,919,456,432 9,212,897,122
================================================================================================
$24,977,061,625 $27,839,018,320
________________________________________________________________________________________________
================================================================================================
|
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve long-term growth of capital. Income is a secondary objective.
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
FS-87
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 December 31, 2000, undistributed net investment income (loss) was
increased by $153,649,033, undistributed net realized gains decreased by
$73,799,999, and paid-in capital decreased by $79,849,034 as a result of
differences due to utilization of a portion of the proceed from redemptions
as distributions for federal income tax purposes 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 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.
Outstanding foreign currency contracts at December 31, 2000 were as follows:
CONTRACT TO UNREALIZED
SETTLEMENT -------------------------- APPRECIATION
DATE CURRENCY DELIVER RECEIVE VALUE (DEPRECIATION)
---------- -------- ----------- ------------ ------------ --------------
02/28/01 CAD 185,750,000 $121,088,657 $123,971,907 $ (2,883,250)
---------------------------------------------------------------------------------
02/28/01 CAD 121,000,000 78,878,748 80,756,935 (1,878,187)
---------------------------------------------------------------------------------
02/28/01 CAD 107,500,000 70,123,940 71,746,864 (1,622,924)
---------------------------------------------------------------------------------
02/28/01 CAD 69,500,000 45,313,183 46,385,182 (1,071,999)
---------------------------------------------------------------------------------
02/28/01 CAD 183,000,000 119,389,354 122,136,522 (2,747,168)
---------------------------------------------------------------------------------
02/28/01 EUR 34,650,000 29,502,050 32,624,049 (3,121,999)
---------------------------------------------------------------------------------
02/28/01 EUR 60,350,000 51,623,390 56,821,396 (5,198,006)
---------------------------------------------------------------------------------
02/28/01 EUR 60,000,000 51,193,200 56,491,860 (5,298,660)
---------------------------------------------------------------------------------
03/02/01 EUR 95,000,000 83,533,500 89,452,285 (5,918,785)
---------------------------------------------------------------------------------
03/02/01 EUR 50,000,000 46,647,500 47,080,150 (432,650)
=================================================================================
966,750,000 $697,293,522 $727,467,150 $(30,173,628)
_________________________________________________________________________________
=================================================================================
|
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.
FS-88
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 and certain transfer agency
expenses directly attributable to a class of shares are charged to those
classes' operations. All other expenses which are attributable to more than
one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.80% of the first
$150 million of the Fund's average daily net assets, plus 0.625% of the Fund's
average daily net assets in excess of $150 million. Effective July 1, 2000, AIM
has agreed to waive advisory fees payable by the Fund to AIM at the annual rate
of 0.025% for each $5 billion increment in net assets over $5 billion, up to a
maximum waiver of 0.175% on net assets in excess of $35 billion. AIM had
previously agreed to waive advisory fees payable by the Fund to AIM at the
annual rate of 0.025% of the Fund's average daily net assets in excess of $2
billion. During the year ended December 31, 2000, AIM waived fees of
$11,485,909.
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 December 31, 2000, AIM was
paid $959,833 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 December 31, 2000, AFS was
paid $21,601,925 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund ,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended December 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $31,857,597,
$144,649,550 and $12,863,973, respectively, as compensation under the Plans.
AIM Distributors received commissions of $6,912,097 from sales of the Class A
shares of the Fund during the year ended December 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 December 31, 2000,
AIM Distributors received $1,003,943 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-89
During the year ended December 31, 2000, the Fund paid legal fees of $53,532 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the year ended December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $451,199 and reductions in custodian fees of $49,291 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $500,490.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the year ended December 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 6-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 December 31, 2000, securities with an aggregate value of $203,320,677 were
on loan to brokers. The loans were secured by cash collateral of $232,476,600
received by the Fund and invested in STIC Liquid Assets Portfolio, an affiliated
money market fund. For the year ended December 31, 2000, the Fund received fees
of $88,707 for securities lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 2000 was
$20,006,959,576 and $17,680,938,320, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 4,640,716,021 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (1,774,776,483) ========================================================= Net unrealized appreciation of investment securities $ 2,865,939,538 _________________________________________________________ ========================================================= |
Cost of investments for tax purposes is $22,237,550,235.
NOTE 8-FUTURES CONTRACTS
On December 31, 2000, $46,355,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- ---------- ------------ --------------
S&P 500 Index 2225 March 01 $742,593,750 $(10,808,068)
_____________________________________________________________________________
=============================================================================
|
NOTE 9-CALL OPTION CONTRACTS
Transactions in call options written during the year ended December 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
Beginning of year -- $ --
--------------------------------------------------------------------
Written 108,390 83,894,745
--------------------------------------------------------------------
Exercised (12,000) (5,787,045)
--------------------------------------------------------------------
Expired (10,000) (2,054,631)
====================================================================
End of year 86,390 $76,053,069
____________________________________________________________________
====================================================================
|
FS-90
NOTE 9-CALL OPTION CONTRACTS (CONTINUED)
Open call option contracts written as of December 31, 2000 were as follows:
DECEMBER 31,
CONTRACT STRIKE NUMBER OF PREMIUMS 2000 UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE APPRECIATION
----- -------- ------ --------- ----------- ------------ ------------
Guidant Corp. Jan-01 $50.00 25,000 $26,503,863 $12,343,750 $14,160,113
--------------------------------------------------------------------------------------------------------------------------
Guidant Corp. Jan-01 65.00 12,390 12,306,451 232,312 12,074,139
--------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co. Jan-01 70.00 32,000 26,673,189 8,300,000 18,373,189
--------------------------------------------------------------------------------------------------------------------------
Nokia Corp. Jan-01 42.50 17,000 10,569,566 5,737,500 4,832,066
==========================================================================================================================
86,390 $76,053,069 $26,613,562 $49,439,507
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
NOTE 10-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 2000 and 1999 were as follows:
2000 1999
-------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- --------------- ----------- ---------------
Sold:
Class A 630,010,408 $ 3,156,759,316 65,309,195 $ 2,905,872,208
------------------------------------------------------------------------------------------------------------------------------
Class B 703,853,509 2,552,273,834 67,138,813 2,915,628,481
------------------------------------------------------------------------------------------------------------------------------
Class C 87,455,815 904,931,025 13,738,072 600,569,156
==============================================================================================================================
Issued as reinvestment of dividends:
Class A 83,714,399 1,028,837,590 16,150,747 754,887,097
------------------------------------------------------------------------------------------------------------------------------
Class B 99,085,297 1,163,271,351 19,043,747 860,577,418
------------------------------------------------------------------------------------------------------------------------------
Class C 10,150,935 119,273,711 1,098,977 49,675,082
==============================================================================================================================
Reacquired:
Class A (75,280,734) (2,515,265,880) (42,137,878) (1,879,414,898)
------------------------------------------------------------------------------------------------------------------------------
Class B (60,835,163) (1,928,549,413) (29,076,106) (1,260,495,981)
------------------------------------------------------------------------------------------------------------------------------
Class C (10,212,288) (250,111,567) (2,008,443) (87,496,418)
==============================================================================================================================
1,467,942,178 $ 4,231,419,967 109,257,124 $ 4,859,802,145
______________________________________________________________________________________________________________________________
==============================================================================================================================
|
NOTE 11-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
---------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
2000(a)(b) 1999(a) 1998(a) 1997(a) 1996(a)(b)
----------- ----------- ---------- ---------- ----------
Net asset value, beginning of period $ 16.28 $ 13.40 $ 10.81 $ 9.72 $ 8.94
----------------------------------------------------- ----------- ----------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.04) (0.01) 0.03 0.05 0.14
----------------------------------------------------- ----------- ----------- ---------- ---------- ----------
Net gains (losses) on securities (both realized and
unrealized) (2.42) 3.97 3.46 2.26 1.14
===================================================== =========== =========== ========== ========== ==========
Total from investment operations (2.46) 3.96 3.49 2.31 1.28
===================================================== =========== =========== ========== ========== ==========
Less distributions:
Dividends from net investment income -- -- (0.03) (0.01) (0.13)
----------------------------------------------------- ----------- ----------- ---------- ---------- ----------
Distributions from net realized gains (1.31) (1.08) (0.87) (1.21) (0.37)
===================================================== =========== =========== ========== ========== ==========
Total distributions (1.31) (1.08) (0.90) (1.22) (0.50)
===================================================== =========== =========== ========== ========== ==========
Net asset value, end of period $ 12.51 $ 16.28 $ 13.40 $ 10.81 $ 9.72
_____________________________________________________ ___________ ___________ __________ __________ __________
===================================================== =========== =========== ========== ========== ==========
Total return(c) (14.95)% 29.95% 32.76% 23.95% 14.52%
_____________________________________________________ ___________ ___________ __________ __________ __________
===================================================== =========== =========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $11,223,504 $12,640,073 $8,823,094 $6,745,253 $5,100,061
_____________________________________________________ ___________ ___________ __________ __________ __________
===================================================== =========== =========== ========== ========== ==========
Ratio of expenses to average net assets:
With fee waivers 1.00%(d) 1.00% 1.00% 1.04% 1.11%
----------------------------------------------------- ----------- ----------- ---------- ---------- ----------
Without fee waivers 1.04%(d) 1.02% 1.02% 1.06% 1.13%
===================================================== =========== =========== ========== ========== ==========
Ratio of net investment income (loss) to average net
assets (0.11)%(d) (0.09)% 0.26% 0.57% 1.65%
_____________________________________________________ ___________ ___________ __________ __________ __________
===================================================== =========== =========== ========== ========== ==========
Portfolio turnover rate 67% 66% 113% 137% 126%
_____________________________________________________ ___________ ___________ __________ __________ __________
===================================================== =========== =========== ========== ========== ==========
|
(a) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend on November 10,
2000.
(b) Calculated using average shares outstanding.
(c) Does not include sales charges.
(d) Ratios are based on average daily net assets of $12,743,038,992.
FS-91
NOTE 11-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
2000(a)(b) 1999(a)(b) 1998(a) 1997(a) 1996(a)(b)
----------- ----------- ---------- ---------- ----------
Net asset value, beginning of period $ 15.73 $ 13.08 $ 10.63 $ 9.64 $ 8.88
------------------------------------------------------ ----------- ----------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.31) (0.13) (0.06) (0.02) 0.07
------------------------------------------------------ ----------- ----------- ---------- ---------- ----------
Net gains (losses) on securities (both realized and
unrealized) (2.17) 3.86 3.38 2.22 1.13
====================================================== =========== =========== ========== ========== ==========
Total from investment operations (2.48) 3.73 3.32 2.20 1.20
====================================================== =========== =========== ========== ========== ==========
Less distributions:
Dividends from net investment income -- -- -- -- (0.07)
------------------------------------------------------ ----------- ----------- ---------- ---------- ----------
Distributions from net realized gains (1.31) (1.08) (0.87) (1.21) (0.37)
====================================================== =========== =========== ========== ========== ==========
Total distributions (1.31) (1.08) (0.87) (1.21) (0.44)
====================================================== =========== =========== ========== ========== ==========
Net asset value, end of period $ 11.94 $ 15.73 $ 13.08 $ 10.63 $ 9.64
______________________________________________________ ___________ ___________ __________ __________ __________
====================================================== =========== =========== ========== ========== ==========
Total return(c) (15.65)% 28.94% 31.70% 22.96% 13.57%
______________________________________________________ ___________ ___________ __________ __________ __________
====================================================== =========== =========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $12,491,366 $14,338,087 $9,680,068 $6,831,796 $4,875,933
______________________________________________________ ___________ ___________ __________ __________ __________
====================================================== =========== =========== ========== ========== ==========
Ratio of expenses to average net assets:
With fee waivers 1.77%(d) 1.79% 1.80% 1.85% 1.94%
------------------------------------------------------ ----------- ----------- ---------- ---------- ----------
Without fee waivers 1.81%(d) 1.81% 1.82% 1.87% 1.96%
====================================================== =========== =========== ========== ========== ==========
Ratio of net investment income (loss) to average net
assets (0.89)%(d) (0.88)% (0.54)% (0.24)% 0.82%
______________________________________________________ ___________ ___________ __________ __________ __________
====================================================== =========== =========== ========== ========== ==========
Portfolio turnover rate 67% 66% 113% 137% 126%
______________________________________________________ ___________ ___________ __________ __________ __________
====================================================== =========== =========== ========== ========== ==========
|
(a) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend on November 10,
2000.
(b) Calculated using average shares outstanding.
(c) Does not include contingent deferred sales charges.
(d) Ratios are based on average daily net assets of $14,464,954,977.
CLASS C
----------------------------------------------------------
AUGUST 4, 1997
(DATE OPERATIONS
YEAR ENDED DECEMBER 31, COMMENCED) TO
-------------------------------------- DECEMBER 31,
2000(a)(b) 1999(a)(b) 1998(a)(b) 1997(a)
---------- ---------- ---------- ----------------
Net asset value, beginning of period $ 15.74 $ 13.09 $ 10.63 $ 11.86
----------------------------------------------------- ---------- -------- -------- -------
Income from investment operations:
Net investment income (loss) (0.31) (0.13) (0.06) --
----------------------------------------------------- ---------- -------- -------- -------
Net gains (losses) on securities (both realized and
unrealized) (2.17) 3.86 3.39 (0.02)
===================================================== ========== ======== ======== =======
Total from investment operations (2.48) 3.73 3.33 (0.02)
===================================================== ========== ======== ======== =======
Less distributions:
Distributions from net realized gains (1.31) (1.08) (0.87) (1.21)
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
Total distributions (1.31) (1.08) (0.87) (1.21)
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
Net asset value, end of period $ 11.95 $ 15.74 $ 13.09 $ 10.63
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
Total return(c) (15.62)% 28.92% 31.72% (0.08)%
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,262,192 $860,859 $212,095 $32,900
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
Ratio of expenses to average net assets:
With fee waivers 1.77%(d) 1.79% 1.80% 1.84%(e)
----------------------------------------------------- ---------- -------- -------- -------
Without fee waivers 1.81%(d) 1.81% 1.82% 1.86%(e)
===================================================== ========== ======== ======== =======
Ratio of net investment loss to average net assets (0.88)%(d) (0.88)% (0.54)% (0.23)%(e)
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
Portfolio turnover rate 67% 66% 113% 137%
_____________________________________________________ __________ ________ ________ _______
===================================================== ========== ======== ======== =======
|
(a) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend on November 10,
2000.
(b) Calculated using average shares outstanding.
(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 $1,286,397,337.
(e) Annualized.
FS-92
NOTE 12-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence, KPMG LLP resigned as Fund auditors on December 28, 2000. The Board
of Trustees of the Trust, upon recommendation of its Audit Committee, accepted
the resignation of KPMG LLP and appointed PricewaterhouseCoopers LLP as
independent public accountants to audit the financial statements of the Fund.
KPMG LLP had served as independent public accountants for the two years ended
December 31, 1999. The audit reports of KPMG LLP on the financial statements of
the Fund for the two years ended December 31, 1999 did not contain any adverse
opinions or disclaimer of opinions, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. In connection with the
audits for the two years ended December 31, 1999, there were no disagreements
with KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinions that might be rendered on
the Fund's financial statements.
FS-93
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Value II Fund
and Board of Trustees of AIM Funds Group:
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 Value II Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-94
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-72.64%
BANKS (MAJOR REGIONAL)-2.24%
Bank of New York Co., Inc. (The) 60,400 $ 3,333,325
===================================================================
BIOTECHNOLOGY-0.07%
Ciphergen Biosystems, Inc.(a) 8,350 110,637
===================================================================
BROADCASTING (TELEVISION, RADIO & CABLE)-6.57%
Charter Communications, Inc.-Class A(a) 210,300 4,771,181
-------------------------------------------------------------------
Comcast Corp.-Class A(a) 43,300 1,807,775
-------------------------------------------------------------------
General Motors Corp.-Class H(a) 34,500 793,500
-------------------------------------------------------------------
Univision Communications Inc.-Class A(a) 58,500 2,394,844
===================================================================
9,767,300
===================================================================
COMMUNICATIONS EQUIPMENT-2.97%
ADC Telecommunications, Inc.(a) 27,300 494,812
-------------------------------------------------------------------
Comverse Technology, Inc.(a) 20,400 2,215,950
-------------------------------------------------------------------
Proxim, Inc.(a) 15,400 662,200
-------------------------------------------------------------------
Scientific-Atlanta, Inc. 32,300 1,051,769
===================================================================
4,424,731
===================================================================
COMPUTERS (HARDWARE)-1.34%
Compaq Computer Corp. 86,000 1,294,300
-------------------------------------------------------------------
Sun Microsystems, Inc.(a) 24,800 691,300
===================================================================
1,985,600
===================================================================
COMPUTERS (NETWORKING)-1.21%
Cisco Systems, Inc.(a) 47,200 1,805,400
===================================================================
COMPUTERS (PERIPHERALS)-1.27%
EMC Corp.(a) 28,500 1,895,250
===================================================================
COMPUTERS (SOFTWARE & SERVICES)-4.95%
BEA Systems, Inc.(a) 28,700 1,931,869
-------------------------------------------------------------------
Oracle Corp.(a) 45,900 1,333,969
-------------------------------------------------------------------
PeopleSoft, Inc.(a) 80,700 3,001,031
-------------------------------------------------------------------
VERITAS Software Corp.(a) 12,600 1,102,500
===================================================================
7,369,369
===================================================================
CONSUMER FINANCE-2.69%
Capital One Financial Corp. 36,700 2,415,319
-------------------------------------------------------------------
Providian Financial Corp. 27,700 1,592,750
===================================================================
4,008,069
===================================================================
ELECTRICAL EQUIPMENT-0.36%
EchoStar Communications Corp.(a) 23,500 534,625
===================================================================
ELECTRONICS (SEMICONDUCTORS)-1.28%
Analog Devices, Inc.(a) 9,500 486,281
-------------------------------------------------------------------
Microchip Technology Inc.(a) 47,000 1,031,062
-------------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 6,900 381,656
===================================================================
1,898,999
===================================================================
EQUIPMENT (SEMICONDUCTOR)-0.42%
Teradyne, Inc.(a) 16,800 625,800
===================================================================
FINANCIAL (DIVERSIFIED)-5.24%
American Express Co. 20,200 1,109,737
-------------------------------------------------------------------
FINANCIAL (DIVERSIFIED)
Citigroup Inc. 67,400 $ 3,441,612
-------------------------------------------------------------------
J.P. Morgan & Co., Inc. 4,700 777,850
-------------------------------------------------------------------
SEI Investments Co. 7,800 873,600
-------------------------------------------------------------------
State Street Corp. 12,800 1,589,888
===================================================================
7,792,687
===================================================================
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-3.96%
Allergan, Inc. 20,300 1,965,294
-------------------------------------------------------------------
Pfizer Inc. 85,400 3,928,400
===================================================================
5,893,694
===================================================================
HEALTH CARE (MANAGED CARE)-2.70%
CIGNA Corp. 17,300 2,288,790
-------------------------------------------------------------------
Wellpoint Health Networks Inc.(a) 15,000 1,728,750
===================================================================
4,017,540
===================================================================
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.56%
Baxter International, Inc. 26,300 2,322,619
===================================================================
HEALTH CARE (SPECIALIZED SERVICES)-1.76%
Quest Diagnostics Inc.(a) 18,400 2,612,800
===================================================================
INVESTMENT BANKING/BROKERAGE-5.21%
Lehman Brothers Holdings Inc. 62,100 4,199,512
-------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 26,000 2,060,500
-------------------------------------------------------------------
TD Waterhouse Group, Inc.(a) 112,900 1,495,925
===================================================================
7,755,937
===================================================================
INVESTMENT MANAGEMENT-0.19%
Stilwell Financial, Inc. 7,200 283,950
===================================================================
NATURAL GAS-3.19%
Dynegy Inc.-Class A 46,400 2,601,300
-------------------------------------------------------------------
Enron Corp. 25,700 2,136,313
===================================================================
4,737,613
===================================================================
OIL & GAS (DRILLING & EQUIPMENT)-4.26%
ENSCO International Inc. 55,900 1,904,094
-------------------------------------------------------------------
Transocean Sedco Forex Inc. 47,400 2,180,400
-------------------------------------------------------------------
Weatherford International, Inc.(a) 47,500 2,244,375
===================================================================
6,328,869
===================================================================
POWER PRODUCERS (INDEPENDENT)-1.50%
AES Corp. (The)(a) 40,300 2,231,613
===================================================================
RETAIL (COMPUTERS & ELECTRONICS)-1.14%
Best Buy Co., Inc.(a) 15,200 449,350
-------------------------------------------------------------------
CDW Computer Centers, Inc.(a) 12,000 334,500
-------------------------------------------------------------------
RadioShack Corp. 21,300 911,906
===================================================================
1,695,756
===================================================================
RETAIL (DISCOUNTERS)-0.79%
Dollar Tree Stores, Inc.(a) 47,900 1,173,550
===================================================================
RETAIL (DRUG STORES)-1.12%
Walgreen Co. 40,000 1,672,500
===================================================================
|
FS-95
MARKET
SHARES VALUE
RETAIL (GENERAL MERCHANDISE)-0.73%
Target Corp. 33,500 $ 1,080,375
===================================================================
SERVICES (ADVERTISING/MARKETING)-3.11%
Interpublic Group of Companies, Inc.
(The) 32,600 1,387,538
-------------------------------------------------------------------
Omnicom Group Inc. 39,100 3,240,413
===================================================================
4,627,951
===================================================================
SERVICES (DATA PROCESSING)-6.04%
Automatic Data Processing, Inc. 29,900 1,893,044
-------------------------------------------------------------------
BISYS Group, Inc. (The)(a) 13,700 714,113
-------------------------------------------------------------------
Concord EFS, Inc.(a) 80,100 3,519,394
-------------------------------------------------------------------
First Data Corp. 54,100 2,850,394
===================================================================
8,976,945
===================================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-4.45%
Nextel Communications, Inc.-Class A(a) 78,200 1,935,450
-------------------------------------------------------------------
Nextel Partners, Inc.-Class A(a) 173,700 2,920,331
-------------------------------------------------------------------
Openwave Systems Inc.(a) 36,800 1,764,100
===================================================================
6,619,881
===================================================================
TELECOMMUNICATIONS (LONG DISTANCE)-0.32%
Corvis Corp.(a) 20,100 478,631
===================================================================
Total Domestic Common Stocks
(Cost $111,898,817) 108,062,016
===================================================================
FOREIGN STOCKS & OTHER
EQUITY INTERESTS-13.58%
BERMUDA-2.57%
Tyco International Ltd. (Manufacturing-
Diversified) 68,800 3,818,400
===================================================================
CANADA-2.75%
Celestica Inc.
(Electronics-Semiconductors)(a) 50,500 2,739,625
-------------------------------------------------------------------
Nortel Networks Corp. (Communications
Equipment) 42,200 1,353,037
===================================================================
4,092,662
===================================================================
FINLAND-0.98%
Nokia Oyj-ADR (Communications Equipment) 33,400 1,452,900
===================================================================
IRELAND-1.79%
Elan Corp. PLC -ADR (Health Care-Drugs-
Generic & Other)(a) 57,000 2,668,313
===================================================================
NETHERLANDS-0.80%
ASM Lithography Holding N.V.-New York
Shares (Electronics-Semiconductor)(a) 52,800 1,191,300
===================================================================
SINGAPORE-0.93%
Flextronics International Ltd.
(Manufacturing-Specialized)(a) 48,700 1,387,950
===================================================================
UNITED KINGDOM-3.76%
Amdocs Ltd.
(Telecommunications-Cellular/
Wireless)(a) 56,300 3,729,875
-------------------------------------------------------------------
Shire Pharmaceuticals Group PLC-ADR
(Health Care-Drugs-Generic & Other)(a) 40,500 1,865,531
===================================================================
5,595,406
===================================================================
Total Foreign Stocks & Other Equity
Interests
(Cost $22,316,483) 20,206,931
===================================================================
|
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.67%
U.S. TREASURY BILLS-0.67%
6.16%, 03/01/01(b)(c) $ 500,000 495,630
-------------------------------------------------------------------
5.77%, 03/22/01(b)(c) 500,000 493,950
===================================================================
Total U.S. Treasury Securities
(Cost $989,081) 989,580
===================================================================
MONEY MARKET FUNDS-15.13%
STIC Liquid Assets Portfolio(d) 11,249,242 11,249,242
-------------------------------------------------------------------
STIC Prime Portfolio(d) 11,249,242 11,249,242
===================================================================
Total Money Market Funds
(Cost $22,498,484) 22,498,484
===================================================================
TOTAL INVESTMENTS-102.02%
(Cost $157,702,865) 151,757,011
===================================================================
LIABILITIES LESS OTHER ASSETS-(2.02%) (2,998,411)
===================================================================
NET ASSETS-100.00% $148,758,600
___________________________________________________________________
===================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 7.
(c) The interest rate shown represents the rate of discount paid or received at
the time of purchase by the Fund.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-96
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (cost $157,702,865) $151,757,011
---------------------------------------------------------------
Receivables for:
Fund shares sold 4,409,406
---------------------------------------------------------------
Dividends 167,225
---------------------------------------------------------------
Investment for deferred compensation plan 2,550
---------------------------------------------------------------
Other assets 118,213
===============================================================
Total assets $156,454,405
===============================================================
LIABILITIES:
Payables for:
Investments purchased 6,858,794
---------------------------------------------------------------
Fund shares reacquired 470,300
---------------------------------------------------------------
Deferred compensation plan 2,550
---------------------------------------------------------------
Variation margin 54,600
---------------------------------------------------------------
Accrued advisory fees 37,793
---------------------------------------------------------------
Accrued administrative services fees 4,235
---------------------------------------------------------------
Accrued distribution fees 110,154
---------------------------------------------------------------
Accrued transfer agent fees 29,636
---------------------------------------------------------------
Accrued operating expenses 127,743
---------------------------------------------------------------
Total liabilities 7,695,805
---------------------------------------------------------------
Net assets applicable to shares outstanding $148,758,600
---------------------------------------------------------------
NET ASSETS:
Class A $55,409,420
---------------------------------------------------------------
Class B $62,791,852
---------------------------------------------------------------
Class C $30,557,328
---------------------------------------------------------------
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 6,416,683
---------------------------------------------------------------
Class B 7,288,940
---------------------------------------------------------------
Class C 3,546,815
---------------------------------------------------------------
CLASS A:
Net asset value and redemption price per share $ 8.64
---------------------------------------------------------------
Offering price per share:
(Net asset value of $8.64 DIVIDED BY 94.50%) $ 9.14
---------------------------------------------------------------
CLASS B:
Net asset value and offering price per share $ 8.61
---------------------------------------------------------------
CLASS C:
Net asset value and offering price per share $ 8.62
---------------------------------------------------------------
|
STATEMENT OF OPERATIONS
For the period August 31, 2000 (date operations commenced) to December 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $56) $ 77,177
--------------------------------------------------------------
Dividends from affiliated money market funds 233,987
--------------------------------------------------------------
Interest 55,755
==============================================================
Total investment income 366,919
==============================================================
EXPENSES:
Advisory fees 184,046
--------------------------------------------------------------
Administrative services fees 16,667
--------------------------------------------------------------
Custodian fees 22,535
--------------------------------------------------------------
Distribution fees -- Class A 35,220
--------------------------------------------------------------
Distribution fees -- Class B 100,325
--------------------------------------------------------------
Distribution fees -- Class C 44,441
--------------------------------------------------------------
Transfer agent fees -- Class A 22,514
--------------------------------------------------------------
Transfer agent fees -- Class B 27,475
--------------------------------------------------------------
Transfer agent fees -- Class C 12,170
--------------------------------------------------------------
Trustee's fees 3,133
--------------------------------------------------------------
Registration and filing fees 79,052
--------------------------------------------------------------
Other 45,752
==============================================================
Total expenses 593,330
==============================================================
Less: Fees waived (146,253)
==============================================================
Expenses paid indirectly (2,680)
--------------------------------------------------------------
Net expenses 444,397
==============================================================
Net investment income (loss) (77,478)
==============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FUTURES CONTRACTS
Net realized gain (loss) from:
Investment securities (2,505,556)
--------------------------------------------------------------
Futures contracts 68,916
==============================================================
(2,436,640)
==============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (5,945,854)
--------------------------------------------------------------
Futures contracts (152,109)
==============================================================
(6,097,963)
==============================================================
Net gain (loss) from investment securities
and futures contracts (8,534,603)
______________________________________________________________
==============================================================
Net increase (decrease) in net assets resulting
from operations $(8,612,081)
______________________________________________________________
==============================================================
|
See Notes to Financial Statements.
FS-97
STATEMENT OF CHANGES IN NET ASSETS
For the period August 31, 2000 (date operations commenced) to December 31, 2000
2000
------------
OPERATIONS:
Net investment income (loss) $ (77,478)
----------------------------------------------------------------
Net realized gain (loss) from investment
securities and futures contracts (2,436,640)
----------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities and
futures contracts (6,097,963)
================================================================
Net increase (decrease) in net assets
resulting from operations (8,612,081)
================================================================
Distributions to shareholders from net realized
gains:
Class A (62,905)
----------------------------------------------------------------
Class B (71,403)
----------------------------------------------------------------
Class C (35,183)
----------------------------------------------------------------
Share transactions-net:
Class A 59,053,644
----------------------------------------------------------------
Class B 66,427,674
----------------------------------------------------------------
Class C 32,058,854
----------------------------------------------------------------
Net increase in net assets 148,758,600
================================================================
NET ASSETS:
Beginning of period --
================================================================
End of period $148,758,600
________________________________________________________________
================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $157,528,805
----------------------------------------------------------------
Undistributed net investment income (loss) (26,778)
----------------------------------------------------------------
Undistributed net realized gain (loss) from
investment securities and futures contracts (2,645,464)
----------------------------------------------------------------
Unrealized appreciation (depreciation) of
investment securities and futures contracts (6,097,963)
----------------------------------------------------------------
$148,758,600
________________________________________________________________
================================================================
|
See Notes to Financial Statements.
FS-98
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value II Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of ten separate portfolios, each having
an unlimited number of shares of beneficial interest. The Fund commenced
operations on August 31, 2000. The Fund currently offers three different classes
of shares: Class A shares, Class B shares and Class C shares. Class A shares are
sold with a front-end sales charge. Class B shares and Class C shares are sold
with a contingent deferred sales charge. Matters affecting each portfolio or
class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is to achieve 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. On December 31, 2000, undistributed net investment income (loss) was increased by $50,700, undistributed net realized gains decreased by $39,333 and paid-in capital decreased by $11,367 as a result of differing book/tax treatment of initial stock issuance costs 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. 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
FS-99
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.
F. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.75% of the Funds
average daily net assets. During the period August 31, 2000 (date operation
commenced) through December 31, 2000, AIM waived fees of $146,253.
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 period August 31, 2000 (date operations
commenced) through December 31, 2000, AIM was paid $16,667 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 period August 31, 2000 (date
operations commenced) through December 31, 2000, AFS was paid $21,404 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
0.35% 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 period August 31,
2000 (date operations commenced) through December 31, 2000, the Class A,
Class B and Class C shares paid AIM Distributors $35,220, $100,325 and $44,441,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $130,652 from sales of the Class A
shares of the Fund during the period August 31, 2000 (date operations commenced)
through December 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 same period, AIM Distributors received $1,234 in
contingent deferred sales charges imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of
AIM, AFS and AIM Distributors.
During the period August 31, 2000 (date operations commenced) through
December 31, 2000, the Fund paid legal fees of $980 for services rendered by
Kramer, Levin, Naftalis & Frankel LLP as counsel to the Board of Trustees. A
member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the period August 31, 2000 (date operations commenced) through December 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $585 and reductions in custodian fees of $2,095 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $2,680.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the period August 31, 2000
through December 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.
FS-100
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the period August 31, 2000 through
December 31, 2000 was $144,516,301 and $7,795,446, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, for tax purposes, as of December 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 7,191,278 ---------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (14,775,693) ================================================================ Net unrealized appreciation (depreciation) of investment securities $ (7,584,415) ________________________________________________________________ ================================================================ |
Cost of investments for tax purposes is $159,341,426.
NOTE 7-FUTURES CONTRACTS
On December 31, 2000, $255,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- -------------- ------------ --------------
S&P 500 12 Mar. 01/Buy $4,005,000 $(152,109)
__________________________________________________________________
==================================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the period August 31, 2000 (date operations commenced) through December 31, 2000 were as follows:
2000
-------------------------
SHARES AMOUNT
----------- ------------
Sold:
Class A 6,803,909 $ 62,419,096
-------------------------------------------------------------------
Class B 7,466,598 67,975,309
-------------------------------------------------------------------
Class C 3,674,621 33,162,044
-------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 7,039 59,975
-------------------------------------------------------------------
Class B 8,075 68,635
-------------------------------------------------------------------
Class C 3,982 33,851
-------------------------------------------------------------------
Reacquired:
Class A (394,265) (3,425,427)
-------------------------------------------------------------------
Class B (185,733) (1,616,270)
-------------------------------------------------------------------
Class C (131,788) (1,137,041)
-------------------------------------------------------------------
17,252,438 $157,540,172
___________________________________________________________________
===================================================================
|
FS-101
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------
AUGUST 31, 2000 (DATE
OPERATIONS COMMENCED)
TO DECEMBER 31,
2000(a)
-----------------------
Net asset value, beginning of period $ 10.00
-------------------------------------------------------------------------
Income from investment operations:
Net gains (losses) on securities (both realized
and unrealized) (1.35)
=========================================================================
Total from investment operations (1.35)
=========================================================================
Less distributions from net realized gains (0.01)
=========================================================================
Net asset value, end of period $ 8.64
_________________________________________________________________________
=========================================================================
Total return(b) (13.49)%
_________________________________________________________________________
=========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $55,409
_________________________________________________________________________
=========================================================================
Ratio of expenses to average net assets:
With fee waivers 1.40%(c)
-------------------------------------------------------------------------
Without fee waivers 2.00%(c)
_________________________________________________________________________
=========================================================================
Ratio of net investment income (loss) to average
net assets 0.10%(c)
_________________________________________________________________________
=========================================================================
Portfolio turnover rate 13%
_________________________________________________________________________
=========================================================================
|
(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 $29,943,124.
FS-102
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
-----------------------
AUGUST 31, 2000 (DATE
OPERATIONS COMMENCED)
TO DECEMBER 31,
2000(a)
-----------------------
Net asset value, beginning of period $ 10.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.02)
-------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (1.36)
=========================================================================
Total from investment operations (1.38)
=========================================================================
Less distributions from net realized gains (0.01)
=========================================================================
Net asset value, end of period $ 8.61
_________________________________________________________________________
=========================================================================
Total return(b) (13.79)%
_________________________________________________________________________
=========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $62,792
_________________________________________________________________________
=========================================================================
Ratio of expenses to average net assets:
With fee waivers 2.10%(c)
-------------------------------------------------------------------------
Without fee waivers 2.70%(c)
=========================================================================
Ratio of net investment income (loss) to average
net assets (0.60)%(c)
_________________________________________________________________________
=========================================================================
Portfolio turnover rate 13%
_________________________________________________________________________
=========================================================================
|
(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 $29,852,870.
FS-103
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-----------------------
AUGUST 31, 2000 (DATE
OPERATIONS COMMENCED)
TO DECEMBER 31,
2000(a)
-----------------------
Net asset value, beginning of period $ 10.00
-------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.02)
-------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (1.35)
=========================================================================
Total from investment operations (1.37)
=========================================================================
Less distributions from net realized gains (0.01)
=========================================================================
Net asset value, end of period $ 8.62
_________________________________________________________________________
=========================================================================
Total return(b) (13.69)%
_________________________________________________________________________
=========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $30,557
_________________________________________________________________________
=========================================================================
Ratio of expenses to average net assets:
With fee waivers 2.10%(c)
-------------------------------------------------------------------------
Without fee waivers 2.70%(c)
_________________________________________________________________________
=========================================================================
Ratio of net investment income (loss) to average
net assets (0.60)%(c)
_________________________________________________________________________
=========================================================================
Portfolio turnover rate 13%
_________________________________________________________________________
=========================================================================
|
(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 $13,223,776.
NOTE 10-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP has
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence, KPMG LLP resigned as Fund auditors on December 28, 2000 prior to
the first fiscal period end of the Fund. The Board of Trustees of the Trust,
upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP
and appointed PricewaterhouseCoopers LLP as independent public accountants to
audit the financial statements of the Fund. There were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed or the type of audit opinions that might be rendered on
the Fund's financial statements.
FS-104
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Worldwide Spectrum Fund
and Board of Trustees of AIM Funds Group:
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 Worldwide Spectrum Fund (the "Fund") at December 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 audit. We conducted our audit 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 audit, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts February 19, 2001 |
FS-105
SCHEDULE OF INVESTMENTS
December 31, 2000
PRINCIPAL MARKET
AMOUNT VALUE
U.S. GOVERNMENT AGENCY SECURITIES-90.09%
FEDERAL HOME LOAN BANK-90.09%
Disc. Notes, 5.62%, 01/02/01(a) (Amortized Cost $999,844) $1,000,000 $ 999,844
=====================================================================================
TOTAL INVESTMENTS-90.09% (Amortized Cost $999,844)(b) 999,844
=====================================================================================
OTHER ASSETS LESS LIABILITIES-9.91% 109,942
=====================================================================================
NET ASSETS-100.00% $1,109,786
_____________________________________________________________________________________
=====================================================================================
|
Investment Abbreviations:
Disc. - Discounted Notes to Schedule of Investments: (a) Traded on a discount basis. (b) Also represents cost for federal income tax purposes. |
See Notes to Financial Statements.
FS-106
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2000
ASSETS:
Investments, at market value (amortized cost
$999,844) $ 999,844
------------------------------------------------------------
Receivables for fund shares sold 109,435
------------------------------------------------------------
Due from advisor 6,088
------------------------------------------------------------
Other assets 723
============================================================
Total assets 1,116,090
============================================================
LIABILITIES:
Accrued administrative services fees 410
------------------------------------------------------------
Accrued distribution fees 29
------------------------------------------------------------
Accrued transfer agent fees 46
------------------------------------------------------------
Accrued operating expenses 5,819
============================================================
Total liabilities 6,304
============================================================
Net assets applicable to shares outstanding $1,109,786
____________________________________________________________
============================================================
NET ASSETS:
Class A $1,109,766
____________________________________________________________
============================================================
Class B $ 10
____________________________________________________________
============================================================
Class C $ 10
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 110,945
____________________________________________________________
============================================================
Class B 1
____________________________________________________________
============================================================
Class C 1
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per share $ 10.00
------------------------------------------------------------
Offering price per share:
(Net asset value of $10.00 divided by
94.50%) $ 10.58
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 10.00
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 10.00
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the period December 29, 2000 (date operations commenced) through December 31, 2000
INVESTMENT INCOME:
Interest $ 468
===========================================================
Total investment income 468
===========================================================
EXPENSES:
Advisory fees 69
-----------------------------------------------------------
Administrative services fees 410
-----------------------------------------------------------
Custodian fees 500
-----------------------------------------------------------
Distribution fees -- Class A 29
-----------------------------------------------------------
Transfer agent fees -- Class A 46
-----------------------------------------------------------
Printing 3,000
-----------------------------------------------------------
Professional Fees 2,000
-----------------------------------------------------------
Other 250
===========================================================
Total expenses 6,304
===========================================================
Less: Fees waived and expenses reimbursed (6,157)
-----------------------------------------------------------
Net expenses 147
===========================================================
Net investment income 321
===========================================================
Net increase in net assets resulting from
operations $ 321
___________________________________________________________
===========================================================
|
See Notes to Financial Statements.
FS-107
STATEMENT OF CHANGES IN NET ASSETS
For the period December 29, 2000 (date operations commenced) through December 31, 2000
2000
----------
OPERATIONS:
Net investment income $ 321
========================================================================
Net increase in net assets resulting from operations 321
========================================================================
Share transactions-net:
Class A 1,109,445
------------------------------------------------------------------------
Class B 10
------------------------------------------------------------------------
Class C 10
========================================================================
Net increase in net assets 1,109,786
========================================================================
NET ASSETS:
Beginning of period --
========================================================================
End of period $1,109,786
________________________________________________________________________
========================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $1,106,465
------------------------------------------------------------------------
Undistributed net investment income 3,321
========================================================================
$1,109,786
________________________________________________________________________
========================================================================
|
See Notes to Financial Statements.
FS-108
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Worldwide Spectrum Fund (the "Fund") is a series portfolio of AIM Funds
Group (the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The Fund commenced operations on
December 29, 2000, however, Class B shares and Class C shares have not commenced
sales. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is to achieve 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.
On December 31, 2000, undistributed net investment income was increased by
$3,000 and paid-in capital decreased by $3,000 as a result of non-deductible
stock issuance costs for federal income tax purposes. 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. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
operations. All other expenses which are attributable to more than one class
are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.85% of the Fund's average daily net
FS-109
assets. For the period December 29, 2000 (date operations commenced) through
December 31, 2000, AIM waived fees of $69 and reimbursed expenses of $6,088.
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 period December 29, 2000 (date
operations commenced) through December 31, 2000, AIM was paid $410 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 period December 29, 2000 (date
operations commenced) through December 31, 2000, AFS was paid $0 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
0.35% 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 period December 29, 2000
(date operations commenced) through December 31, 2000, the Class A shares paid
AIM Distributors $29 as compensation under the Plans.
Certain officers and trustees of the Trust are officers and directors of
AIM, AFS and AIM Distributors.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 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 period December 29, 2000
through December 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-SHARE INFORMATION
Changes in shares outstanding during the period December 29, 2000 (date operations commenced) and December 31, 2000 were as follows:
SHARES AMOUNT
------- ----------
Sold:
Class A 110,945 $1,109,445
-------------------------------------------------------------
Class B 1 10
-------------------------------------------------------------
Class C 1 10
=============================================================
110,947 $1,109,465
_____________________________________________________________
=============================================================
|
NOTE 6-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------
DECEMBER 29, 2000 (DATE
OPERATIONS COMMENCED)
TO DECEMBER 31,
2000
-----------------------
Net asset value, beginning of period $10.00
============================================================
Net asset value, end of period $10.00
============================================================
Total return(a) 0%
____________________________________________________________
============================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $1,110
____________________________________________________________
============================================================
Ratio of expenses to average net
assets:
With fee waivers and expense reimbursements 1.80%(b)
------------------------------------------------------------
Without fee waivers and expense reimbursements 76.90%(b)
____________________________________________________________
============================================================
Ratio of net investment income to
average net assets 3.91%(b)
____________________________________________________________
============================================================
|
(a) Does not include sales charges and is not annualized for periods less than
one year.
(b) Ratios are annualized and based on average daily net assets of $1,000,166.
NOTE 7-CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)
KPMG LLP was previously the independent public accountants for the Fund. Due to
an investment in another fund within The AIM Family of Funds, which KPMG LLP has
represented to the Fund was inadvertent, and new SEC rules regarding auditor
independence KPMG LLP resigned as Fund auditors on December 28, 2000 prior to
the first fiscal period end of the Fund. The Board of Trustees of the Trust,
upon recommendation of its Audit Committee, accepted the resignation of KPMG LLP
and appointed PricewaterhouseCoopers LLP as independent public accountants to
audit the financial statements of the Fund. There were no disagreements with
KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference in
connection with their opinions to the subject matter of the disagreement.
Neither the Fund nor anyone on its behalf consulted with
PricewaterhouseCoopers LLP at any time prior to their engagement with respect to
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinions that might be rendered on
the Fund's financial statements.
FS-110
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
BONDS & NOTES-31.29%
AIRLINES-0.27%
Delta Air Lines, Inc.,
Unsec. Notes, 7.90%, 12/15/09 $ 9,150,000 $ 8,740,171
----------------------------------------------------------------------------
Deb., 10.38%, 12/15/22 2,300,000 2,477,192
============================================================================
11,217,363
============================================================================
AUTOMOBILE MANUFACTURERS-0.17%
Ford Holdings, Inc., Unsec. Gtd. Unsub. Deb.,
9.30%, 03/01/30 6,000,000 6,920,880
============================================================================
BANKS-3.34%
Bank of America Corp., Sub. Notes, 9.38%,
09/15/09 7,300,000 8,409,089
----------------------------------------------------------------------------
Bank United-Series A, Medium Term Notes,
8.00%, 03/15/09 8,890,000 9,361,881
----------------------------------------------------------------------------
BankBoston N.A., Unsec. Sub. Notes, 7.00%,
09/15/07 8,150,000 8,550,572
----------------------------------------------------------------------------
BB&T Corp., RAPS Sub. Notes, 6.38%, 06/30/05 9,145,000 9,220,721
----------------------------------------------------------------------------
Crestar Financial Corp., Sub. Notes, 8.75%,
11/15/04 3,750,000 4,104,450
----------------------------------------------------------------------------
Deutsche Bank Luxembourg (Luxembourg), Yankee
Bonds, 6.83%, 12/28/07 (Acquired 07/11/00;
Cost $7,331,600)(a) 8,000,000 7,780,480
----------------------------------------------------------------------------
First Union Corp., Putable Unsec. Sub. Deb.,
6.55%, 10/15/35 9,680,000 9,840,010
----------------------------------------------------------------------------
7.50%, 04/15/35 3,300,000 3,448,236
----------------------------------------------------------------------------
Firstar Bank N.A., Unsec. Sub. Notes, 7.13%,
12/01/09 4,950,000 5,082,610
----------------------------------------------------------------------------
Midland Bank PLC (United Kingdom), Unsec.
Putable Sub. Yankee Notes, 7.65%, 05/01/25 2,105,000 2,210,082
----------------------------------------------------------------------------
NBD Bank N.A. Michigan, Putable Unsec. Sub.
Deb., 8.25%, 11/01/24 16,150,000 17,628,048
----------------------------------------------------------------------------
Regions Financial Corp., Putable Sub. Notes,
7.75%, 09/15/24 6,300,000 6,569,766
----------------------------------------------------------------------------
Southtrust Bank, N.A., Sub. Notes, 6.13%,
01/09/28 8,600,000 8,176,966
----------------------------------------------------------------------------
Sovereign Bancorp, Inc., Medium Term Sub.
Notes, 8.00%, 03/15/03 5,330,000 5,347,056
----------------------------------------------------------------------------
St. Paul Bancorp, Inc., Sr. Unsec. Unsub.
Notes, 7.13%, 02/15/04 5,500,000 5,589,375
----------------------------------------------------------------------------
Swiss Bank Corp.-NY, Sub. Notes, 7.38%,
06/15/17 6,065,000 6,404,034
----------------------------------------------------------------------------
U.S. Bancorp, Unsec. Putable Sub. Deb.,
7.50%, 06/01/26 10,000,000 10,477,400
----------------------------------------------------------------------------
Union Planters Bank N.A., Unsec. Sub. Notes,
6.50%, 03/15/08 6,000,000 5,752,440
----------------------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
BANKS-(CONTINUED)
Washington Mutual, Inc., Jr. Unsec. Sub.
Notes, 8.25%, 04/01/10 $ 5,000,000 $ 5,418,150
============================================================================
139,371,366
============================================================================
BROADCASTING & CABLE TV-3.69%
AT&T Corp.-Liberty Media Corp., Sr. Unsec.
Notes, 7.88%, 07/15/09 8,550,000 8,336,421
----------------------------------------------------------------------------
Deb., 8.25%, 02/01/30 7,750,000 7,029,482
----------------------------------------------------------------------------
British Sky Broadcasting Group PLC (United
Kingdom), Sr. Unsec. Gtd. Unsub. Euro
Bonds, 7.75%, 07/09/09(c) GBP 2,100,000 2,683,758
----------------------------------------------------------------------------
Yankee Notes, 8.20%, 07/15/09 7,715,000 7,708,211
----------------------------------------------------------------------------
Continental Cablevision, Inc., Sr. Deb.,
9.50%, 08/01/13 14,000,000 15,872,080
----------------------------------------------------------------------------
Cox Enterprises, Inc., Notes, 8.00%, 02/15/07
(Acquired 02/16/00-03/06/01; Cost
$11,028,901)(a) 10,850,000 11,446,641
----------------------------------------------------------------------------
CSC Holdings Inc., Sr. Unsec.
Notes, 7.25%, 07/15/08 4,165,000 3,966,663
----------------------------------------------------------------------------
Notes, 7.63%, 04/01/11(b) 3,790,000 3,627,106
----------------------------------------------------------------------------
Notes, 7.88%, 12/15/07 12,730,000 12,694,992
----------------------------------------------------------------------------
Deb., 7.88%, 02/15/18 7,100,000 6,530,083
----------------------------------------------------------------------------
Series B, Notes, 8.13%, 07/15/09 8,300,000 8,256,757
----------------------------------------------------------------------------
Lenfest Communications, Inc., Sr. Unsec. Sub.
Notes, 8.25%, 02/15/08 2,550,000 2,666,076
----------------------------------------------------------------------------
TCA Cable TV, Inc., Sr. Unsec. Deb., 6.53%,
02/01/28 4,350,000 4,252,864
----------------------------------------------------------------------------
TCI Communications, Inc., Sr. Unsec. Deb.,
8.75%, 08/01/15 2,100,000 2,360,001
----------------------------------------------------------------------------
Tele-Communications, Inc., Sr. Deb., 9.80%,
02/01/12 16,650,000 19,912,734
----------------------------------------------------------------------------
Time Warner Inc.,
Sr. Unsec. Gtd. Deb., 7.57%, 02/01/24 9,440,000 9,350,603
----------------------------------------------------------------------------
Unsec. Deb., 8.05%, 01/15/16 6,965,000 7,382,761
----------------------------------------------------------------------------
Notes, 8.18%, 08/15/07 6,150,000 6,648,703
----------------------------------------------------------------------------
Unsec. Deb., 9.13%, 01/15/13 5,100,000 5,891,724
----------------------------------------------------------------------------
Unsec. Deb., 9.15%, 02/01/23 6,000,000 6,934,860
============================================================================
153,552,520
============================================================================
CASINOS & GAMING-0.08%
MGM Mirage Inc., Sr. Unsec. Gtd. Notes,
8.50%, 09/15/10 3,000,000 3,122,820
============================================================================
COMPUTER HARDWARE-0.11%
Candescent Technologies Corp., Sr. Conv.
Unsec. Gtd. Sub. Deb., 8.00%, 05/01/03
(Acquired 04/17/98-04/19/01; Cost
$19,222,750)(a)(d)(e) 25,012,000 4,502,160
============================================================================
|
FS-111
PRINCIPAL MARKET
AMOUNT VALUE
CONSUMER FINANCE-1.70%
Capital One Financial Corp., Unsec. Notes,
7.25%, 05/01/06 $ 10,020,000 $ 9,833,027
----------------------------------------------------------------------------
CitiFinancial Credit Co.,
Putable Notes, 6.63%, 06/01/15 2,000,000 2,036,560
----------------------------------------------------------------------------
Unsec. Putable Notes, 7.88%, 02/01/25 5,865,000 6,305,110
----------------------------------------------------------------------------
Ford Motor Credit Co.,
Unsec. Notes, 6.88%, 02/01/06 5,100,000 5,171,706
----------------------------------------------------------------------------
Unsec. Notes, 7.38%, 10/28/09 13,230,000 13,444,458
----------------------------------------------------------------------------
Notes, 7.88%, 06/15/10 11,925,000 12,534,606
----------------------------------------------------------------------------
General Motors Acceptance Corp., Putable
Notes, 9.00%, 10/15/02 4,175,000 4,369,179
----------------------------------------------------------------------------
Household Finance Corp.,
Sr. Unsec. Notes, 6.88%, 03/01/07 5,450,000 5,571,807
----------------------------------------------------------------------------
Sr. Unsec. Notes, 7.20%, 07/15/06 4,930,000 5,143,420
----------------------------------------------------------------------------
Unsec. Notes, 8.00%, 07/15/10 5,850,000 6,259,149
============================================================================
70,669,022
============================================================================
DERIVATIVES-0.10%
BellSouth Capital Funding, Putable Deb.,
6.04%, 11/15/26 4,000,000 4,018,360
============================================================================
DISTILLERS & VINTNERS-0.10%
Grand Metropolitan Investment Corp., Gtd.
Putable Bonds, 7.45%, 04/15/35 4,000,000 4,217,920
============================================================================
DISTRIBUTORS-0.12%
Ferrellgas Partners L.P.,-Series B, Sr. Sec.
Gtd. Notes, 9.38%, 06/15/06 4,950,000 4,999,500
============================================================================
DIVERSIFIED CHEMICALS-0.17%
Union Carbide Corp., Notes 6.70%, 04/01/09 7,000,000 7,028,280
============================================================================
DIVERSIFIED FINANCIAL SERVICES-3.78%
AIG SunAmerica Global Financing VI, Sr. Sec.
Notes, 6.30%, 05/10/11 (Acquired
05/02/01-05/24/01; Cost $19,799,956)(a) 19,900,000 19,628,962
----------------------------------------------------------------------------
Associates Corp. of North America, Sr. Deb.,
6.95%, 11/01/18 14,935,000 14,881,383
----------------------------------------------------------------------------
Bear Stearns Cos., Inc., Notes, 7.80%,
08/15/07 6,450,000 6,793,785
----------------------------------------------------------------------------
CIT Group, Inc. (The), Sr. Medium
Term Notes, 5.91%, 11/23/05 8,100,000 8,015,841
----------------------------------------------------------------------------
Notes, 6.50%, 02/07/06 2,845,000 2,883,749
----------------------------------------------------------------------------
Citigroup Inc.,
Sr. Unsec. Notes, 6.50%, 01/18/11 4,375,000 4,355,531
----------------------------------------------------------------------------
Unsec. Sub. Notes, 7.25%, 10/01/10 3,070,000 3,190,252
----------------------------------------------------------------------------
Dow Capital B.V. (Netherlands), Gtd. Yankee
Deb., 9.20%, 06/01/10 10,250,000 11,847,052
----------------------------------------------------------------------------
Fidelity Investments, Bonds, 7.57%, 06/15/29
(Acquired 04/10/01-05/09/01; Cost
$7,601,836)(a) 7,280,000 7,567,414
----------------------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
General Electric Capital Corp.
Series A, Medium Term Notes, 5.38%,
04/23/04 $ 10,560,000 $ 10,611,850
----------------------------------------------------------------------------
Series A, Medium Term Notes, 6.13%,
02/22/11 6,050,000 5,961,972
----------------------------------------------------------------------------
Series A, Medium Term Notes, 6.88%,
11/15/10 15,550,000 16,164,691
----------------------------------------------------------------------------
Gtd. Sub. Notes, 8.13%, 05/15/12 6,425,000 7,260,892
----------------------------------------------------------------------------
Lehman Brothers Holdings Inc., Sr. Bonds,
7.88%, 08/15/10 4,250,000 4,484,132
----------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co., Unsec.
Unsub. Bonds, 6.75%, 04/15/11 10,950,000 10,876,963
----------------------------------------------------------------------------
National Rural Utilities Cooperative Finance
Corp., Sr. Notes, 6.00%, 05/15/06 7,100,000 7,125,134
----------------------------------------------------------------------------
Pinnacle Partners, Sr. Notes, 8.83%, 08/15/04
(Acquired 08/02/00; Cost $7,000,000)(a) 7,000,000 7,207,270
----------------------------------------------------------------------------
Qwest Capital Funding Inc., Unsec. Gtd.
Notes, 7.90%, 08/15/10 8,180,000 8,440,124
============================================================================
157,296,997
============================================================================
ELECTRIC UTILITIES-4.03%
AES Corp. (The), Sr. Unsec. Sub. Notes,
8.38%, 08/15/07 3,000,000 2,835,000
----------------------------------------------------------------------------
10.25%, 07/15/06 1,800,000 1,818,000
----------------------------------------------------------------------------
Arizona Public Service Co., Unsec. Notes,
6.25%, 01/15/05 5,000,000 4,952,050
----------------------------------------------------------------------------
Calpine Corp., Sr. Unsec. Notes, 8.50%,
02/15/11 3,500,000 3,383,905
----------------------------------------------------------------------------
CE Generation LLC, Sr. Sec. Sub. Notes,
7.42%, 12/15/18 7,474,350 6,579,969
----------------------------------------------------------------------------
CILCORP, Inc., Sr. Unsec. Bonds, 9.38%,
10/15/29 9,000,000 9,928,710
----------------------------------------------------------------------------
Cleveland Electric Illuminating Co. (The),
First Mortgage Bonds, 6.86%, 10/01/08 6,080,000 5,978,890
----------------------------------------------------------------------------
Series D, Sr. Sec. Notes, 7.88%, 11/01/17 7,300,000 7,404,025
----------------------------------------------------------------------------
CMS Energy Corp., Sr. Unsec. Notes, 8.13%,
05/15/02 7,089,000 7,139,261
----------------------------------------------------------------------------
CMS Panhandle Holding Co., Sr. Notes, 6.13%,
03/15/04 6,600,000 6,532,812
----------------------------------------------------------------------------
Commonwealth Edison Co.
Series 94, First Mortgage Notes, 7.50%,
07/01/13 9,300,000 9,619,362
----------------------------------------------------------------------------
Series 92, First Mortgage Bonds, 7.63%,
04/15/13 4,000,000 4,158,600
----------------------------------------------------------------------------
El Paso Electric Co.
Series D, Sec. First Mortgage Bonds, 8.90%,
02/01/06 13,570,000 14,570,787
----------------------------------------------------------------------------
Series E, Sec. First Mortgage Bonds, 9.40%,
05/01/11 5,438,000 5,879,674
----------------------------------------------------------------------------
Empire District Electric Co. (The), Sr.
Notes, 7.70%, 11/15/04 8,550,000 8,896,703
----------------------------------------------------------------------------
|
FS-112
PRINCIPAL MARKET
AMOUNT VALUE
ELECTRIC UTILITIES-(CONTINUED)
Kincaid Generation LLC, Sec. Bonds, 7.33%,
06/15/20 (Acquired 04/30/98; Cost
$3,389,527)(a) $ 3,381,175 $ 3,109,058
----------------------------------------------------------------------------
Mirant Corp., Sr. Notes, 7.90%, 07/15/09
(Acquired 12/03/99-02/11/00; Cost
$4,101,691)(a) 4,225,000 4,161,667
----------------------------------------------------------------------------
Niagara Mohawk Holdings Inc., First Mortgage
Notes, 7.75%, 05/15/06 3,700,000 3,880,042
----------------------------------------------------------------------------
Niagara Mohawk Power Corp.-Series H, Sr.
Unsec. Disc. Notes, 8.50%, 07/01/10(f) 17,600,000 15,235,968
----------------------------------------------------------------------------
NRG Energy, Inc., Sr. Unsec. Notes, 7.75%,
04/01/11 9,700,000 9,854,133
----------------------------------------------------------------------------
Panhandle Eastern Pipe Line, Notes, 7.88%,
08/15/04 1,500,000 1,544,640
----------------------------------------------------------------------------
PSEG Power LLC, Sr. Notes, 8.63%, 04/15/31
(Acquired 05/25/01-06/08/01; Cost
$12,614,923)(a) 12,000,000 12,798,720
----------------------------------------------------------------------------
Public Service Company of New Mexico- Series
A, Sr. Unsec. Notes, 7.10%, 08/01/05 7,850,000 7,689,546
----------------------------------------------------------------------------
Sutton Bridge Financing Ltd. (United
Kingdom), Gtd. Euro Bonds, 8.63%,
06/30/22(b)(c) GBP 3,000,000 4,402,173
----------------------------------------------------------------------------
Texas-New Mexico Power Co., Sr. Sec. Notes,
6.25%, 01/15/09 5,800,000 5,263,442
============================================================================
167,617,137
============================================================================
ELECTRICAL COMPONENTS & EQUIPMENT-0.09%
Israel Electric Corp. Ltd. (Israel), Yankee
Deb., 7.75%, 12/15/27 (Acquired 06/09/00;
Cost $3,819,213)(a) 4,350,000 3,790,547
============================================================================
ENVIRONMENTAL SERVICES-0.34%
Browning-Ferris Industries, Inc., Unsec.
Deb., 7.40%, 09/15/35 4,170,000 3,419,400
----------------------------------------------------------------------------
Waste Management, Inc.,
Putable Unsec. Notes, 7.10%, 08/01/26 9,900,000 10,109,385
----------------------------------------------------------------------------
Sr. Unsec. Notes, 7.13%, 12/15/17 520,000 480,537
============================================================================
14,009,322
============================================================================
GAS UTILITIES-1.11%
National Fuel Gas Co.-Series D, Medium Term
Notes, 6.30%, 05/27/08 8,600,000 8,215,236
----------------------------------------------------------------------------
Northern Border Partners, L.P., Sr. Unsec.
Gtd. Unsub. Notes,
7.10%, 03/15/11 (Acquired 03/14/01; Cost
$3,495,380)(a) 3,500,000 3,436,300
----------------------------------------------------------------------------
Series A, 8.88%, 06/15/10 5,850,000 6,421,077
----------------------------------------------------------------------------
Nova Gas Transmission Ltd. (Canada), Yankee
Deb., 8.50%, 12/15/12 5,015,000 5,459,831
----------------------------------------------------------------------------
ONEOK, Inc., Unsec. Notes, 7.75%, 08/15/06 3,100,000 3,240,709
----------------------------------------------------------------------------
Sonat Inc., Sr. Unsec. Notes, 7.63%, 07/15/11 17,435,000 17,567,506
----------------------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
GAS UTILITIES-(CONTINUED)
Westcoast Energy Inc. (Canada)-Series V,
Unsec. Deb., 6.45%, 12/18/06(c) CAD $ 3,000,000 $ 1,987,473
============================================================================
46,328,132
============================================================================
INDUSTRIAL CONGLOMERATES-0.02%
Mannesmann Finance B.V. (Netherlands), Unsec.
Unsub. Gtd. Euro Bonds, 4.75%,
05/27/09(c) EUR 1,300,000 1,009,087
============================================================================
INTEGRATED OIL & GAS-0.86%
El Paso CGP Co., Sr. Putable Unsec. Deb.,
6.70%, 02/15/27 18,900,000 18,649,575
----------------------------------------------------------------------------
Petro-Canada (Canada), Yankee Deb., 9.25%,
10/15/21 9,300,000 11,043,564
----------------------------------------------------------------------------
Phillips Petroleum Co., Unsec. Notes, 8.50%,
05/25/05 5,600,000 6,075,832
============================================================================
35,768,971
============================================================================
INTEGRATED TELECOMMUNICATION SERVICES-1.04%
AT&T Canada Inc. (Canada), Sr. Unsec.
Unsub. Notes, 7.15%, 09/23/04(c) CAD 1,200,000 787,433
----------------------------------------------------------------------------
Unsec. Sub. Yankee Notes, 7.63%, 03/15/05 10,100,000 9,989,203
----------------------------------------------------------------------------
Sr. Unsec. Yankee Notes, 7.65%, 09/15/06 5,200,000 5,118,984
----------------------------------------------------------------------------
Sr. Disc. Yankee Notes, 9.95%, 06/15/08(f) 6,000,000 4,995,000
----------------------------------------------------------------------------
MCI Communications Corp., Sr. Unsec.
Notes, 6.95%, 08/15/06 6,325,000 6,293,565
----------------------------------------------------------------------------
Putable Deb., 7.13%, 06/15/27 3,650,000 3,694,202
----------------------------------------------------------------------------
Olivetti International Finance N.V.
(Netherlands)-Series E, Gtd. Medium Term
Euro Notes, 6.58%, 07/30/09(c) EUR 3,210,000 2,612,489
----------------------------------------------------------------------------
Sprint Corp., Putable Deb., 9.00%, 10/15/19 2,200,000 2,279,134
----------------------------------------------------------------------------
Teleglobe Canada Inc. (Canada), Unsec. Deb.,
8.35%, 06/20/03(c) CAD 1,000,000 678,805
----------------------------------------------------------------------------
TELUS Corp. (Canada), Yankee Notes, 8.00%,
06/01/11 3,650,000 3,723,256
----------------------------------------------------------------------------
WorldCom, Inc., Sr. Sub. Notes, 7.75%,
04/01/07 2,975,000 3,073,473
============================================================================
43,245,544
============================================================================
LIFE & HEALTH INSURANCE-0.91%
American General Finance Corp., Sr. Putable
Notes, 8.45%, 10/15/09 14,860,000 16,587,029
----------------------------------------------------------------------------
John Hancock Global Funding Ltd. (United
States of America)-Series 99-H, Sr. Sec.
Sub. Medium Term Notes, 6.75%,
02/15/06(c) AUD 10,700,000 5,463,249
----------------------------------------------------------------------------
Prudential Funding, LLC, Medium Term Notes,
6.60%, 05/15/08 (Acquired 05/09/01; Cost
$2,097,564)(a) 2,100,000 2,099,601
----------------------------------------------------------------------------
|
FS-113
PRINCIPAL MARKET
AMOUNT VALUE
LIFE & HEALTH INSURANCE-(CONTINUED)
Sun Canada Financial Co., Gtd. Sub. Bonds,
6.63%, 12/15/07 (Acquired 10/14/99; Cost
$1,042,095)(a) $ 1,500,000 $ 1,458,384
----------------------------------------------------------------------------
Torchmark Corp., Notes,
7.38%, 08/01/13 3,000,000 3,010,590
----------------------------------------------------------------------------
7.88%, 05/15/23 9,200,000 9,213,432
============================================================================
37,832,285
============================================================================
MANAGED HEALTH CARE-0.24%
Wellpoint Health Networks Inc., Sr. Unsec.
Notes 6.38%, 06/15/06 10,000,000 9,933,400
============================================================================
MULTI-LINE INSURANCE-0.45%
AIG SunAmerica Global Financing II, Sr. Sec.
Notes, 7.60%, 06/15/05 (Acquired
06/08/00-04/16/01; Cost $12,387,667)(a) 12,175,000 12,985,733
----------------------------------------------------------------------------
AIG SunAmerica Global Financing IV, Sr.
Notes, 5.85%, 02/01/06 (Acquired 01/24/01;
Cost $5,899,461)(a) 5,930,000 5,920,097
============================================================================
18,905,830
============================================================================
MULTI-UTILITIES-1.38%
Dynegy-Roseton Danskamme LLC, Gtd. Pass
Through Ctfs.,
7.27%, 11/08/10 (Acquired 06/01/01; Cost
$4,107,585)(a) 4,100,000 4,066,175
----------------------------------------------------------------------------
7.67%, 11/08/16 (Acquired 06/01/01; Cost
$11,538,755)(a) 11,500,000 11,370,165
----------------------------------------------------------------------------
Enron Corp., Sec. Notes, 8.00%, 08/15/05
(Acquired 06/05/01; Cost $8,496,672)(a) 8,225,000 8,479,975
----------------------------------------------------------------------------
UtiliCorp United Inc., Sr. Unsec. Putable
Notes, 6.70%, 10/15/06 6,350,000 6,372,670
----------------------------------------------------------------------------
Western Resources, Inc., Sr. Unsec. Notes,
6.25%, 08/15/03 1,575,000 1,524,490
----------------------------------------------------------------------------
7.13%, 08/01/09 7,000,000 6,329,190
----------------------------------------------------------------------------
Williams Cos. (The), PATS Notes, 6.75%,
01/15/06 (Acquired 01/11/01; Cost
$5,504,281)(a) 5,525,000 5,503,563
----------------------------------------------------------------------------
Williams Gas Pipeline Center Inc., Sr. Notes,
7.38%, 11/15/06 (Acquired 02/15/01; Cost
$8,572,240)(a) 8,300,000 8,615,317
----------------------------------------------------------------------------
Williams Holdings of Delaware, Sr. Unsec.
Deb., 6.25%, 02/01/06 5,410,000 5,328,850
============================================================================
57,590,395
============================================================================
OIL & GAS DRILLING-0.27%
Global Marine Inc., Sr. Unsec. Notes, 7.13%,
09/01/07 11,100,000 11,305,350
============================================================================
OIL & GAS EQUIPMENT & SERVICES-0.78%
Kinder Morgan Energy Partners, L.P., Sr.
Unsec. Notes, 6.30%, 02/01/09 8,400,000 8,077,860
----------------------------------------------------------------------------
Kinder Morgan, Inc., Unsec. Deb., 7.35%,
08/01/26 7,800,000 8,016,840
----------------------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
OIL & GAS EQUIPMENT & SERVICES-(CONTINUED)
National-Oilwell, Inc., Sr. Unsec. Notes
6.50%, 03/15/11 $ 2,750,000 $ 2,614,395
----------------------------------------------------------------------------
Petroleum Geo-Services A.S.A. (Norway),
Sr. Unsec. Yankee Notes, 7.13%, 03/30/28 5,500,000 4,524,245
----------------------------------------------------------------------------
Yankee Notes, 7.50%, 03/31/07 5,960,000 5,791,988
----------------------------------------------------------------------------
Smith International, Inc., Notes, 6.75%,
02/15/11 3,750,000 3,683,738
============================================================================
32,709,066
============================================================================
OIL & GAS EXPLORATION & PRODUCTION-1.27%
Anadarko Petroleum Corp., Unsec. Putable
Deb., 7.73%, 09/15/96 8,250,000 8,751,270
----------------------------------------------------------------------------
Anderson Exploration Ltd. (Canada), Unsec.
Sub. Yankee Notes, 6.75%, 03/15/11 5,575,000 5,471,751
----------------------------------------------------------------------------
Burlington Resources Inc., Sr. Unsec. Gtd.
Notes, 6.68%, 02/15/11 6,870,000 6,848,153
----------------------------------------------------------------------------
Canadian Occidental Petroleum (Canada),
Unsec. Unsub. Yankee Notes, 7.40%, 05/01/28 10,400,000 9,957,376
----------------------------------------------------------------------------
Gulf Canada Resources Ltd. (Canada), Unsec.
Yankee Notes 7.13%, 01/15/11 7,370,000 7,605,693
----------------------------------------------------------------------------
Louis Dreyfus Natural Gas Corp., Unsec.
Notes, 6.88%, 12/01/07 8,300,000 8,246,714
----------------------------------------------------------------------------
Noble Affiliates Inc., Sr. Unsec. Deb.,
7.25%, 08/01/97 2,600,000 2,313,064
----------------------------------------------------------------------------
Norcen Energy Resources Ltd. (Canada), Unsec.
Yankee Deb., 7.38%, 05/15/06 2,200,000 2,317,238
----------------------------------------------------------------------------
Talisman Energy Inc. (Canada), Unsec. Unsub.
Yankee Deb., 7.13%, 06/01/07 1,500,000 1,525,545
============================================================================
53,036,804
============================================================================
OIL & GAS REFINING & MARKETING-0.52%
Petroleos Mexicanos (Mexico),
Sr. Unsec. Gtd. Yankee Bonds, 9.38%,
12/02/08 6,295,000 6,757,368
----------------------------------------------------------------------------
Series P, Unsec. Putable Unsub. Yankee
Notes, 9.50%, 09/15/27 14,025,000 15,052,472
============================================================================
21,809,840
============================================================================
PACKAGED FOODS-0.31%
ConAgra, Inc., Sr. Unsec. Putable Notes,
7.13%, 10/01/26 12,755,000 13,066,094
============================================================================
PROPERTY & CASUALTY INSURANCE-0.83%
Allstate Financial Global Funding, Notes,
6.50%, 06/14/11 (Acquired 06/07/01; Cost
$11,796,923)(a) 11,815,000 11,683,972
----------------------------------------------------------------------------
Florida Windstorm Underwriting Association,
Sr. Sec. Notes, 7.13%, 02/25/19 (Acquired
04/25/01-05/03/01; Cost $14,660,688)(a) 14,635,000 14,465,819
----------------------------------------------------------------------------
|
FS-114
PRINCIPAL MARKET
AMOUNT VALUE
PROPERTY & CASUALTY INSURANCE-(CONTINUED)
Terra Nova Insurance (United Kingdom)
Holding, Sr. Unsec. Gtd. Yankee Notes,
7.00%, 05/15/08 $ 2,350,000 $ 2,003,023
----------------------------------------------------------------------------
7.20%, 08/15/07 7,000,000 6,187,160
============================================================================
34,339,974
============================================================================
PUBLISHING & PRINTING-0.64%
News America Holdings, Inc.,
Sr. Unsec. Gtd. Putable Bonds, 7.43%,
10/01/26 4,950,000 5,007,965
----------------------------------------------------------------------------
Unsec. Deb. 7.75%, 01/20/24 9,450,000 8,946,410
----------------------------------------------------------------------------
Putable Notes, 8.45%, 08/01/34 3,325,000 3,406,995
----------------------------------------------------------------------------
Sr. Gtd. Deb., 9.25%, 02/01/13 8,250,000 9,281,085
============================================================================
26,642,455
============================================================================
RAILROADS-0.51%
Consolidated Rail Corp., Deb., 9.75%,
06/15/20 9,300,000 10,965,444
----------------------------------------------------------------------------
Norfolk Southern Corp., Notes, 7.05%,
05/01/37 10,000,000 10,300,300
============================================================================
21,265,744
============================================================================
REAL ESTATE INVESTMENT TRUSTS-0.59%
ERP Operating L.P., Unsec. Notes, 7.13%,
10/15/17 3,250,000 3,008,558
----------------------------------------------------------------------------
Health Care REIT, Inc., Sr. Unsec. Notes,
7.63%, 03/15/08 1,150,000 1,006,365
----------------------------------------------------------------------------
Healthcare Realty Trust, Inc., Sr. Unsec.
Notes, 8.13%, 05/01/11 8,900,000 8,811,623
----------------------------------------------------------------------------
Spieker Properties LP, Unsec. Deb., 7.50%,
10/01/27 7,800,000 7,232,160
----------------------------------------------------------------------------
Spieker Properties, Inc., Unsec. Unsub. Deb.,
7.35%, 12/01/17 4,600,000 4,324,920
============================================================================
24,383,626
============================================================================
REINSURANCE-0.30%
GE Global Insurance Holdings Corp., Unsec.
Notes, 7.75%, 06/15/30 11,250,000 12,276,225
============================================================================
SOVEREIGN DEBT-0.46%
British Columbia (Province of) (Canada),
Unsec. Unsub. Yankee Notes, 5.38%, 10/29/08 2,750,000 2,660,708
----------------------------------------------------------------------------
Hydro-Quebec-Series B (Canada), Gtd. Medium
Term Yankee Notes, 8.62%, 12/15/11 5,000,000 5,769,650
----------------------------------------------------------------------------
Ontario (Province of) (Canada), Sr. Unsec.
Unsub. Notes, 5.50%, 10/01/08 5,800,000 5,615,734
----------------------------------------------------------------------------
Quebec (Province of) (Canada), Yankee Deb.,
7.50%, 07/15/23 4,810,000 5,087,970
============================================================================
19,134,062
============================================================================
SYSTEMS SOFTWARE-0.46%
VERITAS Software Corp., Conv. Unsec. Disc.
Notes, 1.86%, 08/13/06 10,000,000 19,312,000
============================================================================
|
PRINCIPAL MARKET
AMOUNT VALUE
WIRELESS TELECOMMUNICATION SERVICES-0.25%
Bell Mobility Cellular Inc. (Canada), Unsec.
Deb., 6.55%, 06/02/08(c) CAD 2,500,000 $ 1,611,869
----------------------------------------------------------------------------
Vodafone Group PLC (United Kingdom), Jr.
Unsec. Notes, 7.75%, 02/15/10 $ 8,350,000 8,780,860
============================================================================
10,392,729
============================================================================
Total Bonds & Notes (Cost $1,314,621,024) 1,302,621,807
============================================================================
SHARES
STOCKS & OTHER EQUITY INTERESTS-52.00%
ADVERTISING-1.53%
Lamar Advertising Co.(g) 500,000 22,000,000
----------------------------------------------------------------------------
Omnicom Group Inc. 483,000 41,538,000
============================================================================
63,538,000
============================================================================
APPLICATION SOFTWARE-1.03%
Amdocs Ltd. (United Kingdom)(g) 558,000 30,048,300
----------------------------------------------------------------------------
Henry (Jack) & Associates, Inc. 415,900 12,892,900
============================================================================
42,941,200
============================================================================
BANKS-1.33%
Bank of New York Co., Inc. (The) 603,000 28,944,000
----------------------------------------------------------------------------
PNC Financial Services Group 400,000 26,316,000
============================================================================
55,260,000
============================================================================
BIOTECHNOLOGY-1.40%
Genzyme Corp.(g) 958,200 58,450,200
============================================================================
BROADCASTING & CABLE TV-1.78%
Clear Channel Communications, Inc.(g) 333,000 20,879,100
----------------------------------------------------------------------------
General Motors Corp.-Class H(g) 567,000 11,481,750
----------------------------------------------------------------------------
Hispanic Broadcasting Corp.(g) 375,800 10,781,702
----------------------------------------------------------------------------
Univision Communications Inc.-Class A(g) 726,500 31,079,670
============================================================================
74,222,222
============================================================================
COMPUTER HARDWARE-0.26%
Dell Computer Corp.(g) 420,000 10,899,000
============================================================================
COMPUTER STORAGE & PERIPHERALS-0.52%
EMC Corp.(g) 743,000 21,584,150
============================================================================
CONSTRUCTION & ENGINEERING-0.37%
Quanta Services, Inc.(g) 692,000 15,251,680
============================================================================
DATA PROCESSING SERVICES-0.79%
Concord EFS, Inc.(g) 315,000 16,383,150
----------------------------------------------------------------------------
DST Systems, Inc.(g) 314,000 16,547,800
============================================================================
32,930,950
============================================================================
DERIVATIVES-0.52%
Kerr-McGee Corp.-$1.83 Pfd. DECS 445,000 21,671,500
============================================================================
|
FS-115
MARKET
SHARES VALUE
DIVERSIFIED FINANCIAL SERVICES-6.74%
American Express Co. 491,000 $ 19,050,800
----------------------------------------------------------------------------
Citigroup Inc. 1,321,433 69,824,520
----------------------------------------------------------------------------
Fannie Mae 215,000 18,307,250
----------------------------------------------------------------------------
Freddie Mac 277,000 19,390,000
----------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 299,000 25,654,200
----------------------------------------------------------------------------
J.P. Morgan Chase & Co. 657,500 29,324,500
----------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 586,000 34,720,500
----------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 302,000 19,397,460
----------------------------------------------------------------------------
State Street Corp. 254,000 12,570,460
----------------------------------------------------------------------------
Stilwell Financial, Inc. 493,000 16,545,080
----------------------------------------------------------------------------
Waddell & Reed Financial, Inc.-Class A 499,000 15,843,250
============================================================================
280,628,020
============================================================================
ELECTRIC UTILITIES-2.20%
AES Corp. (The)(g) 549,000 23,634,450
----------------------------------------------------------------------------
AES Trust III-$3.38 Conv. Pfd. 108,600 7,493,400
----------------------------------------------------------------------------
Calpine Corp.(g) 425,000 16,065,000
----------------------------------------------------------------------------
Duke Energy Corp. 524,600 20,464,646
----------------------------------------------------------------------------
Mirant Corp.(g) 331,390 11,399,816
----------------------------------------------------------------------------
Reliant Resources, Inc.(g) 510,500 12,609,350
============================================================================
91,666,662
============================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-0.23%
Sanmina Corp.(g) 414,000 9,691,740
============================================================================
FOOD RETAIL-0.79%
Safeway Inc.(g) 682,000 32,736,000
============================================================================
GAS UTILITIES-0.40%
El Paso Corp. 314,000 16,497,560
============================================================================
GENERAL MERCHANDISE STORES-0.56%
Target Corp. 671,200 23,223,520
============================================================================
HEALTH CARE DISTRIBUTORS & SERVICES-0.43%
Cardinal Health, Inc. 259,500 17,905,500
============================================================================
HEALTH CARE EQUIPMENT-0.72%
Baxter International Inc. 610,800 29,929,200
============================================================================
HEALTH CARE FACILITIES-1.26%
HCA Inc. 614,000 27,746,660
----------------------------------------------------------------------------
Tenet Healthcare Corp.(g) 481,000 24,814,790
============================================================================
52,561,450
============================================================================
HOME IMPROVEMENT RETAIL-0.33%
Home Depot, Inc. (The) 295,500 13,755,525
============================================================================
INDUSTRIAL CONGLOMERATES-1.57%
General Electric Co. 706,000 34,417,500
----------------------------------------------------------------------------
|
MARKET
SHARES VALUE
INDUSTRIAL CONGLOMERATES-(CONTINUED)
Tyco International Ltd. (Bermuda) 567,000 $ 30,901,500
============================================================================
65,319,000
============================================================================
INSURANCE BROKERS-0.79%
Marsh & McLennan Cos., Inc. 325,000 32,825,000
============================================================================
INTEGRATED OIL & GAS-2.16%
Chevron Corp. 282,000 25,521,000
----------------------------------------------------------------------------
Exxon Mobil Corp. 388,700 33,952,945
----------------------------------------------------------------------------
TotalFinaElf S.A. (France) 218,000 30,562,083
============================================================================
90,036,028
============================================================================
INTEGRATED TELECOMMUNICATION SERVICES-3.99%
BellSouth Corp. 695,000 27,987,650
----------------------------------------------------------------------------
Broadwing Inc.(g) 609,520 14,902,764
----------------------------------------------------------------------------
Korea Telecom Corp.-ADR (South Korea) 189,796 4,171,716
----------------------------------------------------------------------------
McLeodUSA Inc.-Class A(g) 1,371,000 6,292,890
----------------------------------------------------------------------------
Qwest Communications International Inc. 665,000 21,193,550
----------------------------------------------------------------------------
SBC Communications Inc. 744,000 29,804,640
----------------------------------------------------------------------------
Telecom Italia S.p.A. (Italy) 2,642,300 12,631,420
----------------------------------------------------------------------------
Telefonica, S.A. (Spain)(g) 1,296,993 16,006,263
----------------------------------------------------------------------------
Time Warner Telecom Inc.-Class A(g) 314,200 10,531,984
----------------------------------------------------------------------------
Verizon Communications Inc. 419,000 22,416,500
============================================================================
165,939,377
============================================================================
INTERNET SOFTWARE & SERVICES-1.07%
Check Point Software Technologies Ltd.
(Israel)(g) 498,000 25,183,860
----------------------------------------------------------------------------
Internet Security Systems, Inc.(g) 251,000 12,188,560
----------------------------------------------------------------------------
VeriSign, Inc.(g) 122,500 7,351,225
============================================================================
44,723,645
============================================================================
IT CONSULTING & SERVICES-0.50%
SunGard Data Systems Inc.(g) 700,000 21,007,000
============================================================================
LIFE & HEALTH INSURANCE-0.55%
AFLAC, Inc. 722,000 22,735,780
============================================================================
MOVIES & ENTERTAINMENT-1.83%
AOL Time Warner Inc.(g) 746,700 39,575,100
----------------------------------------------------------------------------
Viacom Inc.-Class B(g) 703,659 36,414,353
============================================================================
75,989,453
============================================================================
MULTI-LINE INSURANCE-1.57%
American International Group, Inc. 444,500 38,227,000
----------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The) 394,000 26,949,600
============================================================================
65,176,600
============================================================================
MULTI-UTILITIES-1.69%
Dynegy Inc.-Class A 601,000 27,946,500
----------------------------------------------------------------------------
Enron Corp. 356,000 17,444,000
----------------------------------------------------------------------------
|
FS-116
MARKET
SHARES VALUE
MULTI-UTILITIES-(CONTINUED)
Williams Cos., Inc. (The) 757,000 $ 24,943,150
============================================================================
70,333,650
============================================================================
NETWORKING EQUIPMENT-0.99%
Brocade Communications Systems, Inc.(g) 353,000 15,528,470
----------------------------------------------------------------------------
Cisco Systems, Inc.(g) 963,000 17,526,600
----------------------------------------------------------------------------
Juniper Networks, Inc.(g) 264,700 8,232,170
============================================================================
41,287,240
============================================================================
OIL & GAS EQUIPMENT & SERVICES-0.53%
BJ Services Co.(g) 777,000 22,051,260
============================================================================
OIL & GAS EXPLORATION & PRODUCTION-2.19%
Anadarko Petroleum Corp. 463,000 25,015,890
----------------------------------------------------------------------------
Apache Corp. 502,000 25,476,500
----------------------------------------------------------------------------
Devon Energy Corp. 112,000 5,880,000
----------------------------------------------------------------------------
EOG Resources, Inc. 340,000 12,087,000
----------------------------------------------------------------------------
Kerr-McGee Corp. 344,900 22,856,523
============================================================================
91,315,913
============================================================================
PACKAGED FOODS-0.37%
Kraft Foods, Inc.-Class A(g) 495,700 15,366,700
============================================================================
PHARMACEUTICALS-4.05%
Abbott Laboratories 564,000 27,077,640
----------------------------------------------------------------------------
Allergan, Inc. 324,000 27,702,000
----------------------------------------------------------------------------
American Home Products Corp. 281,000 16,421,640
----------------------------------------------------------------------------
Johnson & Johnson 430,000 21,500,000
----------------------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class A(g) 177,000 9,381,000
----------------------------------------------------------------------------
Merck & Co., Inc. 274,000 17,511,340
----------------------------------------------------------------------------
Pfizer Inc. 621,200 24,879,060
----------------------------------------------------------------------------
Pharmacia Corp. 523,000 24,031,850
============================================================================
168,504,530
============================================================================
PROPERTY & CASUALTY INSURANCE-0.51%
MGIC Investment Corp. 292,000 21,210,880
============================================================================
SEMICONDUCTOR EQUIPMENT-0.32%
Applied Materials, Inc.(g) 270,000 13,257,000
============================================================================
SEMICONDUCTORS-1.17%
Analog Devices, Inc.(g) 496,300 21,464,975
----------------------------------------------------------------------------
Intel Corp. 575,000 16,818,750
----------------------------------------------------------------------------
Microchip Technology Inc.(g) 312,800 10,456,904
============================================================================
48,740,629
============================================================================
SPECIALTY STORES-0.52%
Bed Bath & Beyond Inc.(g) 689,000 21,496,800
============================================================================
SYSTEMS SOFTWARE-0.54%
Oracle Corp.(g) 750,000 14,250,000
----------------------------------------------------------------------------
|
MARKET
SHARES VALUE
SYSTEMS SOFTWARE-(CONTINUED)
VERITAS Software Corp.(g) 122,100 $ 8,123,313
============================================================================
22,373,313
============================================================================
TELECOMMUNICATIONS EQUIPMENT-0.98%
Comverse Technology, Inc.(g) 192,000 11,063,040
----------------------------------------------------------------------------
JDS Uniphase Corp.(g) 664,520 8,306,500
----------------------------------------------------------------------------
Nokia Oyj-ADR (Finland) 775,000 17,081,000
----------------------------------------------------------------------------
Nortel Networks Corp. (Canada) 499,100 4,536,819
============================================================================
40,987,359
============================================================================
WIRELESS TELECOMMUNICATION SERVICES-0.92%
NTT DoCoMo, Inc. (Japan) 844 14,684,734
----------------------------------------------------------------------------
Vodafone Group PLC (United Kingdom) 5,907,285 13,102,786
----------------------------------------------------------------------------
Western Wireless Corp.-Class A(g) 247,300 10,633,900
============================================================================
38,421,420
============================================================================
Total Stocks & Other Equity Interests
(Cost $2,010,562,470) 2,164,442,656
============================================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-7.68%
U.S. TREASURY NOTES-7.31%
7.25%, 08/15/04(h) $ 25,700,000 27,597,688
----------------------------------------------------------------------------
5.88%, 11/15/04(h) 8,905,000 9,213,469
----------------------------------------------------------------------------
6.75%, 05/15/05 44,900,000 47,832,419
----------------------------------------------------------------------------
6.50%, 08/15/05 to 02/15/10 116,440,000 123,667,042
----------------------------------------------------------------------------
9.38%, 02/15/06(h) 16,800,000 19,813,752
----------------------------------------------------------------------------
6.88%, 05/15/06 34,500,000 37,209,975
----------------------------------------------------------------------------
6.13%, 08/15/07 6,150,000 6,448,336
----------------------------------------------------------------------------
5.75%, 08/15/10(h) 31,850,000 32,604,845
============================================================================
304,387,526
============================================================================
U.S. TREASURY BONDS-0.37%
6.13%, 11/15/27 to 08/15/29 14,845,000 15,379,008
============================================================================
Total U.S. Treasury Securities (Cost
$307,426,584) 319,766,534
============================================================================
U.S. GOVERNMENT AGENCY SECURITIES-4.02%
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC)-2.49%
Jr. Unsec. Sub. Notes, 5.88%, 03/21/11 9,000,000 8,633,430
----------------------------------------------------------------------------
Pass Through Ctfs.,
7.00%, 11/01/30 to 02/01/31 31,775,630 31,984,078
----------------------------------------------------------------------------
Pass Through Ctfs.-TBA,
7.00%, 07/01/31 to 08/01/31(i) 48,000,000 48,255,104
----------------------------------------------------------------------------
6.50%, 08/01/31(i) 15,000,000 14,770,312
============================================================================
103,642,924
============================================================================
|
FS-117
PRINCIPAL MARKET
AMOUNT VALUE
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA)-1.53%
Pass Through Ctfs.,
6.50%, 04/01/14 to 12/01/14 $ 40,736,329 $ 40,863,427
----------------------------------------------------------------------------
8.00%, 12/01/23 9,925,948 10,267,102
----------------------------------------------------------------------------
Unsec. Sub. Notes, 5.50%, 05/02/06 12,800,000 12,660,224
============================================================================
63,790,753
============================================================================
Total U.S. Government Agency Securities
(Cost $168,348,974) 167,433,677
============================================================================
ASSET-BACKED SECURITIES-1.76%
AIRLINES-0.52%
America West Airlines, Inc.,-Series C, Pass
Through Ctfs., 6.86%, 07/02/04 1,735,331 1,711,349
----------------------------------------------------------------------------
Northwest Airlines Inc.-Series 971B, Pass
Through Ctfs., 7.25%, 01/02/12 3,964,736 3,684,370
----------------------------------------------------------------------------
United Air Lines, Inc.-Series 95A2, Pass
Through Ctfs.,
7.19%, 04/01/11 12,055,000 12,286,697
----------------------------------------------------------------------------
9.56%, 10/19/18 3,750,000 3,976,050
============================================================================
21,658,466
============================================================================
AUTOMOBILE MANUFACTURERS-0.10%
DaimlerChrysler N.A. Holding Corp., Gtd. ROCS
Series CHR-1998-1, Collateral Trust, 6.50%,
08/01/18 4,609,837 4,223,879
============================================================================
COMPUTER HARDWARE-0.22%
American Airlines, Inc., Pass Through Ctfs.,
6.82%, 05/23/11 (Acquired 06/28/01; Cost
$5,864,397)(a) 5,770,000 5,738,842
----------------------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
COMPUTER HARDWARE-(CONTINUED)
American Airlines, Inc.-Series 87-A,
Equipment Trust Ctfs., 9.90%, 01/15/11 $ 2,955,000 $ 3,350,438
============================================================================
9,089,280
============================================================================
DIVERSIFIED FINANCIAL SERVICES-0.48%
Citicorp Lease-Class A2, Series 1999-1, Pass
Through Ctfs., 8.04%, 12/15/19 (Acquired
06/01/00-01/25/01; Cost $19,745,712)(a) 19,600,000 20,045,900
============================================================================
ELECTRIC UTILITIES-0.44%
Beaver Valley II Funding Corp., SLOBS, 9.00%,
06/01/17 12,500,000 13,204,875
----------------------------------------------------------------------------
Indiana Michigan Power Co.-Series F, SLOBS,
9.82%, 12/07/22 4,468,941 4,937,107
============================================================================
18,141,982
============================================================================
Total Asset-Backed Securities (Cost
$60,985,459) 73,159,507
============================================================================
SHARES
MONEY MARKET FUNDS-4.18%
STIC Liquid Assets Portfolio(j) 87,072,813 87,072,813
----------------------------------------------------------------------------
STIC Prime Portfolio(j) 87,072,813 87,072,813
============================================================================
Total Money Market Funds (Cost
$174,145,626) 174,145,626
============================================================================
TOTAL INVESTMENTS-100.93% (Cost
$4,036,090,137) 4,201,569,807
============================================================================
OTHER ASSETS LESS LIABILITIES-(0.93%) (38,800,060)
============================================================================
NET ASSETS-100.00% $4,162,769,747
____________________________________________________________________________
============================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt AUD - Australian Dollar CAD - Canadian Dollars Conv. - Convertible Ctfs. - Certificates Deb. - Debentures DECS - Dividend Enhanced Convertible Stock Disc. - Discounted EUR - Euro GBP - British Pound Sterling Gtd. - Guaranteed PATS - Putable Asset Term Security Pfd. - Preferred RAPS - Redeemable and Putable Security ROCS - Receipts on Corporate Securities Trust Sec. - Secured SLOBS - Secured Lease Obligation Bonds Sr. - Senior Sub. - Subordinated TBA - To Be Announced Unsec. - Unsecured Unsub. - Unsubordinated |
Notes to Schedule of Investments:
(a) 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
06/30/01 was $197,862,762, which represented 4.75% of the Fund's net
assets.
(b) Represents a security sold under Rule 144A, which is exempt from
registration and may be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended.
(c) Foreign denominated security. Par value is denominated in currency
indicated.
(d) Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(e) Security fair valued in accordance with the procedures established by the
Board of Trustees.
(f) Discounted bond at issue. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(g) Non-income producing security.
(h) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 10.
(i) Security purchased on forward commitment basis. These securities are
subject to dollar roll transactions. See Note 1 Section B.
(j) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-118
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$4,036,090,137)* $4,201,569,807
-------------------------------------------------------------
Foreign currencies, at value (cost
$732,830) 728,671
-------------------------------------------------------------
Receivables for:
Investments sold 182,994
-------------------------------------------------------------
Variation margin 2,198,725
-------------------------------------------------------------
Fund shares sold 13,551,699
-------------------------------------------------------------
Dividends and interest 33,665,804
-------------------------------------------------------------
Foreign currency contracts outstanding 32,448
-------------------------------------------------------------
Investment for deferred compensation plan 64,656
-------------------------------------------------------------
Collateral for securities loaned 538,616,646
-------------------------------------------------------------
Other assets 72,219
=============================================================
Total assets 4,790,683,669
=============================================================
LIABILITIES:
Payables for:
Investments purchased 69,539,509
-------------------------------------------------------------
Fund shares reacquired 15,520,172
-------------------------------------------------------------
Deferred compensation plan 64,656
-------------------------------------------------------------
Collateral upon return of securities
loaned 538,616,646
-------------------------------------------------------------
Accrued distribution fees 3,649,411
-------------------------------------------------------------
Accrued transfer agent fees 420,325
-------------------------------------------------------------
Accrued operating expenses 103,203
=============================================================
Total liabilities 627,913,922
=============================================================
Net assets applicable to shares outstanding $4,162,769,747
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $2,507,490,697
_____________________________________________________________
=============================================================
Class B $1,295,829,784
_____________________________________________________________
=============================================================
Class C $ 359,449,266
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 90,608,342
_____________________________________________________________
=============================================================
Class B 46,946,649
_____________________________________________________________
=============================================================
Class C 13,007,068
_____________________________________________________________
=============================================================
Class A:
Net asset value per share $ 27.67
-------------------------------------------------------------
Offering price per share:
(Net asset value of $27.67 divided by
95.25%) $ 29.05
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 27.60
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 27.63
_____________________________________________________________
=============================================================
|
* At June 30, 2001, securities with an aggregate value of $532,324,170 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Interest $ 60,689,404
------------------------------------------------------------
Dividends (net of foreign withholding tax
of $161,569) 8,839,198
------------------------------------------------------------
Dividends from affiliated money market
funds 8,854,786
------------------------------------------------------------
Security lending income 753,216
============================================================
Total investment income 79,136,604
============================================================
EXPENSES:
Advisory fees 10,752,286
------------------------------------------------------------
Administrative services fees 115,466
------------------------------------------------------------
Custodian fees 157,407
------------------------------------------------------------
Distribution fees -- Class A 3,176,220
------------------------------------------------------------
Distribution fees -- Class B 6,584,466
------------------------------------------------------------
Distribution fees -- Class C 1,832,004
------------------------------------------------------------
Transfer agent fees -- Class A 2,030,699
------------------------------------------------------------
Transfer agent fees -- Class B 1,026,452
------------------------------------------------------------
Transfer agent fees -- Class C 285,591
------------------------------------------------------------
Trustees' fees 13,083
------------------------------------------------------------
Other 386,007
============================================================
Total expenses 26,359,681
============================================================
Less: Expenses paid indirectly (38,373)
============================================================
Net expenses 26,321,308
============================================================
Net investment income 52,815,296
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (23,087,985)
------------------------------------------------------------
Foreign currencies (15,583)
------------------------------------------------------------
Foreign currency contracts 183,390
------------------------------------------------------------
Futures contracts (34,977,132)
------------------------------------------------------------
Option contracts written 2,104,564
============================================================
(55,792,746)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (306,618,681)
------------------------------------------------------------
Foreign currencies (57,121)
------------------------------------------------------------
Foreign currency contracts 250,078
------------------------------------------------------------
Futures contracts 3,796,798
============================================================
(302,628,926)
============================================================
Net gain (loss) from investment securities,
foreign currencies, foreign currency
contracts, futures contracts and option
contracts: (358,421,672)
============================================================
Net increase (decrease) in net assets
resulting from operations $(305,606,376)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-119
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the year ended December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
-------------- --------------
OPERATIONS:
Net investment income $ 52,815,296 $ 93,697,007
----------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, foreign currency contracts, futures
contracts and option contracts (55,792,746) 8,037,010
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies, foreign
currency contracts and futures contracts (302,628,926) (315,446,121)
==============================================================================================
Net increase (decrease) in net assets resulting from
operations (305,606,376) (213,712,104)
==============================================================================================
Distributions to shareholders from net investment income:
Class A (35,817,030) (54,663,293)
----------------------------------------------------------------------------------------------
Class B (13,521,961) (22,292,342)
----------------------------------------------------------------------------------------------
Class C (3,776,915) (5,320,796)
----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (39,511,188)
----------------------------------------------------------------------------------------------
Class B -- (21,396,291)
----------------------------------------------------------------------------------------------
Class C -- (5,732,223)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 215,234,733 922,806,014
----------------------------------------------------------------------------------------------
Class B 48,927,225 291,069,331
----------------------------------------------------------------------------------------------
Class C 25,356,207 196,576,584
==============================================================================================
Net increase (decrease) in net assets (69,204,117) 1,047,823,692
==============================================================================================
NET ASSETS:
Beginning of period 4,231,973,864 3,184,150,172
==============================================================================================
End of period $4,162,769,747 $4,231,973,864
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $4,098,798,290 $3,809,280,125
----------------------------------------------------------------------------------------------
Undistributed net investment income (2,867,575) 1,041,061
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, foreign currency
contracts, futures contracts and option contracts (92,325,148) (36,532,402)
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts and futures
contracts 159,164,180 458,185,080
==============================================================================================
$4,162,769,747 $4,231,973,864
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-120
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Balanced Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve as high a total return as possible, consistent with preservation
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. Bond premiums and
discounts are amortized and/or accreted for financial reporting purposes.
The Fund may engage in dollar roll transactions with respect to mortgage
backed securities issued by GNMA, FNMA and FHLMC. In a dollar roll
transaction, the Fund sells a mortgage backed security held in the Fund to a
financial institution such as a bank or broker-dealer, and simultaneously
agrees to repurchase a substantially similar security (same type, coupon and
maturity) from the institution at a later date at an agreed upon price. The
mortgage backed securities that are repurchased will bear the same interest
rate as those sold, but generally will be collateralized by different pools
of mortgages with prepayment histories. During the period between the sale
and repurchase, the Fund will not be entitled to receive interest and
principal payments on securities sold. Proceeds of the sale will be invested
in short-term instruments, and the income from these investments, together
with any additional fee income received on the sale, could generate income
for the Fund exceeding the yield on the security sold.
Dollar roll transactions involve the risk that the market value of the
securities retained by the Fund may decline below the price of the securities
that the Fund has sold but is obligated to repurchase under the agreement. In
the event the buyer of securities in a dollar roll transaction files for
bankruptcy or
FS-121
becomes insolvent, the Fund's use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities.
C. Distributions -- Distributions from income are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
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.
Outstanding foreign currency contracts at June 30, 2001 were as follows:
CONTRACT TO
SETTLEMENT ----------------------- UNREALIZED
DATE CURRENCY DELIVER RECEIVE VALUE APPRECIATION
---------- -------- ---------- ---------- ---------- ------------
09/10/01 AUD 10,500,000 $5,376,000 $5,343,552 $32,448
==========================================================================
|
G. 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.
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. 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.
J. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-CHANGE IN ACCOUNTING PRINCIPLE
As required, effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. Prior to January 1, 2001, the Fund did not amortize premiums on debt securities. The cumulative effect of this accounting change had no impact on total net assets of the Fund, but resulted in a $3,608,026 reduction in the cost of securities and a corresponding $3,608,026 increase in net unrealized gains and losses, based on securities held by the Fund on January 1, 2001.
FS-122
The effect of this change in 2001 was to decrease net investment income by $1,568,866, increase net unrealized gains and losses by $1,313,368, increase net realized gains and losses by $255,498, decrease net investment income per share by $0.01, increase net realized and unrealized gains and losses per share by $0.01, and decrease the ratio of net investment income to average net assets by 0.07%.
NOTE 3-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.75% of the first
$150 million of the Fund's average daily net assets, plus 0.50% of the Fund's
average daily net assets in excess of $150 million.
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 June 30, 2001, AIM was
paid $115,466 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 June 30, 2001, AFS
was paid $1,279,278 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $3,176,220,
$6,584,466 and $1,832,004, respectively, as compensation under the Plans.
AIM Distributors received commissions of $418,635 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $40,807 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $3,661
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 4-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $38,373 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $38,373.
NOTE 5-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 6-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 June 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 7-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 June 30, 2001, securities with an aggregate value of $532,324,170 were on
loan to brokers. The loans were secured by cash collateral of $538,616,646,
received by the Fund and subsequently invested in affiliated money market funds
as follows: $269,308,323 in STIC Liquid Assets Portfolio and $269,308,323 in
STIC Prime Portfolio. For the six months ended June 30, 2001, the Fund received
fees of $753,216 for securities lending.
FS-123
NOTE 8-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2001 was
$1,787,928,378 and $1,362,334,572, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 409,346,382 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (247,978,089) ========================================================= Net unrealized appreciation of investment securities $ 161,368,293 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $4,040,201,514. |
NOTE 9-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
Beginning of period -- $ --
----------------------------------------------------------
Written 7,680 2,254,644
----------------------------------------------------------
Closed (2,240) (754,855)
----------------------------------------------------------
Expired (5,440) (1,499,789)
==========================================================
End of period -- $ --
__________________________________________________________
==========================================================
|
NOTE 10-FUTURES CONTRACTS
On June 30, 2001, $36,560,400 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts as of June 30, 2001 were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- ------------- ------------ --------------
Nasdaq 100 Index 241 Sept.-01/Long $ 44,500,650 $ 3,909,898
--------------------------------------------------------------------------------------------------------------------------
S&P 500 Index 897 Sept.-01/Long 276,208,725 (10,232,079)
==========================================================================================================================
$320,709,375 $ (6,322,181)
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
NOTE 11-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the year ended December 31, 2000 were as follows:
JUNE 30, DECEMBER 31,
2001 2000
---------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- --------------
Sold:
Class A 20,709,542 $ 600,592,277 44,686,844 $1,459,628,858
---------------------------------------------------------------------------------------------------------------------------
Class B 5,050,458 145,394,517 13,281,625 433,100,994
---------------------------------------------------------------------------------------------------------------------------
Class C 2,372,723 69,103,169 7,345,840 240,137,040
===========================================================================================================================
Issued as reinvestment of dividends:
Class A 1,199,837 32,950,182 2,771,578 87,115,195
---------------------------------------------------------------------------------------------------------------------------
Class B 436,080 11,947,446 1,260,443 39,350,153
---------------------------------------------------------------------------------------------------------------------------
Class C 115,168 3,156,855 313,857 9,736,859
===========================================================================================================================
Reacquired:
Class A (14,622,346) (418,307,726) (19,211,948) (623,938,039)
---------------------------------------------------------------------------------------------------------------------------
Class B (3,815,578) (108,414,738) (5,548,847) (181,381,816)
---------------------------------------------------------------------------------------------------------------------------
Class C (1,645,056) (46,903,817) (1,639,854) (53,297,315)
===========================================================================================================================
9,800,828 $ 289,518,165 43,259,538 $1,410,451,929
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
FS-124
NOTE 12-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 DECEMBER 31,
JUNE 30, --------------------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997 1996
---------------- ---------- ---------- ---------- -------- --------
Net asset value, beginning of period $ 30.10 $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.37(b) 0.92 0.82 0.71 0.60 0.66
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both
realized and unrealized) (2.40) (2.23) 4.46 2.45 4.66 2.99
=================================================================================================================================
Total from investment operations (2.03) (1.31) 5.28 3.16 5.26 3.65
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.40) (0.79) (0.82) (0.65) (0.55) (0.55)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.49) -- (0.06) (0.77) (0.48)
=================================================================================================================================
Total distributions (0.40) (1.28) (0.82) (0.71) (1.32) (1.03)
=================================================================================================================================
Net asset value, end of period $ 27.67 $ 30.10 $ 32.69 $ 28.23 $ 25.78 $ 21.84
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (6.73)% (4.18)% 19.04% 12.46% 24.41% 19.25%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,507,491 $2,507,641 $1,800,350 $1,318,230 $683,633 $334,189
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 0.95%(d) 0.96% 0.94% 0.95% 0.98% 1.15%
=================================================================================================================================
Ratio of net investment income to average
net assets 2.63%(b)(d) 2.80% 2.81% 2.81% 2.48% 2.97%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 35% 55% 65% 43% 66% 72%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) As required, effective January 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. Had the Fund not amortized premiums
on debt securities, the net investment income per share would have been
$0.38 and the ratio of net investment income to average net assets would
have been 2.70%. Per share and ratios for periods prior to January 1, 2001
have not been restated to reflect this change in presentation.
(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
$2,562,031,240.
CLASS B
----------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ------------------------------------------------------------
2001 2000(a) 1999(a) 1998(a) 1997 1996
---------------- ---------- ---------- -------- -------- --------
Net asset value, beginning of period $ 30.01 $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.27(b) 0.66 0.58 0.42 0.38 0.48
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both
realized and unrealized) (2.39) (2.23) 4.45 2.51 4.68 2.99
=================================================================================================================================
Total from investment operations (2.12) (1.57) 5.03 2.93 5.06 3.47
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.29) (0.54) (0.60) (0.44) (0.37) (0.38)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.49) -- (0.06) (0.77) (0.48)
=================================================================================================================================
Total distributions (0.29) (1.03) (0.60) (0.50) (1.14) (0.86)
=================================================================================================================================
Net asset value, end of period $ 27.60 $ 30.01 $ 32.61 $ 28.18 $ 25.75 $ 21.83
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (7.05)% (4.93)% 18.08% 11.53% 23.42% 18.28%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,295,830 $1,358,823 $1,183,215 $894,165 $486,506 $237,082
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.70%(d) 1.73% 1.75% 1.76% 1.79% 1.97%
=================================================================================================================================
Ratio of net investment income to average net
assets 1.88%(b)(d) 2.03% 2.00% 2.00% 1.67% 2.15%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 35% 55% 65% 43% 66% 72%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) As required, effective January 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. Had the Fund not amortized premiums
on debt securities, the net investment income per share would have been
$0.28 and the ratio of net investment income to average net assets would
have been 1.95%. Per share and ratios for periods prior to January 1, 2001
have not been restated to reflect this change in presentation.
(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
$1,327,806,610.
FS-125
NOTE 12-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
------------------------------------------------------------------------
AUGUST 4, 1997
(DATE SALES
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, COMMENCED) TO
JUNE 30, -------------------------------- DECEMBER 31,
2001 2000(a) 1999(a) 1998(a) 1997
---------------- -------- -------- -------- --------------
Net asset value, beginning of period $ 30.05 $ 32.65 $ 28.21 $ 25.76 $25.55
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.27(b) 0.66 0.58 0.42 0.16
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.40) (2.23) 4.46 2.53 1.01
=================================================================================================================================
Total from investment operations (2.13) (1.57) 5.04 2.95 1.17
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.29) (0.54) (0.60) (0.44) (0.19)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.49) -- (0.06) (0.77)
=================================================================================================================================
Total distributions (0.29) (1.03) (0.60) (0.50) (0.96)
=================================================================================================================================
Net asset value, end of period $ 27.63 $ 30.05 $ 32.65 $ 28.21 $25.76
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (7.07)% (4.93)% 18.09% 11.60% 4.67%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $359,449 $365,510 $200,585 $114,163 $9,394
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.70%(d) 1.73% 1.75% 1.73% 1.78%(e)
=================================================================================================================================
Ratio of net investment income to average net assets 1.88%(b)(d) 2.03% 2.00% 2.03% 1.68%(e)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 35% 55% 65% 43% 66%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) As required, effective January 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. Had the Fund not amortized premiums
on debt securities, the net investment income per share would have been
$0.28 and the ratio of net investment income to average net assets would
have been 1.95%. Per share and ratios for periods prior to January 1, 2001
have not been restated to reflect this change in presentation.
(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
$369,437,197.
(e) Annualized.
FS-126
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-96.51%
AUSTRIA-1.22%
Gericom A.G. (Computer Hardware) 1,800 $ 52,255
--------------------------------------------------------------------
Palfinger A.G. (Industrial Machinery) 2,900 89,743
====================================================================
141,998
====================================================================
BELGIUM-2.43%
EVS Broadcast Equipment S.A. (Electrical
Components & Equipment) 2,300 58,484
--------------------------------------------------------------------
Omega Pharma S.A. (Health Care Supplies) 5,800 223,682
====================================================================
282,166
====================================================================
FINLAND-3.52%
Oyj Hartwall Abp (Brewers)(a) 8,700 139,887
--------------------------------------------------------------------
Vacon Oyj (Electrical Components & Equipment) 31,300 267,952
====================================================================
407,839
====================================================================
FRANCE-27.12%
Altedia (Employment Services) 4,750 144,537
--------------------------------------------------------------------
April Group (Insurance Brokers) 10,300 183,336
--------------------------------------------------------------------
Arkopharma (Packaged Foods) 940 113,456
--------------------------------------------------------------------
Beneteau (Leisure Products) 1,200 111,883
--------------------------------------------------------------------
Bonduelle SCA (Packaged Foods) 5,450 194,940
--------------------------------------------------------------------
Brime Technologies (Diversified Commercial
Services)(a) 3,900 157,183
--------------------------------------------------------------------
Camaieu (Apparel Retail) 8,200 166,738
--------------------------------------------------------------------
Christian Dalloz (Industrial Machinery)(a) 1,700 154,899
--------------------------------------------------------------------
Deveaux S.A. (Home Furnishings) 2,400 167,418
--------------------------------------------------------------------
Marionnaud Parfumeries (Specialty Stores)(a) 1,700 150,432
--------------------------------------------------------------------
Marionnaud Parfumeries-Rts., expires 06/30/02
(Specialty Stores)(b) 1,700 1,383
--------------------------------------------------------------------
MEDIDEP S.A. (Health Care Distributors &
Services)(a) 3,000 305,136
--------------------------------------------------------------------
Penauille Polyservices (Diversified
Commercial Services) 1,000 56,789
--------------------------------------------------------------------
Pinguely-Haulotte (Construction & Farm
Machinery) 7,500 122,372
--------------------------------------------------------------------
Riber S.A. (Electronic Equipment &
Instruments)(a) 3,650 20,109
--------------------------------------------------------------------
Royal Canin S.A. (Packaged Foods) 1,300 121,097
--------------------------------------------------------------------
Seche Environnement (Environmental Services) 1,650 130,764
--------------------------------------------------------------------
Silicon-On-Insulator Technologies (SOITEC)
(Electronic Equipment & Instruments)(a) 10,770 176,548
--------------------------------------------------------------------
Solving International S.A. (Diversified
Commercial Services)(a) 1,900 112,731
--------------------------------------------------------------------
TRIGANO (Automobile Manufacturers) 3,990 135,277
--------------------------------------------------------------------
UBI Soft Entertainment S.A. (Application
Software)(a) 1,900 64,595
--------------------------------------------------------------------
Vallourec S.A. (Industrial Machinery)(a) 3,300 183,209
--------------------------------------------------------------------
|
MARKET
SHARES VALUE
FRANCE-(CONTINUED)
Zodiac S.A. (Aerospace & Defense) 700 $ 170,164
====================================================================
3,144,996
====================================================================
GERMANY-6.48%
ELMOS Semiconductor A.G. (Electronic
Equipment & Instruments)(a) 6,100 111,163
--------------------------------------------------------------------
FJA A.G. (Electronic Equipment & Instruments) 2,000 116,799
--------------------------------------------------------------------
Gfk A.G. (Diversified Commercial Services) 2,260 54,594
--------------------------------------------------------------------
Hugo Boss A.G.-Pfd (Apparel & Accessories) 675 188,803
--------------------------------------------------------------------
Suess MicroTec A.G. (Semiconductor
Equipment)(a) 4,300 125,741
--------------------------------------------------------------------
Wedeco A.G. Water Technology (Water
Utilities)(a) 4,600 153,814
====================================================================
750,914
====================================================================
GREECE-1.25%
Folli-Follie (Apparel & Accessories) 7,700 144,497
====================================================================
IRELAND-5.97%
Anglo Irish Bank Corp. PLC (Banks)(a) 77,800 296,085
--------------------------------------------------------------------
Grafton Group PLC (Trading Companies &
Distributors) 65,900 189,355
--------------------------------------------------------------------
IFG Group PLC (Diversified Financial
Services) 79,800 206,297
====================================================================
691,737
====================================================================
ITALY-1.03%
Tod's S.p.A. (Apparel & Accessories)(a) 3,000 119,766
====================================================================
NETHERLANDS-5.18%
Fugro N.V. (Oil & Gas Equipment & Services) 3,200 178,471
--------------------------------------------------------------------
Heijmans N.V. (Construction & Engineering) 7,104 139,695
--------------------------------------------------------------------
Nutreco Holding N.V. (Agricultural Products) 4,518 193,771
--------------------------------------------------------------------
Van der Moolen Holding N.V. (Diversified
Financial Services) 3,370 88,263
====================================================================
600,200
====================================================================
NORWAY-2.58%
Tandberg A.S.A. (Electronic Equipment &
Instruments)(a) 8,800 111,791
--------------------------------------------------------------------
TGS Nopec Geophysical Co. A.S.A (Oil & Gas
Equipment & Services)(a) 12,600 187,755
====================================================================
299,546
====================================================================
SPAIN-2.82%
Grupo Auxiliar Metalurgico, S.A. (Gamesa)
(Aerospace & Defense)(a) 5,500 117,011
--------------------------------------------------------------------
NH Hoteles, S.A. (Hotels) 12,700 150,380
--------------------------------------------------------------------
Prosegur, CIA de Seguridad S.A. (Diversified
Commercial Services)(a) 4,600 59,459
====================================================================
326,850
====================================================================
|
FS-127
MARKET
SHARES VALUE
SWEDEN-13.74%
Biacore International A.B. (Health Care
Equipment)(a) 4,100 $ 152,746
--------------------------------------------------------------------
Clas Ohlson A.B.-Class B (Internet Retail) 3,850 144,495
--------------------------------------------------------------------
D. Carnegie & Co. A.B. (Diversified Financial
Services)(a) 19,300 221,033
--------------------------------------------------------------------
Elekta A.B.-Class B (Health Care
Equipment)(a) 15,000 103,486
--------------------------------------------------------------------
Getinge Industrier A.B.-Class B (Health Care
Equipment) 12,400 215,583
--------------------------------------------------------------------
Micronic Laser Systems A.B. (Semiconductor
Equipment)(a) 4,990 95,476
--------------------------------------------------------------------
Nobel Biocare A.B. (Health Care Supplies) 3,700 124,910
--------------------------------------------------------------------
Perbio Science A.B. (Pharmaceuticals)(a) 13,300 165,776
--------------------------------------------------------------------
Q-Med A.B. (Health Care Equipment)(a) 12,400 195,621
--------------------------------------------------------------------
Swedish Match A.B. (Tobacco) 37,200 174,519
====================================================================
1,593,645
====================================================================
SWITZERLAND-1.20%
Tecan A.G. (Health Care Equipment) 1,680 139,307
====================================================================
UNITED KINGDOM-21.97%
Amey PLC (Diversified Commercial Services) 23,800 116,809
--------------------------------------------------------------------
Arcadia Group PLC (Apparel Retail)(a) 41,500 167,151
--------------------------------------------------------------------
Chemring Group PLC (Aerospace & Defense) 18,300 86,336
--------------------------------------------------------------------
Electronics Boutique PLC (Computer &
Electronics Retail) 109,700 164,919
--------------------------------------------------------------------
Enterprise Inns PLC (Restaurants) 13,400 106,622
--------------------------------------------------------------------
Fitness First PLC (Diversified Commercial
Services)(a) 21,900 180,424
--------------------------------------------------------------------
|
MARKET
SHARES VALUE
UNITED KINGDOM-(CONTINUED)
Geest PLC (Agricultural Products) 20,500 $ 197,039
--------------------------------------------------------------------
iSoft Group PLC (Application Software) 69,200 241,687
--------------------------------------------------------------------
JJB Sports PLC (Apparel Retail)(a) 5,600 64,235
--------------------------------------------------------------------
John David Sports PLC (Apparel Retail) 42,310 201,994
--------------------------------------------------------------------
Luminar PLC (Restaurants) 5,400 66,922
--------------------------------------------------------------------
MFI Furniture Group PLC (Home Furnishings) 98,800 162,446
--------------------------------------------------------------------
Pace Micro Technology PLC (Consumer
Electronics) 12,270 66,009
--------------------------------------------------------------------
RPS Group PLC (Environmental Services) 48,733 115,300
--------------------------------------------------------------------
SFI Group PLC (Restaurants) 56,500 188,578
--------------------------------------------------------------------
Torex PLC (Consumer Finance) 14,700 132,493
--------------------------------------------------------------------
Victrex PLC (Diversified Chemicals) 12,900 71,170
--------------------------------------------------------------------
Wellington Underwriting PLC (Property &
Casualty Insurance) 40,800 90,785
--------------------------------------------------------------------
WSP Group PLC (Construction & Engineering) 19,900 126,954
====================================================================
2,547,873
====================================================================
Total Foreign Stocks & Other Equity
Interests (Cost $11,493,609) 11,191,334
====================================================================
MONEY MARKET FUNDS-1.25%
STIC Liquid Assets Portfolio(c) 72,425 72,425
--------------------------------------------------------------------
STIC Prime Portfolio(c) 72,425 72,425
====================================================================
Total Money Market Funds (Cost $144,850) 144,850
====================================================================
TOTAL INVESTMENTS--97.76% (Cost $11,638,459) 11,336,184
====================================================================
OTHER ASSETS LESS LIABILITIES--2.24% 259,203
====================================================================
NET ASSETS-100.00% $11,595,387
____________________________________________________________________
====================================================================
|
Investment Abbreviations:
Pfd. - Preferred Rts. - Rights |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Acquired as part of a unit with or in exchange for other securities.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-128
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$11,638,459) $11,336,184
------------------------------------------------------------
Foreign currencies, at value (cost $171,461) 170,604
------------------------------------------------------------
Receivables for:
Investments sold 82,196
------------------------------------------------------------
Fund shares sold 1,861
------------------------------------------------------------
Dividends 13,000
------------------------------------------------------------
Due from Advisor 30,015
------------------------------------------------------------
Investment for deferred compensation plan 4,638
------------------------------------------------------------
Other assets 43,143
============================================================
Total assets 11,681,641
============================================================
LIABILITIES:
Payables for:
Investments purchased 19,182
------------------------------------------------------------
Fund shares reacquired 906
------------------------------------------------------------
Deferred compensation plan 4,638
------------------------------------------------------------
Accrued distribution fees 10,430
------------------------------------------------------------
Accrued transfer agent fees 5,128
------------------------------------------------------------
Accrued operating expenses 45,970
============================================================
Total liabilities 86,254
============================================================
Net assets applicable to shares outstanding $11,595,387
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 8,119,369
____________________________________________________________
============================================================
Class B $ 2,459,089
____________________________________________________________
============================================================
Class C $ 1,016,929
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 1,120,900
____________________________________________________________
============================================================
Class B 340,641
____________________________________________________________
============================================================
Class C 140,927
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 7.24
------------------------------------------------------------
Offering price per share:
(Net asset value of $7.24 4 94.50%) $ 7.66
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 7.22
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 7.22
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$11,753) $ 83,129
------------------------------------------------------------
Dividends from affiliated money market funds 19,337
------------------------------------------------------------
Interest 65
============================================================
Total investment income 102,531
============================================================
EXPENSES:
Advisory fees 58,793
------------------------------------------------------------
Administrative services fees 24,795
------------------------------------------------------------
Custodian fees 57,217
------------------------------------------------------------
Distribution fees -- Class A 15,053
------------------------------------------------------------
Distribution fees -- Class B 13,293
------------------------------------------------------------
Distribution fees -- Class C 5,490
------------------------------------------------------------
Interest 894
------------------------------------------------------------
Transfer agent fees -- Class A 13,683
------------------------------------------------------------
Transfer agent fees -- Class B 5,035
------------------------------------------------------------
Transfer agent fees -- Class C 2,079
------------------------------------------------------------
Registration and filing fees 72,149
------------------------------------------------------------
Professional fees 25,804
------------------------------------------------------------
Trustees' fees 4,754
------------------------------------------------------------
Other 15,090
============================================================
Total expenses 314,129
============================================================
Less: Fees waived and expenses reimbursed (176,158)
------------------------------------------------------------
Expenses paid indirectly (102)
============================================================
Net expenses 137,869
============================================================
Net investment income (loss) (35,338)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities (2,371,769)
------------------------------------------------------------
Foreign currencies 251
============================================================
(2,371,518)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (541,058)
------------------------------------------------------------
Foreign currencies (2,150)
============================================================
(543,208)
============================================================
Net gain (loss) from investment securities
and foreign currencies: (2,914,726)
============================================================
Net increase (decrease) in net assets
resulting from operations $(2,950,064)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-129
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the period August 31, 2000 (date
operations commenced) through December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
----------- ------------
OPERATIONS:
Net investment income (loss) $ (35,338) $ (43,238)
-----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies (2,371,518) (588,978)
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (543,208) 238,944
=========================================================================================
Net increase (decrease) in net assets resulting from
operations (2,950,064) (393,272)
=========================================================================================
Distributions to shareholders from net investment income:
Class A -- (38,008)
-----------------------------------------------------------------------------------------
Class B -- (9,040)
-----------------------------------------------------------------------------------------
Class C -- (3,158)
-----------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,568,924 8,921,798
-----------------------------------------------------------------------------------------
Class B 258,174 2,932,808
-----------------------------------------------------------------------------------------
Class C 189,041 1,118,184
=========================================================================================
Net increase (decrease) in net assets (933,925) 12,529,312
=========================================================================================
NET ASSETS:
Beginning of period 12,529,312 --
=========================================================================================
End of period $11,595,387 $12,529,312
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $14,978,336 $12,962,197
-----------------------------------------------------------------------------------------
Undistributed net investment income (loss) (74,378) (39,040)
-----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (3,004,307) (632,789)
-----------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities and foreign currencies (304,264) 238,944
=========================================================================================
$11,595,387 $12,529,312
_________________________________________________________________________________________
=========================================================================================
|
See Notes to Financial Statements.
FS-130
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM European Small Company Fund (the "Fund") is a series portfolio of AIM Funds
Group (the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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.
The Fund has a capital loss carryforward of $220,935 as of December 31,
2000 which may be carried forward to offset future taxable gains, if any,
which expires, if not previously utilized, through 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
FS-131
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 and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.95% of the Fund's
average daily net assets. For the six months ended June 30, 2001, AIM waived
fees of $58,793 and reimbursed expenses of $117,365.
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 June 30, 2001, AIM was
paid $24,795 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 June 30, 2001, AFS
was paid $11,914 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
0.35% 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 June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $15,053,
$13,293 and $5,490, respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,397 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $16,708 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,732
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $102 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $102.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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 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 June 30, 2001 was
$12,634,815 and $9,902,815, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 551,124 -------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (853,399) ======================================================== Net unrealized appreciation (depreciation) of investment securities $(302,275) ________________________________________________________ ======================================================== Investments have the same cost for tax and financial statement purposes. |
FS-132
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the period August 31, 2000 (date operations commenced) through December 31, 2000:
JUNE 30, 2001 DECEMBER 31, 2000
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ---------- --------- -----------
Sold:
Class A 691,061 $5,671,861 1,020,627 $ 9,668,343
-------------------------------------------------------------------------------------------------
Class B 57,890 489,143 314,840 2,969,953
-------------------------------------------------------------------------------------------------
Class C 164,626 1,317,287 119,558 1,140,988
=================================================================================================
Issued as reinvestment of dividends:
Class A -- -- 4,177 37,222
-------------------------------------------------------------------------------------------------
Class B -- -- 1,014 9,037
-------------------------------------------------------------------------------------------------
Class C -- -- 353 3,141
=================================================================================================
Reacquired:
Class A (508,462) (4,102,937) (86,503) (783,767)
-------------------------------------------------------------------------------------------------
Class B (27,974) (230,969) (5,129) (46,182)
-------------------------------------------------------------------------------------------------
Class C (140,688) (1,128,246) (2,922) (25,945)
=================================================================================================
236,453 $2,016,139 1,366,015 $12,972,790
_________________________________________________________________________________________________
=================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 9.17 $10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.01) (0.04)
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (1.92) (0.74)
==================================================================================================
Total from investment operations (1.93) (0.78)
==================================================================================================
Less distributions from net investment income -- (0.05)
==================================================================================================
Net asset value, end of period $ 7.24 $ 9.17
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (21.05)% (7.84)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 8,119 $8,606
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.02%(c) 2.07%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 4.87%(c) 6.28%(d)
==================================================================================================
Ratio of net investment loss to average net assets (0.36)%(c) (1.28)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 86% 25%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $8,672,790.
(d) Annualized.
FS-133
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 9.17 $10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.06)
--------------------------------------------------------------------------------------------------
Net losses on securities (both realized and unrealized) (1.91) (0.74)
==================================================================================================
Total from investment operations (1.95) (0.80)
==================================================================================================
Less distributions from net investment income -- (0.03)
==================================================================================================
Net asset value, end of period $ 7.22 $ 9.17
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (21.27)% (7.99)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 2,459 $2,851
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.73%(c) 2.77%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 5.58%(c) 6.98%(d)
==================================================================================================
Ratio of net investment loss to average net assets (1.07)%(c) (1.98)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 86% 25%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $2,680,627.
(d) Annualized.
CLASS C
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 9.17 $10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.06)
--------------------------------------------------------------------------------------------------
Net losses on securities (both realized and unrealized) (1.91) (0.74)
==================================================================================================
Total from investment operations (1.95) (0.80)
==================================================================================================
Less distributions from net investment income -- (0.03)
==================================================================================================
Net asset value, end of period $ 7.22 $ 9.17
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (21.27)% (7.99)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 1,017 $1,073
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.73%(c) 2.77%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 5.58%(c) 6.98%(d)
==================================================================================================
Ratio of net investment loss to average net assets (1.07)%(c) (1.98)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 86% 25%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $1,107,218.
(d) Annualized.
FS-134
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC STOCKS-73.09%
APPLICATION SOFTWARE-0.18%
Henry (Jack) & Associates, Inc. 21,700 $ 672,700
========================================================================
BROADCASTING & CABLE TV-1.32%
General Motors Corp.-Class H(a) 58,500 1,184,625
------------------------------------------------------------------------
Univision Communications Inc.-Class A(a) 88,100 3,768,918
========================================================================
4,953,543
========================================================================
CONSTRUCTION & ENGINEERING-0.72%
Quanta Services, Inc.(a) 122,200 2,693,288
========================================================================
DIVERSIFIED METALS & MINING-0.53%
Peabody Energy Corp.(a) 61,000 1,997,750
========================================================================
ELECTRIC UTILITIES-35.33%
AES Corp. (The)(a) 145,800 6,276,690
------------------------------------------------------------------------
Allegheny Energy, Inc. 286,000 13,799,500
------------------------------------------------------------------------
Calpine Corp.(a) 82,000 3,099,600
------------------------------------------------------------------------
Constellation Energy Group, Inc. 268,000 11,416,800
------------------------------------------------------------------------
DTE Energy Co. 172,000 7,987,680
------------------------------------------------------------------------
Duke Energy Corp. 282,000 11,000,820
------------------------------------------------------------------------
Edison International(a) 216,000 2,408,400
------------------------------------------------------------------------
Exelon Corp. 185,000 11,862,200
------------------------------------------------------------------------
FPL Group, Inc. 175,000 10,536,750
------------------------------------------------------------------------
Mirant Corp.(a) 161,850 5,567,640
------------------------------------------------------------------------
Montana Power Co. (The)(a) 141,100 1,636,760
------------------------------------------------------------------------
Niagara Mohawk Holdings Inc.(a) 510,300 9,027,207
------------------------------------------------------------------------
NRG Energy, Inc.(a) 283,300 6,255,264
------------------------------------------------------------------------
PG&E Corp.(a) 170,000 1,904,000
------------------------------------------------------------------------
Pinnacle West Capital Corp. 273,600 12,968,640
------------------------------------------------------------------------
Public Service Enterprise Group Inc. 43,000 2,102,700
------------------------------------------------------------------------
Reliant Energy, Inc. 163,000 5,250,230
------------------------------------------------------------------------
Reliant Resources, Inc.(a) 56,000 1,383,200
------------------------------------------------------------------------
Southern Co. (The) 62,500 1,453,125
------------------------------------------------------------------------
Xcel Energy, Inc. 226,000 6,429,700
========================================================================
132,366,906
========================================================================
GAS UTILITIES-6.20%
El Paso Corp. 72,900 3,830,166
------------------------------------------------------------------------
El Paso Energy Cap Trust I-$2.38 Conv. Pfd. 74,500 4,898,375
------------------------------------------------------------------------
KeySpan Corp. 75,000 2,736,000
------------------------------------------------------------------------
NiSource Inc. 431,000 11,779,230
========================================================================
23,243,771
========================================================================
HEAVY ELECTRICAL EQUIPMENT-0.62%
Active Power, Inc.(a) 65,500 1,092,540
------------------------------------------------------------------------
|
MARKET
SHARES VALUE
HEAVY ELECTRICAL EQUIPMENT-(CONTINUED)
Global Power Equipment Group Inc.(a) 42,400 $ 1,242,320
========================================================================
2,334,860
========================================================================
INTEGRATED OIL & GAS-0.88%
Chevron Corp. 36,500 3,303,250
========================================================================
INTEGRATED TELECOMMUNICATION SERVICES-12.45%
BellSouth Corp. 181,000 7,288,870
------------------------------------------------------------------------
Broadwing Inc.(a) 383,344 9,372,761
------------------------------------------------------------------------
McLeodUSA Inc.-Class A(a) 395,400 1,814,886
------------------------------------------------------------------------
Qwest Communications International Inc. 152,100 4,847,427
------------------------------------------------------------------------
SBC Communications Inc. 366,693 14,689,721
------------------------------------------------------------------------
Time Warner Telecom Inc.-Class A(a) 68,700 2,302,824
------------------------------------------------------------------------
Verizon Communications Inc. 118,462 6,337,717
========================================================================
46,654,206
========================================================================
INTERNET SOFTWARE & SERVICES-0.31%
Openwave Systems Inc.(a) 33,600 1,165,920
========================================================================
MULTI-UTILITIES-10.92%
Aquila, Inc.(a) 68,200 1,681,130
------------------------------------------------------------------------
Dynegy Inc.-Class A 272,000 12,648,000
------------------------------------------------------------------------
Energy East Corp. 475,200 9,936,432
------------------------------------------------------------------------
Enron Corp. 100,200 4,909,800
------------------------------------------------------------------------
Mirant Trust I-Series A, $3.13 Conv. Pfd. 30,600 2,203,200
------------------------------------------------------------------------
Williams Cos., Inc. (The) 289,200 9,529,140
========================================================================
40,907,702
========================================================================
NETWORKING EQUIPMENT-0.54%
Cisco Systems, Inc.(a) 70,700 1,286,740
------------------------------------------------------------------------
Juniper Networks, Inc.(a) 23,700 737,070
========================================================================
2,023,810
========================================================================
OIL & GAS EQUIPMENT & SERVICES-0.51%
BJ Services Co.(a) 67,000 1,901,460
========================================================================
OIL & GAS EXPLORATION & PRODUCTION-1.29%
Anadarko Petroleum Corp. 39,800 2,150,394
------------------------------------------------------------------------
Apache Corp. 52,700 2,674,525
========================================================================
4,824,919
========================================================================
TELECOMMUNICATIONS EQUIPMENT-0.63%
Comverse Technology, Inc.(a) 19,000 1,094,780
------------------------------------------------------------------------
JDS Uniphase Corp.(a) 99,900 1,248,750
========================================================================
2,343,530
========================================================================
|
FS-135
MARKET
SHARES VALUE
WIRELESS TELECOMMUNICATION SERVICES-0.66%
MediaOne Group, Inc.-$3.04 Conv. Pfd. 29,200 $ 785,480
------------------------------------------------------------------------
Western Wireless Corp.-Class A(a) 39,700 1,707,100
========================================================================
2,492,580
========================================================================
Total Domestic Stocks (Cost $218,641,818) 273,880,195
========================================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-13.67%
BRAZIL-0.74%
Companhia Paranaense de Energia-Copel-ADR
(Electric Utilities) 370,000 2,778,700
========================================================================
CANADA-1.24%
Nortel Networks Corp. (Telecommunications
Equipment) 53,500 486,315
------------------------------------------------------------------------
TELUS Corp. (Integrated Telecommunication
Services) 55,382 1,247,490
------------------------------------------------------------------------
TELUS Corp.-Class A (Integrated
Telecommunication Services) 18,460 400,739
------------------------------------------------------------------------
Westcoast Energy Inc. (Gas Utilities) 106,300 2,502,302
========================================================================
4,636,846
========================================================================
FINLAND-0.49%
Nokia Oyj-ADR (Telecommunications Equipment) 83,100 1,831,524
========================================================================
FRANCE-1.60%
Suez S.A. (Multi-Utilities) 124,500 4,009,996
------------------------------------------------------------------------
TotalFinaElf S.A. (Integrated Oil & Gas) 14,000 1,962,703
========================================================================
5,972,699
========================================================================
GERMANY-0.70%
E.On A.G. (Electric Utilities) 50,560 2,631,276
========================================================================
ITALY-1.29%
ACEA S.p.A. (Multi-Utilities) 388,800 2,916,490
------------------------------------------------------------------------
Telecom Italia S.p.A. (Integrated
Telecommunication Services) 400,400 1,914,098
========================================================================
4,830,588
========================================================================
JAPAN-0.83%
NTT DoCoMo, Inc. (Wireless Telecommunication
Services) 179 3,114,416
========================================================================
SOUTH KOREA-0.46%
Korea Telecom Corp.-ADR (Integrated
Telecommunication Services) 77,800 1,710,044
========================================================================
SPAIN-2.14%
Endesa, S.A. (Electric Utilities) 227,000 3,624,914
------------------------------------------------------------------------
Telefonica, S.A. (Integrated
Telecommunication Services)(a) 355,838 4,391,417
========================================================================
8,016,331
========================================================================
|
MARKET
SHARES VALUE
UNITED KINGDOM-4.18%
Amdocs Ltd. (Application Software)(a) 55,700 $ 2,999,445
------------------------------------------------------------------------
Kelda Group PLC (Water Utilities) 538,407 2,957,130
------------------------------------------------------------------------
National Grid Group PLC (Electric Utilities) 131,526 970,595
------------------------------------------------------------------------
Scottish Power PLC (Electric Utilities) 711,850 5,243,066
------------------------------------------------------------------------
United Utilities PLC (Multi-Utilities) 151,936 1,441,098
------------------------------------------------------------------------
Vodafone Group PLC (Wireless
Telecommunication Services) 930,665 2,064,282
========================================================================
15,675,616
========================================================================
Total Foreign Stocks & Other Equity
Interests (Cost $57,539,755) 51,198,040
========================================================================
PRINCIPAL
AMOUNT
U.S. DOLLAR DENOMINATED BONDS & NOTES-4.14%
COMPUTER HARDWARE-0.23%
Candescent Technologies Corp., Sr. Conv.
Unsec. Gtd. Sub. Deb., 8.00%, 05/01/03
(Acquired 04/17/98-04/19/01; Cost
$4,556,330)(b)(c)(d) $4,866,000 875,880
========================================================================
ELECTRIC UTILITIES-1.78%
AES Corp. (The), Sr. Unsec. Sub. Notes,
10.25%, 07/15/06 1,000,000 1,010,000
------------------------------------------------------------------------
Mirant Corp., Sr. Notes, 7.90%, 07/15/09
(Acquired 10/16/00; Cost $5,422,184)(b) 5,730,000 5,644,107
========================================================================
6,654,107
========================================================================
GAS UTILITIES-1.26%
Limestone Electron Trust, Sr. Notes, 8.63%,
03/15/03 (Acquired 03/15/00; Cost
$4,550,000)(b) 4,550,000 4,728,860
========================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.52%
AT&T Corp., Unsec. Notes, 7.75%, 03/01/07 1,850,000 1,945,664
========================================================================
MULTI-UTILITIES-0.35%
Dynegy Inc., Sr. Unsec. Deb., 7.13%, 05/15/18 1,400,000 1,315,566
========================================================================
Total U.S. Dollar Denominated Bonds &
Notes (Cost $18,847,949) 15,520,077
========================================================================
PRINCIPAL
AMOUNT(e)
NON-U.S. DOLLAR DENOMINATED BONDS &
NOTES-1.85%
CANADA-0.43%
Teleglobe Canada Inc. (Integrated
Telecommunication Services), Unsec. Deb.,
8.35%, 06/20/03 CAD 2,400,000 1,629,133
========================================================================
UNITED KINGDOM-1.42%
National Grid Co. PLC (Electric Utilities),
Conv. Bonds, 4.25%, 02/17/08 (Acquired
02/05/98; Cost $4,574,700)(b) GBP 2,760,000 5,302,131
========================================================================
Total Non-U.S. Dollar Denominated Bonds &
Notes (Cost $6,372,034) 6,931,264
========================================================================
|
FS-136
MARKET
SHARES VALUE
MONEY MARKET FUNDS-6.57%
STIC Liquid Assets Portfolio(f) 12,310,642 $ 12,310,642
------------------------------------------------------------------------
STIC Prime Portfolio(f) 12,310,642 $ 12,310,642
========================================================================
Total Money Market Funds (Cost
$24,621,284) 24,621,284
========================================================================
TOTAL INVESTMENTS-99.32% (Cost $326,022,840) 372,150,860
========================================================================
OTHER ASSETS LESS LIABILITIES-0.68% 2,558,071
========================================================================
NET ASSETS-100.00% $374,708,931
________________________________________________________________________
========================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt CAD - Canadian Dollars Conv. - Convertible Deb. - Debentures GBP - British Pound Sterling Gtd. - Guaranteed Pfd. - Preferred Sr. - Senior Sub. - Subordinated Unsec. - Unsecured |
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
06/30/01 was $16,550,978, which represented 4.42% of the Fund's net assets.
(c) Defaulted security. Currently, the issuer is in default with respect to
interest payments.
(d) Security fair valued in accordance with the procedures established by the
Board of Trustees.
(e) Foreign denominated security. Par value is denominated in currency
indicated.
(f) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-137
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$326,022,840)* $372,150,860
------------------------------------------------------------
Foreign currencies, at value (cost $1,909,738) 1,911,135
------------------------------------------------------------
Receivables for:
Investments sold 86,997
------------------------------------------------------------
Fund shares sold 412,233
------------------------------------------------------------
Dividends and interest 1,019,087
------------------------------------------------------------
Investment for deferred compensation plan 43,755
------------------------------------------------------------
Collateral for securities loaned 43,681,038
------------------------------------------------------------
Other assets 26,262
============================================================
Total assets 419,331,367
============================================================
LIABILITIES:
Payables for:
Fund shares reacquired 484,260
------------------------------------------------------------
Dividends 146
------------------------------------------------------------
Deferred compensation plan 43,755
------------------------------------------------------------
Collateral upon return of securities loaned 43,681,038
------------------------------------------------------------
Accrued distribution fees 345,959
------------------------------------------------------------
Accrued trustees' fees 1,311
------------------------------------------------------------
Accrued transfer agent fees 13,362
------------------------------------------------------------
Accrued operating expenses 52,605
============================================================
Total liabilities 44,622,436
============================================================
Net assets applicable to shares outstanding $374,708,931
____________________________________________________________
============================================================
NET ASSETS:
Class A $223,568,392
____________________________________________________________
============================================================
Class B $135,530,882
____________________________________________________________
============================================================
Class C $ 15,609,657
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 11,521,561
____________________________________________________________
============================================================
Class B 7,003,890
____________________________________________________________
============================================================
Class C 807,158
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 19.40
------------------------------------------------------------
Offering price per share:
(Net asset value of $19.40 divided by
94.50%) $ 20.53
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 19.35
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 19.34
____________________________________________________________
============================================================
|
* At June 30, 2001, securities with an aggregate market value of $43,252,862 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$87,339) $ 3,618,872
------------------------------------------------------------
Dividends from affiliated money market funds 759,140
------------------------------------------------------------
Interest 741,956
------------------------------------------------------------
Security lending income 14,334
============================================================
Total investment income 5,134,302
============================================================
EXPENSES:
Advisory fees 1,122,768
------------------------------------------------------------
Administrative services fees 50,861
------------------------------------------------------------
Custodian fees 39,472
------------------------------------------------------------
Distribution fees -- Class A 305,205
------------------------------------------------------------
Distribution fees -- Class B 738,566
------------------------------------------------------------
Distribution fees -- Class C 84,140
------------------------------------------------------------
Transfer agent fees -- Class A 157,394
------------------------------------------------------------
Transfer agent fees -- Class B 102,897
------------------------------------------------------------
Transfer agent fees -- Class C 11,723
------------------------------------------------------------
Trustees' fees 6,449
------------------------------------------------------------
Other 101,594
============================================================
Total expenses 2,721,069
============================================================
Less: Expenses paid indirectly (4,162)
============================================================
Net expenses 2,716,907
============================================================
Net investment income 2,417,395
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 2,567,293
------------------------------------------------------------
Foreign currencies (108,508)
------------------------------------------------------------
Option contracts written 226,433
============================================================
2,685,218
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (62,661,666)
------------------------------------------------------------
Foreign currencies (13,383)
============================================================
(62,675,049)
============================================================
Net gain (loss) from investment securities,
foreign currencies and option contracts (59,989,831)
============================================================
Net increase (decrease) in net assets
resulting from operations $(57,572,436)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-138
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the year ended December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income $ 2,417,395 $ 4,203,120
------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 2,685,218 45,142,732
------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, and foreign currencies (62,675,049) (68,125,918)
==========================================================================================
Net increase (decrease) in net assets resulting from
operations (57,572,436) (18,780,066)
==========================================================================================
Distributions to shareholders from net investment income:
Class A (1,681,740) (2,905,816)
------------------------------------------------------------------------------------------
Class B (460,493) (587,054)
------------------------------------------------------------------------------------------
Class C (53,107) (56,822)
------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (28,679,886)
------------------------------------------------------------------------------------------
Class B -- (17,296,532)
------------------------------------------------------------------------------------------
Class C -- (1,858,159)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A (7,950,038) 70,873,896
------------------------------------------------------------------------------------------
Class B (3,688,590) 43,074,650
------------------------------------------------------------------------------------------
Class C 368,476 14,197,274
==========================================================================================
Net increase (decrease) in net assets (71,037,928) 57,981,485
==========================================================================================
NET ASSETS:
Beginning of period 445,746,859 387,765,374
==========================================================================================
End of period $374,708,931 $445,746,859
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $322,535,619 $333,805,771
------------------------------------------------------------------------------------------
Undistributed net investment income 241,486 126,568
------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 5,810,536 3,125,318
------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 46,121,290 108,689,202
==========================================================================================
$374,708,931 $445,746,859
__________________________________________________________________________________________
==========================================================================================
|
See Notes to Financial Statements.
FS-139
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve a high total return.
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. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
C. Distributions -- Distributions from income are declared and paid quarterly and are recorded on ex-dividend date. Distributions from net realized capital gains, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
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
FS-140
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. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-CHANGE IN ACCOUNTING PRINCIPLE
As required, effective January 1, 2001, the Fund adopted the provisions of the
AICPA Audit and Accounting Guide for Investment Companies and began amortizing
premium on debt securities. Prior to January 1, 2001, the Fund did not amortize
premiums on debt securities. The cumulative effect of this accounting change had
no impact on total net assets of the Fund, but resulted in a $107,137 reduction
in the cost of securities and a corresponding $107,137 increase in net
unrealized gains and losses, based on securities held by the Fund on January 1,
2001.
The effect of this change in 2001 was to decrease net investment income by
$7,514, increase net unrealized gains and losses by $6,178 and increase net
realized gains and losses by $1,336. As a result, the net investment income per
share, the net realized and unrealized gains and losses per share and the ratio
of net investment income to average net assets remained unchanged.
NOTE 3-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at an annual rate of 0.60% on the first
$200 million of the Fund's average daily net assets, plus 0.50% on the next $300
million of the Fund's average daily net assets, plus 0.40% on the next $500
million of the Fund's average daily net assets, plus 0.30% on the Fund's average
daily net assets in excess of $1 billion.
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 June 30, 2001, AIM was
paid $50,861 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 June 30, 2001, AFS
was paid $196,098 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $305,205,
$738,566 and $84,140, respectively, as compensation under the Plans.
AIM Distributors received commissions of $50,233 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $8,023 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of
AIM, AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of
$1,500 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Board of Trustees. A member of that firm is a trustee of the Trust.
FS-141
NOTE 4-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $3,762 and reductions in custodian fees of $400 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $4,162.
NOTE 5-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 6-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 June 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 7-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 June 30, 2001, securities with an aggregate value of $43,252,862 were on
loan to brokers. The loans were secured by cash collateral of $43,681,038
received by the Fund and subsequently invested in affiliated money market funds
as follows: $21,840,519 in STIC Liquid Assets Portfolio and $21,840,519 in STIC
Prime Portfolio. For the six months ended June 30, 2001, the Fund received fees
of $14,334 for securities lending.
NOTE 8-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2001 was
$32,509,087 and $50,461,651, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 78,797,157 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (32,730,602) ========================================================= Net unrealized appreciation of investment securities $ 46,066,555 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $326,084,305. |
NOTE 9-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of period -- $ --
---------------------------------------------------------
Written 336 226,433
---------------------------------------------------------
Expired (336) (226,433)
=========================================================
End of period -- $ --
_________________________________________________________
=========================================================
|
FS-142
NOTE 10-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the year ended December 31, 2000 were as follows:
JUNE 30, 2001 DECEMBER 31, 2000
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 1,061,876 $ 22,570,036 3,794,538 $106,076,315
----------------------------------------------------------------------------------------------------------------------
Class B 591,164 12,461,287 1,986,260 53,880,447
----------------------------------------------------------------------------------------------------------------------
Class C 149,383 3,159,214 558,391 15,179,433
======================================================================================================================
Issued as reinvestment of dividends:
Class A 77,264 1,528,964 1,299,861 29,276,481
----------------------------------------------------------------------------------------------------------------------
Class B 20,081 394,838 717,979 15,980,083
----------------------------------------------------------------------------------------------------------------------
Class C 2,421 47,753 81,046 1,800,992
======================================================================================================================
Reacquired:
Class A (1,518,580) (32,049,038) (2,334,702) (64,478,900)
----------------------------------------------------------------------------------------------------------------------
Class B (791,868) (16,544,715) (998,532) (26,785,880)
----------------------------------------------------------------------------------------------------------------------
Class C (137,069) (2,838,491) (104,539) (2,783,151)
======================================================================================================================
(545,328) $(11,270,152) 5,000,302 $128,145,820
______________________________________________________________________________________________________________________
======================================================================================================================
|
NOTE 11-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 DECEMBER 31,
JUNE 30, --------------------------------------------------------
2001 2000(a) 1999(a) 1998 1997 1996
---------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 22.45 $ 26.08 $ 21.01 $ 19.26 $ 16.01 $ 14.59
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.15(b) 0.33 0.38 0.48 0.47 0.55
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (3.05) (1.00) 6.60 2.53 3.26 1.43
=================================================================================================================================
Total from investment operations (2.90) (0.67) 6.98 3.01 3.73 1.98
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.15) (0.28) (0.35) (0.46) (0.47) (0.56)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (2.68) (1.56) (0.80) (0.01) --
=================================================================================================================================
Total distributions (0.15) (2.96) (1.91) (1.26) (0.48) (0.56)
=================================================================================================================================
Net asset value, end of period $ 19.40 $ 22.45 $ 26.08 $ 21.01 $ 19.26 $ 16.01
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (12.95)% (2.54)% 34.15% 16.01% 23.70% 13.88%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $223,568 $267,200 $238,432 $196,665 $179,456 $164,001
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.03%(d) 1.03% 1.10% 1.06% 1.13% 1.17%
=================================================================================================================================
Ratio of net investment income to average net
assets 1.44%(b)(d) 1.23% 1.69% 2.39% 2.79% 3.62%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 8% 52% 37% 38% 26% 48%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) As required, effective January 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. Had the Fund not amortized premiums
on debt securities, the net investment income per share would have been
$0.15 and the ratio of net investment income to average net assets would
have been 1.44%. Per share and ratios for periods prior to January 1, 2001
have not been restated to reflect this change in presentation.
(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
$246,187,277.
FS-143
NOTE 11-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
--------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ------------------------------------------------------
2001 2000(a) 1999(a) 1998 1997 1996
---------------- -------- -------- -------- ------- -------
Net asset value, beginning of period $ 22.38 $ 26.03 $ 20.98 $ 19.24 $ 16.01 $ 14.60
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07(b) 0.13 0.21 0.33 0.34 0.42
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (3.03) (1.01) 6.59 2.53 3.25 1.44
=================================================================================================================================
Total from investment operations (2.96) (0.88) 6.80 2.86 3.59 1.86
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.07) (0.09) (0.19) (0.32) (0.35) (0.45)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (2.68) (1.56) (0.80) (0.01) --
=================================================================================================================================
Total distributions (0.07) (2.77) (1.75) (1.12) (0.36) (0.45)
=================================================================================================================================
Net asset value, end of period $ 19.35 $ 22.38 $ 26.03 $ 20.98 $ 19.24 $ 16.01
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (13.25)% (3.28)% 33.16% 15.14% 22.74% 12.98%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $135,531 $160,820 $142,632 $111,866 $94,227 $79,530
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.79%(d) 1.80% 1.84% 1.81% 1.91% 1.96%
=================================================================================================================================
Ratio of net investment income to average net assets 0.68%(b)(d) 0.46% 0.95% 1.64% 2.01% 2.83%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 8% 52% 37% 38% 26% 48%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) As required, effective January 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. Had the Fund not amortized premiums
on debt securities, the net investment income per share would have been
$0.07 and the ratio of net investment income to average net assets would
have been 0.68%. Per share and ratios for periods prior to January 1, 2001
have not been restated to reflect this change in presentation.
(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
$148,937,342.
CLASS C
------------------------------------------------------------------
AUGUST 4, 1997
(DATE SALES
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, COMMENCED) TO
JUNE 30, ---------------------------- DECEMBER 31,
2001 2000(a) 1999(a) 1998 1997
---------------- ------- ------- ------ --------------
Net asset value, beginning of period $ 22.37 $ 26.02 $20.97 $19.24 $17.67
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07(b) 0.13 0.21 0.33 0.13
--------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (3.03) (1.01) 6.59 2.52 1.58
================================================================================================================================
Total from investment operations (2.96) (0.88) 6.80 2.85 1.71
================================================================================================================================
Less distributions:
Dividends from net investment income (0.07) (0.09) (0.19) (0.32) (0.13)
--------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (2.68) (1.56) (0.80) (0.01)
================================================================================================================================
Total distributions (0.07) (2.77) (1.75) (1.12) (0.14)
================================================================================================================================
Net asset value, end of period $ 19.34 $ 22.37 $26.02 $20.97 $19.24
________________________________________________________________________________________________________________________________
================================================================================================================================
Total return(c) (13.26)% (3.28)% 33.18% 15.09% 9.74%
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $15,610 $17,727 $6,702 $2,994 $1,183
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratio of expenses to average net assets 1.79%(d) 1.80% 1.84% 1.81% 1.90%(e)
================================================================================================================================
Ratio of net investment income to average net assets 0.68%(b)(d) 0.46% 0.95% 1.64% 2.02%(e)
________________________________________________________________________________________________________________________________
================================================================================================================================
Portfolio turnover rate 8% 52% 37% 38% 26%
________________________________________________________________________________________________________________________________
================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) As required, effective January 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. Had the Fund not amortized premiums
on debt securities, the net investment income per share would have been
$0.07 and the ratio of net investment income to average net assets would
have been 0.68%. Per share and ratios for periods prior to January 1, 2001
have not been restated to reflect this change in presentation.
(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 $16,967,557.
(e) Annualized.
FS-144
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-92.11%
AUSTRALIA-3.88%
Computershare Ltd. (Data Processing Services) 42,000 $ 131,746
--------------------------------------------------------------------
CSL Ltd. (Pharmaceuticals) 5,100 124,080
--------------------------------------------------------------------
ERG Ltd. (Electronic Equipment & Instruments) 201,000 147,629
--------------------------------------------------------------------
Securenet Ltd. (Internet Software &
Services)(a) 36,700 27,517
====================================================================
430,972
====================================================================
AUSTRIA-0.58%
Gericom A.G. (Computer Hardware) 2,200 63,867
====================================================================
BELGIUM-1.91%
Omega Pharma S.A. (Health Care Supplies) 5,500 212,112
====================================================================
CANADA-18.26%
Alimentation Couche-Tard Inc.-Class B (Food
Retail)(a) 6,800 141,079
--------------------------------------------------------------------
Boralex, Inc.-Class A (Electric Utilities)(a) 17,100 106,431
--------------------------------------------------------------------
CHC Helicopter Corp.-Class A (Airlines)(a) 4,500 59,277
--------------------------------------------------------------------
Cognicase Inc. (Application Software)(a) 21,100 113,956
--------------------------------------------------------------------
FirstService Corp. (Diversified Commercial
Services)(a) 9,900 218,435
--------------------------------------------------------------------
Forzani Group Ltd. (The)-Class A (Specialty
Stores)(a) 58,000 343,806
--------------------------------------------------------------------
Heroux-Devtek Inc. (Wireless
Telecommunication Services)(a) 22,100 136,970
--------------------------------------------------------------------
Home Capital Group, Inc. (Diversified
Financial Services) 22,400 130,124
--------------------------------------------------------------------
Reitmans Ltd.-Class A (Apparel Retail) 12,600 165,975
--------------------------------------------------------------------
Richelieu Hardware Ltd. (Distributors)(a) 13,500 173,385
--------------------------------------------------------------------
Tesco Corp. (Oil & Gas Equipment &
Services)(a) 14,800 166,686
--------------------------------------------------------------------
Trican Well Service Ltd. (Oil & Gas Equipment
& Services)(a) 11,700 144,487
--------------------------------------------------------------------
Van Houtte Inc. (Packaged Foods)(a) 6,300 125,519
====================================================================
2,026,130
====================================================================
CHINA-4.23%
AsiaInfo Holdings, Inc. (Internet Software &
Services)(a) 14,300 282,425
--------------------------------------------------------------------
Travelsky Technology Ltd. (Diversified
Commercial Services)(a) 185,000 187,377
====================================================================
469,802
====================================================================
DENMARK-1.46%
Vestas Wind Systems A.S. (Heavy Electrical
Equipment) 3,480 162,435
====================================================================
FINLAND-3.08%
Oyj Hartwall Abp (Brewers)(a) 8,100 130,240
--------------------------------------------------------------------
|
MARKET
SHARES VALUE
FINLAND-(CONTINUED)
Vacon Oyj (Electrical Components & Equipment) 24,700 $ 211,451
====================================================================
341,691
====================================================================
FRANCE-11.07%
Altedia (Employment Services) 3,600 109,544
--------------------------------------------------------------------
April Group (Insurance Brokers) 6,000 106,798
--------------------------------------------------------------------
Arkopharma (Packaged Foods) 800 96,559
--------------------------------------------------------------------
Beneteau (Leisure Products) 1,000 93,236
--------------------------------------------------------------------
Brime Technologies (Diversified Commercial
Services)(a) 3,600 145,092
--------------------------------------------------------------------
Marionnaud Parfumeries (Specialty Stores)(a) 1,500 132,734
--------------------------------------------------------------------
Marionnaud Parfumeries-Rts., expires 06/30/02
(Specialty Stores)(b) 1,500 1,221
--------------------------------------------------------------------
MEDIDEP S.A. (Health Care Distributors &
Services)(a) 2,190 222,749
--------------------------------------------------------------------
Seche Environnement (Environmental Services) 1,450 114,913
--------------------------------------------------------------------
Silicon-On-Insulator Technologies (SOITEC)
(Electronic Equipment & Instruments)(a) 9,055 148,435
--------------------------------------------------------------------
UBI Soft Entertainment S.A. (Application
Software)(a) 1,700 57,795
====================================================================
1,229,076
====================================================================
GERMANY-5.22%
ELMOS Semiconductor A.G. (Electronic
Equipment & Instruments)(a) 3,100 56,492
--------------------------------------------------------------------
FJA A.G. (Electronic Equipment & Instruments) 1,800 105,119
--------------------------------------------------------------------
Hugo Boss A.G.-Pfd (Apparel & Accessories) 570 159,434
--------------------------------------------------------------------
Suess MicroTec A.G. (Semiconductor
Equipment)(a) 3,900 114,045
--------------------------------------------------------------------
Wedeco A.G. Water Technology (Water
Utilities)(a) 4,300 143,783
====================================================================
578,873
====================================================================
GREECE-1.07%
Folli-Follie (Apparel & Accessories) 6,300 118,225
====================================================================
HONG KONG-8.69%
Asia Satellite Telecommunications Holdings
Ltd. (Broadcasting & Cable TV) 42,000 72,694
--------------------------------------------------------------------
Computer & Technologies Holdings Ltd. (IT
Consulting & Services) 226,000 91,996
--------------------------------------------------------------------
Convenience Retail Asia Ltd. (Food Retail)(a) 756,000 259,276
--------------------------------------------------------------------
Denway Motors Ltd. (Automobile
Manufacturers)(a) 754,400 270,817
--------------------------------------------------------------------
i-CABLE Communications Ltd. (Broadcasting &
Cable TV)(a) 278,000 155,042
--------------------------------------------------------------------
Texwinca Holdings Ltd. (Textiles) 298,000 114,618
====================================================================
964,443
====================================================================
INDIA-3.18%
Dr. Reddy's Laboratories Ltd.-ADR
(Pharmaceuticals)(a) 13,500 250,425
--------------------------------------------------------------------
|
FS-145
MARKET
SHARES VALUE
INDIA-(CONTINUED)
Satyam Computer Services Ltd.-ADR (IT
Consulting & Services) 11,700 $ 102,141
====================================================================
352,566
====================================================================
IRELAND-2.56%
Anglo Irish Bank Corp. PLC (Banks)(a) 42,300 160,982
--------------------------------------------------------------------
IFG Group PLC (Diversified Financial
Services) 47,500 122,796
====================================================================
283,778
====================================================================
ISRAEL-2.19%
Ectel Ltd. (Telecommunications Equipment)(a) 10,200 147,900
--------------------------------------------------------------------
ESC Medical Systems Ltd. (Health Care
Equipment)(a) 3,300 95,205
====================================================================
243,105
====================================================================
JAPAN-2.45%
Bellsystem24, Inc. (Diversified Commercial
Services) 300 99,342
--------------------------------------------------------------------
Fast Retailing Co. Ltd. (Apparel Retail) 400 69,596
--------------------------------------------------------------------
Yahoo Japan Corp. (Internet Software &
Services)(a) 3 102,951
====================================================================
271,889
====================================================================
NETHERLANDS-0.72%
Van der Moolen Holding N.V. (Diversified
Financial Services) 3,070 80,406
====================================================================
SINGAPORE-1.25%
Datacraft Asia Ltd. (Networking Equipment) 34,000 138,720
====================================================================
SPAIN-0.92%
Grupo Auxiliar Metalurgico, S.A. (Gamesa)
(Aerospace & Defense)(a) 4,800 102,119
====================================================================
SWEDEN-6.22%
Biacore International A.B. (Health Care
Equipment)(a) 3,760 140,079
--------------------------------------------------------------------
D. Carnegie & Co. A.B. (Diversified Financial
Services)(a) 15,800 180,949
--------------------------------------------------------------------
|
MARKET
SHARES VALUE
SWEDEN-(CONTINUED)
Elekta A.B.-Class B (Health Care
Equipment)(a) 13,500 $ 93,138
--------------------------------------------------------------------
Nobel Biocare A.B. (Health Care Supplies) 3,500 118,158
--------------------------------------------------------------------
Q-Med A.B. (Health Care Equipment)(a) 10,000 157,759
====================================================================
690,083
====================================================================
SWITZERLAND-0.94%
Tecan A.G. (Health Care Equipment) 1,260 104,480
====================================================================
UNITED KINGDOM-12.23%
Chemring Group PLC (Aerospace & Defense) 21,900 103,320
--------------------------------------------------------------------
Electronics Boutique PLC (Computer &
Electronics Retail) 108,300 162,814
--------------------------------------------------------------------
Geest PLC (Agricultural Products) 12,100 116,301
--------------------------------------------------------------------
iSoft Group PLC (Application Software) 62,300 217,588
--------------------------------------------------------------------
John David Sports PLC (Apparel Retail) 32,100 153,250
--------------------------------------------------------------------
Man Group PLC (Diversified Financial
Services) 13,800 186,086
--------------------------------------------------------------------
RPS Group PLC (Environmental Services) 44,800 105,994
--------------------------------------------------------------------
Torex PLC (Consumer Finance) 16,000 144,210
--------------------------------------------------------------------
Victrex PLC (Diversified Chemicals) 11,600 63,997
--------------------------------------------------------------------
WSP Group PLC (Construction & Engineering) 16,300 103,987
====================================================================
1,357,547
====================================================================
Total Foreign Stocks & Other Equity
Interests (Cost $9,845,992) 10,222,319
====================================================================
MONEY MARKET FUNDS-5.83%
STIC Liquid Assets Portfolio(c) 323,521 323,521
--------------------------------------------------------------------
STIC Prime Portfolio(c) 323,521 323,521
====================================================================
Total Money Market Funds (Cost $647,042) 647,042
====================================================================
TOTAL INVESTMENTS-97.94% (Cost $10,493,034) 10,869,361
====================================================================
OTHER ASSETS LESS LIABILITIES-2.06% 228,300
====================================================================
NET ASSETS-100.00% $11,097,661
____________________________________________________________________
====================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt Pfd. - Preferred Rts. - Rights |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Acquired as part of a unit with or in exchange for other securities.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-146
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$10,493,034) $10,869,361
------------------------------------------------------------
Foreign currencies, at value (cost $192,713) 191,776
------------------------------------------------------------
Receivables for:
Investments sold 145,900
------------------------------------------------------------
Fund shares sold 3,762
------------------------------------------------------------
Dividends 10,230
------------------------------------------------------------
Investment for deferred compensation plan 4,639
------------------------------------------------------------
Due from advisor 1,212
------------------------------------------------------------
Other assets 37,730
============================================================
Total assets 11,264,610
============================================================
LIABILITIES:
Payables for:
Investments purchased 113,329
------------------------------------------------------------
Fund shares reacquired 724
------------------------------------------------------------
Deferred compensation plan 4,639
------------------------------------------------------------
Accrued distribution fees 10,180
------------------------------------------------------------
Accrued transfer agent fees 4,629
------------------------------------------------------------
Accrued operating expenses 33,448
============================================================
Total liabilities 166,949
============================================================
Net assets applicable to shares outstanding $11,097,661
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 6,459,398
____________________________________________________________
============================================================
Class B $ 1,980,173
____________________________________________________________
============================================================
Class C $ 2,658,090
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 928,204
____________________________________________________________
============================================================
Class B 285,886
____________________________________________________________
============================================================
Class C 383,873
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 6.96
------------------------------------------------------------
Offering price per share:
(Net asset value of $6.96 divided by
94.50%) $ 7.37
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 6.93
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 6.92
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$5,627) $ 41,825
------------------------------------------------------------
Dividends from affiliated money market funds 15,065
------------------------------------------------------------
Interest 115
============================================================
Total investment income 57,005
============================================================
EXPENSES:
Advisory fees 50,735
------------------------------------------------------------
Administrative services fees 24,795
------------------------------------------------------------
Custodian fees 42,535
------------------------------------------------------------
Distribution fees -- Class A 10,465
------------------------------------------------------------
Distribution fees -- Class B 9,869
------------------------------------------------------------
Distribution fees -- Class C 13,624
------------------------------------------------------------
Interest 1,622
------------------------------------------------------------
Transfer agent fees -- Class A 10,287
------------------------------------------------------------
Transfer agent fees -- Class B 3,988
------------------------------------------------------------
Transfer agent fees -- Class C 5,506
------------------------------------------------------------
Trustees' fees 4,834
------------------------------------------------------------
Registration and filing fees 50,799
------------------------------------------------------------
Professional Fees 25,122
------------------------------------------------------------
Other 9,043
============================================================
Total expenses 263,224
============================================================
Less: Fees waived and expenses reimbursed (138,092)
------------------------------------------------------------
Expenses paid indirectly (105)
============================================================
Net expenses 125,027
============================================================
Net investment income (loss) (68,022)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities (2,548,756)
------------------------------------------------------------
Foreign currencies 7,842
============================================================
(2,540,914)
============================================================
Change in net unrealized appreciation of:
Investment securities 1,133,580
------------------------------------------------------------
Foreign currencies 1,648
============================================================
1,135,228
============================================================
Net gain (loss) from investment securities
and foreign currencies (1,405,686)
============================================================
Net increase (decrease) in net assets
resulting from operations $(1,473,708)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-147
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the period August 31, 2000 (date
operations commenced) through December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
----------- ------------
OPERATIONS:
Net investment income (loss) $ (68,022) $ (29,949)
-----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies (2,540,914) (500,456)
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies 1,135,228 (759,305)
=========================================================================================
Net increase (decrease) in net assets resulting from
operations (1,473,708) (1,289,710)
=========================================================================================
Share transactions-net:
Class A 1,691,803 6,385,964
-----------------------------------------------------------------------------------------
Class B 277,063 2,274,262
-----------------------------------------------------------------------------------------
Class C 336,105 2,895,882
=========================================================================================
Net increase in net assets 831,263 10,266,398
=========================================================================================
NET ASSETS:
Beginning of period 10,266,398 --
=========================================================================================
End of period $11,097,661 $10,266,398
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $13,855,763 $11,550,792
-----------------------------------------------------------------------------------------
Undistributed net investment income (loss) (76,574) (8,552)
-----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (3,057,451) (516,537)
-----------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities and foreign currencies 375,923 (759,305)
=========================================================================================
$11,097,661 $10,266,398
_________________________________________________________________________________________
=========================================================================================
|
See Notes to Financial Statements.
FS-148
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM International Emerging Growth Fund (the "Fund") is a series portfolio of AIM
Funds Group (the "Trust"). The Trust is a Delaware business trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series management investment company consisting of ten separate
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. Class A shares are sold with a front-end
sales charge. Class B shares and Class C shares are sold with a contingent
deferred sales charge. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is to achieve 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.
The Fund has a capital loss carryforward of $161,713 as of December 31,
2000 which may be carried forward to offset future taxable gains, if any,
which expires, if not previously utilized, through 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
FS-149
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 and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.95% of the Fund's
average daily net assets. For the six months ended June 30, 2001, AIM waived
fees of $50,735 and reimbursed expenses of $87,357.
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 June 30, 2001, AIM was
paid $24,795 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 June 30, 2001, AFS
was paid $10,416 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
0.35% 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 June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $10,465,
$9,869 and $13,624, respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,237 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $27,969 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,731
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $96 and reductions in custodian fees of $9 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $105.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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.
FS-150
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 June 30, 2001 was
$10,492,781 and $7,833,269, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $1,337,202 -------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (960,875) ========================================================================== Net unrealized appreciation of investment securities $ 376,327 __________________________________________________________________________ ========================================================================== Cost of investments is the same for tax and financial statement purposes. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the period August 31, 2000 (date operations commenced) through December 31, 2000:
JUNE 30, 2001 DECEMBER 31, 2000
----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- --------- -----------
Sold:
Class A 555,459 $ 4,059,716 745,389 $ 6,717,335
-----------------------------------------------------------------------------------------------------------------
Class B 77,980 589,781 271,186 2,438,175
-----------------------------------------------------------------------------------------------------------------
Class C 393,483 2,833,045 339,960 2,953,136
=================================================================================================================
Reacquired:
Class A (333,399) (2,367,913) (39,245) (331,371)
-----------------------------------------------------------------------------------------------------------------
Class B (42,789) (312,718) (20,491) (163,913)
-----------------------------------------------------------------------------------------------------------------
Class C (342,756) (2,496,940) (6,814) (57,254)
=================================================================================================================
307,978 $ 2,304,971 1,289,985 $11,556,108
_________________________________________________________________________________________________________________
=================================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001 2000(a)
---------------- ---------------------
Net asset value, beginning of period $ 7.97 $ 10.00
-------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.03) (0.03)
-------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.98) (2.00)
=======================================================================================================
Total from investment operations (1.01) (2.03)
=======================================================================================================
Net asset value, end of period $ 6.96 $ 7.97
_______________________________________________________________________________________________________
=======================================================================================================
Total return(b) (12.67)% (20.30)%
_______________________________________________________________________________________________________
=======================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 6,459 $ 5,625
_______________________________________________________________________________________________________
=======================================================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.03%(c) 2.11%(d)
-------------------------------------------------------------------------------------------------------
Without fee waivers and expense reimbursements 4.62%(c) 6.83%(d)
=======================================================================================================
Ratio of net investment income (loss) to average net assets (0.96)%(c) (1.09)%(d)
=======================================================================================================
Ratio of interest expense to average net assets 0.03%(c) 0.00%
_______________________________________________________________________________________________________
=======================================================================================================
Portfolio turnover rate 77% 30%
_______________________________________________________________________________________________________
=======================================================================================================
|
(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 $6,029,376.
(d) Annualized.
FS-151
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
-----------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001 2000(a)
---------------- ---------------------
Net asset value, beginning of period $ 7.95 $ 10.00
-------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06) (0.05)
-------------------------------------------------------------------------------------------------------
Net losses on securities (both realized and unrealized) (0.96) (2.00)
=======================================================================================================
Total from investment operations (1.02) (2.05)
=======================================================================================================
Net asset value, end of period $ 6.93 $ 7.95
_______________________________________________________________________________________________________
=======================================================================================================
Total return(b) (12.83)% (20.50)%
_______________________________________________________________________________________________________
=======================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 1,980 $ 1,992
_______________________________________________________________________________________________________
=======================================================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.74%(c) 2.81%(d)
-------------------------------------------------------------------------------------------------------
Without fee waivers and expense reimbursements 5.33%(c) 7.53%(d)
=======================================================================================================
Ratio of net investment income (loss) to average net assets (1.67)%(c) (1.79)%(d)
=======================================================================================================
Ratio of interest expense to average net assets 0.03%(c) 0.00%
_______________________________________________________________________________________________________
=======================================================================================================
Portfolio turnover rate 77% 30%
_______________________________________________________________________________________________________
=======================================================================================================
|
(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 $1,990,180.
(d) Annualized.
CLASS C
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 7.95 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06) (0.05)
--------------------------------------------------------------------------------------------------
Net losses on securities (both realized and unrealized) (0.97) (2.00)
==================================================================================================
Total from investment operations (1.03) (2.05)
==================================================================================================
Net asset value, end of period $ 6.92 $ 7.95
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (12.96)% (20.50)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 2,658 $ 2,649
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.74%(c) 2.81%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers and expense reimbursements 5.33%(c) 7.53%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.67)%(c) (1.79)%(d)
==================================================================================================
Ratio of interest expense to average net assets 0.03%(c) 0.00%
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 77% 30%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $2,747,296.
(d) Annualized.
FS-152
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY INTERESTS-93.03%
AEROSPACE & DEFENSE-3.93%
Alliant Techsystems Inc.(a) 7,600 $ 683,240
----------------------------------------------------------------------
L-3 Communications Holdings, Inc.(a) 9,600 732,480
----------------------------------------------------------------------
Mercury Computer Systems, Inc.(a) 39,100 1,724,310
======================================================================
3,140,030
======================================================================
APPLICATION SOFTWARE-15.67%
Amdocs Ltd. (United Kingdom)(a) 24,950 1,343,558
----------------------------------------------------------------------
BEA Systems, Inc.(a) 22,000 675,620
----------------------------------------------------------------------
Cadence Design Systems, Inc.(a) 44,700 832,761
----------------------------------------------------------------------
Henry (Jack) & Associates, Inc. 30,000 930,000
----------------------------------------------------------------------
Lightbridge, Inc.(a) 32,300 626,620
----------------------------------------------------------------------
Mentor Graphics Corp.(a) 32,700 572,250
----------------------------------------------------------------------
Mercury Interactive Corp.(a) 13,000 778,700
----------------------------------------------------------------------
NVIDIA Corp.(a) 17,500 1,623,125
----------------------------------------------------------------------
Parametric Technology Corp.(a) 64,600 903,754
----------------------------------------------------------------------
PeopleSoft, Inc.(a) 40,100 1,974,123
----------------------------------------------------------------------
SERENA Software, Inc.(a) 6,800 247,112
----------------------------------------------------------------------
Siebel Systems, Inc.(a) 16,500 773,850
----------------------------------------------------------------------
Synopsys, Inc.(a) 25,700 1,243,623
======================================================================
12,525,096
======================================================================
BIOTECHNOLOGY-8.85%
Cephalon, Inc.(a) 10,500 740,250
----------------------------------------------------------------------
COR Therapeutics, Inc.(a) 39,100 1,192,550
----------------------------------------------------------------------
Genzyme Corp.(a) 8,400 512,400
----------------------------------------------------------------------
Gilead Sciences, Inc.(a) 23,000 1,338,370
----------------------------------------------------------------------
IDEC Pharmaceuticals Corp.(a) 33,700 2,281,153
----------------------------------------------------------------------
Invitrogen Corp.(a) 10,900 782,620
----------------------------------------------------------------------
MedImmune, Inc.(a) 4,700 221,840
======================================================================
7,069,183
======================================================================
COMPUTER HARDWARE-0.97%
Apple Computer, Inc.(a) 12,500 290,625
----------------------------------------------------------------------
Dell Computer Corp.(a) 18,700 485,265
======================================================================
775,890
======================================================================
COMPUTER STORAGE & PERIPHERALS-1.74%
Electronics for Imaging, Inc.(a) 24,700 728,650
----------------------------------------------------------------------
EMC Corp.(a) 22,800 662,340
======================================================================
1,390,990
======================================================================
DATA PROCESSING SERVICES-2.74%
Concord EFS, Inc.(a) 14,000 728,140
----------------------------------------------------------------------
CSG Systems International, Inc.(a) 12,200 692,472
----------------------------------------------------------------------
|
MARKET
SHARES VALUE
DATA PROCESSING SERVICES-(CONTINUED)
Fiserv, Inc.(a) 12,000 $ 767,760
======================================================================
2,188,372
======================================================================
DIVERSIFIED FINANCIAL SERVICES-0.49%
Instinet Group Inc.(a) 20,900 389,576
======================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-2.20%
Celestica Inc. (Canada)(a) 18,000 927,000
----------------------------------------------------------------------
SCI Systems, Inc.(a) 32,500 828,750
======================================================================
1,755,750
======================================================================
HEALTH CARE DISTRIBUTORS & SERVICES-1.66%
Accredo Health, Inc.(a) 22,100 821,899
----------------------------------------------------------------------
Unilab Corp.(a) 20,100 506,520
======================================================================
1,328,419
======================================================================
HEALTH CARE EQUIPMENT-4.52%
Biosite Diagnostics Inc.(a) 13,300 595,840
----------------------------------------------------------------------
CLOSURE Medical Corp.(a) 32,000 735,040
----------------------------------------------------------------------
Cytyc Corp.(a) 44,200 1,018,810
----------------------------------------------------------------------
Integra LifeSciences Holdings(a) 23,700 513,105
----------------------------------------------------------------------
Intuitive Surgical, Inc.(a) 25,000 337,750
----------------------------------------------------------------------
Respironics, Inc.(a) 13,700 407,712
======================================================================
3,608,257
======================================================================
HEALTH CARE SUPPLIES-1.09%
ICU Medical, Inc.(a) 10,800 445,824
----------------------------------------------------------------------
Regeneration Technologies, Inc.(a) 48,200 424,160
======================================================================
869,984
======================================================================
INTEGRATED TELECOMMUNICATION SERVICES-1.67%
Illuminet Holdings, Inc.(a) 32,300 1,015,835
----------------------------------------------------------------------
Qwest Communications International Inc. 10,000 318,700
======================================================================
1,334,535
======================================================================
INTERNET RETAIL-1.63%
eBay Inc.(a) 19,000 1,301,310
======================================================================
INTERNET SOFTWARE & SERVICES-8.38%
Check Point Software Technologies Ltd.
(Israel)(a) 16,500 834,405
----------------------------------------------------------------------
HomeStore.com, Inc.(a) 14,000 489,440
----------------------------------------------------------------------
Hotel Reservations Network, Inc.-Class A(a) 4,800 223,344
----------------------------------------------------------------------
SonicWALL, Inc.(a) 62,300 1,570,583
----------------------------------------------------------------------
Travelocity.com Inc.(a) 39,700 1,218,790
----------------------------------------------------------------------
VeriSign, Inc.(a) 19,400 1,164,194
----------------------------------------------------------------------
Websense, Inc.(a) 64,800 1,198,800
======================================================================
6,699,556
======================================================================
|
FS-153
MARKET
SHARES VALUE
IT CONSULTING & SERVICES-0.95%
Affiliated Computer Services, Inc.-Class A(a) 10,500 $ 755,055
======================================================================
MOVIES & ENTERTAINMENT-1.68%
Macrovision Corp.(a) 19,600 1,342,600
======================================================================
NETWORKING EQUIPMENT-1.33%
Brocade Communications Systems, Inc.(a) 8,000 351,920
----------------------------------------------------------------------
Emulex Corp.(a) 12,000 484,800
----------------------------------------------------------------------
ONI Systems Corp.(a) 8,200 228,780
======================================================================
1,065,500
======================================================================
PHARMACEUTICALS-1.67%
Biovail Corp. (Canada)(a) 13,600 591,600
----------------------------------------------------------------------
CIMA Labs Inc.(a) 9,500 745,750
======================================================================
1,337,350
======================================================================
SEMICONDUCTOR EQUIPMENT-2.17%
Brooks Automation, Inc.(a) 6,200 285,820
----------------------------------------------------------------------
KLA-Tencor Corp.(a) 12,000 701,640
----------------------------------------------------------------------
Novellus Systems, Inc.(a) 13,200 749,628
======================================================================
1,737,088
======================================================================
SEMICONDUCTORS-16.47%
Advanced Micro Devices, Inc.(a) 43,500 1,256,280
----------------------------------------------------------------------
Analog Devices, Inc.(a) 36,000 1,557,000
----------------------------------------------------------------------
Applied Micro Circuits Corp.(a) 41,000 705,200
----------------------------------------------------------------------
Cirrus Logic, Inc.(a) 36,000 829,080
----------------------------------------------------------------------
Intersil Corp.-Class A(a) 31,300 1,139,320
----------------------------------------------------------------------
Linear Technology Corp. 18,000 795,960
----------------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 15,000 663,150
----------------------------------------------------------------------
Microsemi Corp.(a) 12,900 915,900
----------------------------------------------------------------------
Oak Technology, Inc.(a) 51,800 548,562
----------------------------------------------------------------------
Pixelworks, Inc.(a) 77,300 2,762,702
----------------------------------------------------------------------
QLogic Corp.(a) 12,000 $ 773,400
----------------------------------------------------------------------
|
MARKET
SHARES VALUE
SEMICONDUCTORS-(CONTINUED)
RF Micro Devices, Inc.(a) 45,400 1,216,720
======================================================================
13,163,274
======================================================================
SYSTEMS SOFTWARE-4.46%
BMC Software, Inc.(a) 45,400 1,023,316
----------------------------------------------------------------------
Micromuse Inc.(a) 13,000 363,870
----------------------------------------------------------------------
Network Associates, Inc.(a) 14,700 183,015
----------------------------------------------------------------------
VERITAS Software Corp.(a) 30,000 1,995,900
======================================================================
3,566,101
======================================================================
TELECOMMUNICATIONS EQUIPMENT-4.96%
CIENA Corp.(a) 8,100 307,800
----------------------------------------------------------------------
Comverse Technology, Inc.(a) 11,000 633,820
----------------------------------------------------------------------
Digital Lightwave, Inc.(a) 22,000 813,120
----------------------------------------------------------------------
Sonus Networks, Inc.(a) 45,500 1,062,880
----------------------------------------------------------------------
UTStarcom, Inc.(a) 46,000 1,145,400
======================================================================
3,963,020
======================================================================
WIRELESS TELECOMMUNICATION SERVICES-3.80%
Metro One Telecommunications, Inc.(a) 46,800 3,035,916
======================================================================
Total Common Stocks & Other Equity
Interests (Cost $67,850,616) 74,342,852
======================================================================
MONEY MARKET FUNDS-7.27%
STIC Liquid Assets Portfolio(b) 2,904,461 2,904,461
----------------------------------------------------------------------
STIC Prime Portfolio(b) 2,904,461 2,904,461
======================================================================
Total Money Market Funds (Cost
$5,808,922) 5,808,922
======================================================================
TOTAL INVESTMENTS-100.30% (Cost $73,659,538) 80,151,774
======================================================================
OTHER ASSETS LESS LIABILITIES-(0.30%) (239,677)
======================================================================
NET ASSETS-100.00% $79,912,097
______________________________________________________________________
======================================================================
|
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-154
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost $73,659,538) $80,151,774
------------------------------------------------------------
Receivables for:
Fund shares sold 192,723
------------------------------------------------------------
Dividends 22,930
------------------------------------------------------------
Investment for deferred compensation plan 4,701
------------------------------------------------------------
Other assets 58,595
============================================================
Total assets 80,430,723
============================================================
LIABILITIES:
Payables for:
Investments purchased 291,179
------------------------------------------------------------
Fund shares reacquired 132,172
------------------------------------------------------------
Deferred compensation plan 4,701
------------------------------------------------------------
Accrued distribution fees 66,232
------------------------------------------------------------
Accrued transfer agent fees 7,498
------------------------------------------------------------
Accrued operating expenses 16,844
============================================================
Total liabilities 518,626
============================================================
Net assets applicable to shares outstanding $79,912,097
____________________________________________________________
============================================================
NET ASSETS:
Class A $44,797,576
____________________________________________________________
============================================================
Class B $23,516,600
____________________________________________________________
============================================================
Class C $11,597,921
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 9,821,443
____________________________________________________________
============================================================
Class B 5,184,148
____________________________________________________________
============================================================
Class C 2,556,218
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 4.56
------------------------------------------------------------
Offering price per share:
(Net asset value of $4.56 divided by 94.50%) $ 4.83
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 4.54
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 4.54
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends from affiliated money market funds $ 152,733
------------------------------------------------------------
Dividends 3,666
============================================================
Total investment income 156,399
============================================================
EXPENSES:
Advisory fees 332,691
------------------------------------------------------------
Administrative services fees 24,795
------------------------------------------------------------
Custodian fees 13,633
------------------------------------------------------------
Distribution fees -- Class A 65,218
------------------------------------------------------------
Distribution fees -- Class B 99,331
------------------------------------------------------------
Distribution fees -- Class C 47,119
------------------------------------------------------------
Transfer agent fees -- Class A 83,326
------------------------------------------------------------
Transfer agent fees -- Class B 44,719
------------------------------------------------------------
Transfer agent fees -- Class C 21,213
------------------------------------------------------------
Trustees' fees 5,093
------------------------------------------------------------
Registration and filing fees 65,942
------------------------------------------------------------
Other 33,643
============================================================
Total expenses 836,723
============================================================
Less: Fees waived (167,876)
------------------------------------------------------------
Expenses paid indirectly (2,651)
============================================================
Net expenses 666,196
============================================================
Net investment income (loss) (509,797)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (42,723,346)
------------------------------------------------------------
Option contracts written 53,666
============================================================
(42,669,680)
============================================================
Change in net unrealized appreciation of
investment securities 16,943,088
============================================================
Net gain (loss) from investment securities and
option contracts (25,726,592)
============================================================
Net increase (decrease) in net assets
resulting from operations $(26,236,389)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-155
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the year ended December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income (loss) $ (509,797) $ (160,198)
------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
option contracts (42,669,680) (11,533,886)
------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities 16,943,088 (10,450,852)
==========================================================================================
Net increase (decrease) in net assets resulting from
operations (26,236,389) (22,144,936)
==========================================================================================
Share transactions-net:
Class A 16,083,176 56,708,694
------------------------------------------------------------------------------------------
Class B 9,825,850 27,020,002
------------------------------------------------------------------------------------------
Class C 4,863,083 13,792,617
==========================================================================================
Net increase in net assets 4,535,720 75,376,377
==========================================================================================
NET ASSETS:
Beginning of period 75,376,377 --
==========================================================================================
End of period $ 79,912,097 $ 75,376,377
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $128,162,580 $ 97,390,471
------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (539,153) (29,356)
------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and option contracts (54,203,566) (11,533,886)
------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities 6,492,236 (10,450,852)
==========================================================================================
$ 79,912,097 $ 75,376,377
__________________________________________________________________________________________
==========================================================================================
|
See Notes to Financial Statements.
FS-156
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM New Technology Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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.
The Fund has a capital loss carryforward of $1,713,194 as of December 31,
2000 which may be carried forward to offset future taxable gains, if any,
which expires, if not previously utilized, through the year 2008.
E. 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
FS-157
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.
F. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 1.00% of the Fund's
average daily net assets. For the six months ended June 30, 2001, AIM waived
fees of $167,876.
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 June 30, 2001, AIM was
paid $24,795 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 June 30, 2001, AFS
was paid $101,313 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
0.35% 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 June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $65,218,
$99,331 and $47,119, respectively, as compensation under the Plans.
AIM Distributors received commissions of $54,624 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $7,342 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,362
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $571 and reductions in custodian fees of $2,080 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $2,651.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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 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 June 30, 2001 was
$108,142,479 and $74,451,178, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $11,829,820 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (5,337,584) ========================================================= Net unrealized appreciation of investment securities $ 6,492,236 _________________________________________________________ ========================================================= Cost of investments is the same for tax and financial statement purposes. |
FS-158
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of period -- $ --
------------------------------------------------------------------------------------
Written 1,015 302,367
------------------------------------------------------------------------------------
Closed (593) (162,796)
------------------------------------------------------------------------------------
Exercised (70) (21,163)
------------------------------------------------------------------------------------
Expired (352) (118,408)
====================================================================================
End of period -- $ --
____________________________________________________________________________________
====================================================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the period August 31, 2000 (date operations commenced) through December 31, 2000:
JUNE 30, 2001 DECEMBER 31, 2000
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -----------
Sold:
Class A 5,903,971 $ 27,834,626 7,406,952 $63,371,172
-----------------------------------------------------------------------------------------------------------------------
Class B 2,792,758 13,160,921 3,305,594 28,031,799
-----------------------------------------------------------------------------------------------------------------------
Class C 1,655,142 7,641,323 1,784,951 15,613,560
=======================================================================================================================
Reacquired:
Class A (2,568,164) (11,751,450) (921,316) (6,662,478)
-----------------------------------------------------------------------------------------------------------------------
Class B (775,484) (3,335,071) (138,720) (1,011,797)
-----------------------------------------------------------------------------------------------------------------------
Class C (637,183) (2,778,240) (246,692) (1,820,943)
=======================================================================================================================
6,371,040 $ 30,772,109 11,190,769 $97,521,313
_______________________________________________________________________________________________________________________
=======================================================================================================================
|
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- -----------------
Net asset value, beginning of period $ 6.74 $ 10.00
---------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.03) (0.02)
---------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.15) (3.24)
===================================================================================================
Total from investment operations (2.18) (3.26)
===================================================================================================
Net asset value, end of period $ 4.56 $ 6.74
___________________________________________________________________________________________________
===================================================================================================
Total return(b) (32.34)% (32.60)%
___________________________________________________________________________________________________
===================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $44,798 $43,732
___________________________________________________________________________________________________
===================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.72%(c) 1.72%(d)
---------------------------------------------------------------------------------------------------
Without fee waivers 2.23%(c) 2.47%(d)
===================================================================================================
Ratio of net investment income (loss) to average net assets (1.25)%(c) (0.66)%(d)
___________________________________________________________________________________________________
===================================================================================================
Portfolio turnover rate 119% 54%
___________________________________________________________________________________________________
===================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charge and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of $37,576,252.
(d) Annualized.
FS-159
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
-------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- -----------------
Net asset value, beginning of period $ 6.72 $ 10.00
---------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.04)
---------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.14) (3.24)
===================================================================================================
Total from investment operations (2.18) (3.28)
===================================================================================================
Net asset value, end of period $ 4.54 $ 6.72
___________________________________________________________________________________________________
===================================================================================================
Total return(b) (32.44)% (32.80)%
___________________________________________________________________________________________________
===================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $23,517 $21,296
___________________________________________________________________________________________________
===================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.37%(c) 2.41%(d)
---------------------------------------------------------------------------------------------------
Without fee waivers 2.88%(c) 3.16%(d)
===================================================================================================
Ratio of net investment income (loss) to average net assets (1.90)%(c) (1.36)%(d)
___________________________________________________________________________________________________
===================================================================================================
Portfolio turnover rate 119% 54%
___________________________________________________________________________________________________
===================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charge and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $20,030,756.
(d) Annualized.
CLASS C
-------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- -----------------
Net asset value, beginning of period $ 6.73 $ 10.00
---------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.04)
---------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (2.15) (3.23)
===================================================================================================
Total from investment operations (2.19) (3.27)
===================================================================================================
Net asset value, end of period $ 4.54 $ 6.73
___________________________________________________________________________________________________
===================================================================================================
Total return(b) (32.54)% (32.70)%
___________________________________________________________________________________________________
===================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $11,598 $10,349
___________________________________________________________________________________________________
===================================================================================================
Ratio of expenses to average net assets (including interest
expense):
With fee waivers 2.37%(c) 2.41%(d)
---------------------------------------------------------------------------------------------------
Without fee waivers 2.88%(c) 3.16%(d)
===================================================================================================
Ratio of net investment income (loss) to average net assets (1.90)%(c) (1.35)%(d)
___________________________________________________________________________________________________
===================================================================================================
Portfolio turnover rate 119% 54%
___________________________________________________________________________________________________
===================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charge and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $9,501,975.
(d) Annualized.
FS-160
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-95.97%
ADVERTISING-1.04%
Lamar Advertising Co.(a) 248,000 $ 10,912,000
==========================================================================
AEROSPACE & DEFENSE-0.49%
BE Aerospace, Inc.(a) 270,200 5,147,310
==========================================================================
ALUMINUM-1.55%
Alcoa Inc. 415,000 16,351,000
==========================================================================
APPAREL RETAIL-1.65%
Gap, Inc. (The) 600,000 17,400,000
==========================================================================
APPLICATION SOFTWARE-4.14%
Amdocs Ltd. (United Kingdom)(a) 267,200 14,388,720
--------------------------------------------------------------------------
National Instruments Corp.(a) 316,000 10,254,200
--------------------------------------------------------------------------
PeopleSoft, Inc.(a) 126,000 6,202,980
--------------------------------------------------------------------------
Peregrine Systems, Inc.(a) 247,600 7,180,400
--------------------------------------------------------------------------
Secure Computing Corp.(a) 356,100 5,594,331
==========================================================================
43,620,631
==========================================================================
BANKS-2.04%
Bank of America Corp. 359,100 21,556,773
==========================================================================
BIOTECHNOLOGY-1.03%
Gilead Sciences, Inc.(a) 187,000 10,881,530
==========================================================================
BROADCASTING & CABLE TV-4.35%
Charter Communications, Inc.-Class A(a) 555,000 12,959,250
--------------------------------------------------------------------------
Comcast Corp.-Class A(a) 241,000 10,459,400
--------------------------------------------------------------------------
Cox Communications, Inc.-Class A(a) 215,000 9,524,500
--------------------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 276,000 7,918,440
--------------------------------------------------------------------------
Univision Communications Inc.-Class A(a) 117,000 5,005,260
==========================================================================
45,866,850
==========================================================================
BUILDING PRODUCTS-2.78%
American Standard Cos. Inc.(a) 224,000 13,462,400
--------------------------------------------------------------------------
Masco Corp. 636,000 15,874,560
==========================================================================
29,336,960
==========================================================================
COMPUTER HARDWARE-1.29%
Compaq Computer Corp. 877,000 13,584,730
==========================================================================
COMPUTER STORAGE & PERIPHERALS-0.55%
Electronics for Imaging, Inc.(a) 196,900 5,808,550
==========================================================================
CONSUMER ELECTRONICS-1.04%
Koninklijke (Royal) Philips Electronics N.V.-
ADR (Netherlands) 416,207 11,000,351
==========================================================================
|
MARKET
SHARES VALUE
CONSUMER FINANCE-1.68%
AmeriCredit Corp.(a) 138,300 $ 7,184,685
--------------------------------------------------------------------------
Providian Financial Corp. 177,500 10,508,000
==========================================================================
17,692,685
==========================================================================
DATA PROCESSING SERVICES-4.88%
BISYS Group, Inc. (The)(a) 218,000 12,862,000
--------------------------------------------------------------------------
Ceridian Corp.(a) 994,500 19,064,565
--------------------------------------------------------------------------
First Data Corp. 163,000 10,472,750
--------------------------------------------------------------------------
Fiserv, Inc.(a) 141,275 9,038,774
==========================================================================
51,438,089
==========================================================================
DIVERSIFIED COMMERCIAL SERVICES-2.68%
Convergys Corp.(a) 122,600 3,708,650
--------------------------------------------------------------------------
Equifax Inc. 227,000 8,326,360
--------------------------------------------------------------------------
H&R Block, Inc. 251,000 16,202,050
==========================================================================
28,237,060
==========================================================================
DIVERSIFIED FINANCIAL SERVICES-8.60%
American Capital Strategies, Ltd. 199,600 5,600,776
--------------------------------------------------------------------------
Citigroup Inc. 503,500 26,604,940
--------------------------------------------------------------------------
Freddie Mac 259,860 18,190,200
--------------------------------------------------------------------------
J.P. Morgan Chase & Co. 531,000 23,682,600
--------------------------------------------------------------------------
Lehman Brothers Holdings Inc. 92,800 7,215,200
--------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 158,000 9,361,500
==========================================================================
90,655,216
==========================================================================
DRUG RETAIL-0.43%
Walgreen Co. 133,000 4,541,950
==========================================================================
ELECTRIC UTILITIES-1.78%
Duke Energy Corp. 115,000 4,486,150
--------------------------------------------------------------------------
Orion Power Holdings, Inc.(a) 259,000 6,166,790
--------------------------------------------------------------------------
PG&E Corp.(a) 722,000 8,086,400
==========================================================================
18,739,340
==========================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-1.86%
Tektronix, Inc.(a) 367,000 9,964,050
--------------------------------------------------------------------------
Varian Inc.(a) 300,000 9,690,000
==========================================================================
19,654,050
==========================================================================
ENVIRONMENTAL SERVICES-2.77%
Tetra Tech, Inc.(a) 377,400 10,265,280
--------------------------------------------------------------------------
Waste Management, Inc. 614,000 18,923,480
==========================================================================
29,188,760
==========================================================================
FOOD RETAIL-1.60%
Kroger Co. (The)(a) 675,000 16,875,000
==========================================================================
|
FS-161
MARKET
SHARES VALUE
GENERAL MERCHANDISE STORES-1.53%
Ross Stores, Inc. 166,000 $ 3,975,700
--------------------------------------------------------------------------
Target Corp. 350,000 12,110,000
==========================================================================
16,085,700
==========================================================================
HEALTH CARE DISTRIBUTORS &
SERVICES-4.21%
Express Scripts, Inc.(a) 240,000 13,207,200
--------------------------------------------------------------------------
Laboratory Corp. of America Holdings(a) 100,000 7,690,000
--------------------------------------------------------------------------
McKesson HBOC, Inc. 368,000 13,660,160
--------------------------------------------------------------------------
Quest Diagnostics Inc.(a) 132,000 9,880,200
==========================================================================
44,437,560
==========================================================================
HEALTH CARE FACILITIES-3.73%
HCA Inc. 150,000 6,778,500
--------------------------------------------------------------------------
Health Management Associates, Inc.-Class A(a) 1,040,000 21,881,600
--------------------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 241,300 10,684,764
==========================================================================
39,344,864
==========================================================================
INDUSTRIAL CONGLOMERATES-2.61%
General Electric Co. 318,000 15,502,500
--------------------------------------------------------------------------
Tyco International Ltd. (Bermuda) 221,000 12,044,500
==========================================================================
27,547,000
==========================================================================
INDUSTRIAL MACHINERY-0.85%
Danaher Corp. 160,000 8,960,000
==========================================================================
INSURANCE BROKERS-0.95%
Marsh & McLennan Cos., Inc. 99,000 9,999,000
==========================================================================
IT CONSULTING & SERVICES-0.55%
Affiliated Computer Services, Inc.-Class A(a) 80,500 5,788,755
==========================================================================
LEISURE PRODUCTS-1.61%
Mattel, Inc. 899,000 17,009,080
==========================================================================
LIFE & HEALTH INSURANCE-1.82%
AFLAC, Inc. 273,500 8,612,515
--------------------------------------------------------------------------
UnumProvident Corp. 328,000 10,535,360
==========================================================================
19,147,875
==========================================================================
MANAGED HEALTH CARE-2.09%
CIGNA Corp. 89,300 8,556,726
--------------------------------------------------------------------------
UnitedHealth Group Inc. 218,200 13,473,850
==========================================================================
22,030,576
==========================================================================
MOVIES & ENTERTAINMENT-2.13%
AOL Time Warner Inc.(a) 424,500 22,498,500
==========================================================================
MULTI-LINE INSURANCE-0.53%
American International Group, Inc. 65,000 5,590,000
==========================================================================
MULTI-UTILITIES-0.43%
Dynegy Inc.-Class A 97,000 4,510,500
==========================================================================
|
MARKET
SHARES VALUE
NETWORKING EQUIPMENT-0.40%
Extreme Networks, Inc.(a) 144,000 $ 4,248,000
==========================================================================
OIL & GAS DRILLING-4.14%
ENSCO International Inc. 418,600 9,795,240
--------------------------------------------------------------------------
Noble Drilling Corp.(a) 180,000 5,895,000
--------------------------------------------------------------------------
Pride International, Inc.(a) 649,700 12,344,300
--------------------------------------------------------------------------
Transocean Sedco Forex Inc. 379,210 15,642,413
==========================================================================
43,676,953
==========================================================================
OIL & GAS EXPLORATION &
PRODUCTION-0.53%
Apache Corp. 109,200 5,541,900
==========================================================================
PAPER PRODUCTS-1.12%
International Paper Co. 331,000 11,816,700
==========================================================================
PHARMACEUTICALS-2.52%
Allergan, Inc. 63,000 5,386,500
--------------------------------------------------------------------------
Forest Laboratories, Inc.(a) 77,000 5,467,000
--------------------------------------------------------------------------
ICN Pharmaceuticals, Inc. 340,000 10,784,800
--------------------------------------------------------------------------
Pfizer Inc. 122,700 4,914,135
==========================================================================
26,552,435
==========================================================================
PROPERTY & CASUALTY INSURANCE-1.85%
Radian Group Inc. 141,000 5,703,450
--------------------------------------------------------------------------
XL Capital Ltd.-Class A (Bermuda) 168,000 13,792,800
==========================================================================
19,496,250
==========================================================================
RESTAURANTS-0.78%
Jack in the Box Inc.(a) 313,400 8,179,740
==========================================================================
SEMICONDUCTOR EQUIPMENT-1.81%
Applied Materials, Inc.(a) 150,000 7,365,000
--------------------------------------------------------------------------
KLA-Tencor Corp.(a) 200,000 11,694,000
==========================================================================
19,059,000
==========================================================================
SEMICONDUCTORS-2.11%
GlobeSpan, Inc.(a) 230,000 3,358,000
--------------------------------------------------------------------------
Texas Instruments Inc. 175,000 5,512,500
--------------------------------------------------------------------------
TriQuint Semiconductor, Inc.(a) 196,000 4,410,000
--------------------------------------------------------------------------
Zoran Corp.(a) 300,000 8,916,000
==========================================================================
22,196,500
==========================================================================
SOFT DRINKS-0.72%
PepsiCo, Inc. 172,000 7,602,400
==========================================================================
SPECIALTY STORES-0.95%
Michaels Stores, Inc.(a) 245,000 10,045,000
==========================================================================
SYSTEMS SOFTWARE-3.42%
BMC Software, Inc.(a) 384,000 8,655,360
--------------------------------------------------------------------------
Computer Associates International, Inc. 452,000 16,272,000
--------------------------------------------------------------------------
Microsoft Corp.(a) 77,000 5,621,000
--------------------------------------------------------------------------
|
FS-162
MARKET
SHARES VALUE
SYSTEMS SOFTWARE-(CONTINUED)
VERITAS Software Corp.(a) 83,000 $ 5,521,990
==========================================================================
36,070,350
==========================================================================
TELECOMMUNICATIONS EQUIPMENT-3.27%
Comverse Technology, Inc.(a) 141,000 8,124,420
--------------------------------------------------------------------------
Powerwave Technologies, Inc.(a) 342,000 4,959,000
--------------------------------------------------------------------------
Sonus Networks, Inc.(a) 340,000 7,942,400
--------------------------------------------------------------------------
UTStarcom, Inc.(a) 540,000 13,446,000
==========================================================================
34,471,820
==========================================================================
WIRELESS TELECOMMUNICATION
SERVICES-1.08%
Nextel Communications, Inc.-Class A(a) 367,000 6,422,500
--------------------------------------------------------------------------
Nextel Partners, Inc.-Class A(a) 319,000 4,950,880
==========================================================================
11,373,380
==========================================================================
Total Common Stocks & Other Equity
Interests (Cost $925,246,431) 1,011,768,673
==========================================================================
|
MARKET
SHARES VALUE
MONEY MARKET FUNDS-4.79%
STIC Liquid Assets Portfolio(b) 25,265,597 $ 25,265,597
--------------------------------------------------------------------------
STIC Prime Portfolio(b) 25,265,597 25,265,597
==========================================================================
Total Money Market Funds (Cost
$50,531,194) 50,531,194
==========================================================================
TOTAL INVESTMENTS-100.76% (Cost $975,777,625) 1,062,299,867
==========================================================================
OTHER ASSETS LESS LIABILITIES-(0.76%) (7,984,144)
==========================================================================
NET ASSETS-100.00% $1,054,315,723
__________________________________________________________________________
==========================================================================
|
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-163
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$975,777,625)* $1,062,299,867
-------------------------------------------------------------
Receivables for:
Fund shares sold 1,234,572
-------------------------------------------------------------
Dividends 369,465
-------------------------------------------------------------
Investment for deferred compensation plan 74,498
-------------------------------------------------------------
Collateral for securities loaned 16,268,100
-------------------------------------------------------------
Other assets 46,594
=============================================================
Total assets 1,080,293,096
=============================================================
LIABILITIES:
Payables for:
Investments purchased 6,579,880
-------------------------------------------------------------
Fund shares reacquired 2,013,589
-------------------------------------------------------------
Deferred compensation plan 74,498
-------------------------------------------------------------
Collateral upon return of securities
loaned 16,268,100
-------------------------------------------------------------
Accrued distribution fees 1,008,773
-------------------------------------------------------------
Accrued operating expenses 32,533
=============================================================
Total liabilities 25,977,373
=============================================================
Net assets applicable to shares outstanding $1,054,315,723
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 455,444,222
_____________________________________________________________
=============================================================
Class B $ 531,479,502
_____________________________________________________________
=============================================================
Class C $ 67,391,999
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 24,220,215
_____________________________________________________________
=============================================================
Class B 30,807,745
_____________________________________________________________
=============================================================
Class C 3,911,486
_____________________________________________________________
=============================================================
Class A:
Net asset value per share $ 18.80
-------------------------------------------------------------
Offering price per share:
(Net asset value of $18.80 divided by
94.50%) $ 19.89
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 17.25
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 17.23
_____________________________________________________________
=============================================================
|
* At June 30, 2001, securities with an aggregate market value of $15,780,743 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
of $13,367) $ 1,977,415
------------------------------------------------------------
Dividends from affiliated money market
funds 2,300,608
------------------------------------------------------------
Interest 61,868
------------------------------------------------------------
Security lending income 1,208
============================================================
Total investment income 4,341,099
============================================================
EXPENSES:
Advisory fees 3,530,903
------------------------------------------------------------
Administrative services fees 68,392
------------------------------------------------------------
Custodian fees 46,287
------------------------------------------------------------
Distribution fees -- Class A 576,948
------------------------------------------------------------
Distribution fees -- Class B 2,788,990
------------------------------------------------------------
Distribution fees -- Class C 332,297
------------------------------------------------------------
Transfer agent fees -- Class A 448,032
------------------------------------------------------------
Transfer agent fees -- Class B 565,387
------------------------------------------------------------
Transfer agent fees -- Class C 67,364
------------------------------------------------------------
Trustees' fees 7,174
------------------------------------------------------------
Other 245,799
============================================================
Total expenses 8,677,573
============================================================
Less: Expenses paid indirectly (17,153)
============================================================
Net expenses 8,660,420
============================================================
Net investment income (loss) (4,319,321)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES:
Net realized gain from investment
securities 9,114,427
============================================================
Change in net unrealized appreciation
(depreciation) of investment securities (239,777,538)
============================================================
Net gain (loss) from investment securities (230,663,111)
============================================================
Net increase (decrease) in net assets
resulting from operations $(234,982,432)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-164
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the year ended December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (4,319,321) $ (6,192,102)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities 9,114,427 153,404,957
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (239,777,538) (209,245,233)
==============================================================================================
Net increase (decrease) in net assets resulting from
operations (234,982,432) (62,032,378)
==============================================================================================
Distributions to shareholders from net realized gains:
Class A -- (59,353,657)
----------------------------------------------------------------------------------------------
Class B -- (80,285,223)
----------------------------------------------------------------------------------------------
Class C -- (8,275,783)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 20,970,648 150,959,050
----------------------------------------------------------------------------------------------
Class B (6,879,992) 181,653,821
----------------------------------------------------------------------------------------------
Class C 9,731,436 63,351,899
==============================================================================================
Net increase (decrease) in net assets (211,160,340) 186,017,729
==============================================================================================
NET ASSETS:
Beginning of period 1,265,476,063 1,079,458,334
==============================================================================================
End of period $1,054,315,723 $1,265,476,063
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 969,277,808 $ 945,455,716
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (4,421,079) (101,758)
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities 2,936,752 (6,177,675)
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 86,522,242 326,299,780
==============================================================================================
$1,054,315,723 $1,265,476,063
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-165
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Select Growth Fund (the "Fund") is a series portfolio of AIM Funds Group (the "Trust"). The Trust is a Delaware business trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with a contingent deferred sales charge. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. The Fund's investment objective is to achieve long-term growth of capital. At a meeting held on June 13, 2001, the Board of Trustees voted to revise the Fund's investment strategies and change the Fund's name to "AIM Select Equity Fund." 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. 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
FS-166
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.
F. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.80% of the first
$150 million of the Fund's average daily net assets, plus 0.625% of the Fund's
average daily net assets in excess of $150 million.
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 June 30, 2001, AIM was
paid $68,392 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 June 30, 2001, AFS
was paid $693,221 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $576,948,
$2,788,990 and $332,297, respectively, as compensation under the Plans.
AIM Distributors received commissions of $154,412 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $14,123 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,875
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $9,969 and reductions in custodian fees of $7,184 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $17,153.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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 6-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
FS-167
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 June 30, 2001, securities with an aggregate value of $15,780,743 were on
loan to brokers. The loans were secured by cash collateral of $16,268,100
received by the Fund and subsequently invested in the affiliated money market
fund of STIC Liquid Assets Portfolio. For the six months ended June 30, 2001,
the Fund received fees of $1,208 for securities lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2001 was
$999,141,270 and $951,686,728, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $144,073,777 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (57,551,535) ========================================================= Net unrealized appreciation of investment securities $ 86,522,242 _________________________________________________________ ========================================================= Cost of investments are the same for tax and Financial Statement purposes. |
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the year ended December 31, 2000 were as follows:
JUNE 30, 2001 DECEMBER 31, 2000
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -------------
Sold:
Class A 4,378,409 $ 86,544,369 6,779,004 $ 198,529,121
-----------------------------------------------------------------------------------------------------------------------
Class B 3,190,340 58,652,787 7,978,650 219,786,359
-----------------------------------------------------------------------------------------------------------------------
Class C 1,116,646 20,329,641 2,377,973 64,756,969
=======================================================================================================================
Issued as reinvestment of dividends:
Class A -- -- 2,458,664 56,574,104
-----------------------------------------------------------------------------------------------------------------------
Class B -- -- 3,538,127 74,996,759
-----------------------------------------------------------------------------------------------------------------------
Class C -- -- 377,111 7,983,463
=======================================================================================================================
Reacquired:
Class A (3,411,751) (65,573,721) (3,586,000) (104,144,175)
-----------------------------------------------------------------------------------------------------------------------
Class B (3,774,390) (65,532,779) (4,240,494) (113,129,297)
-----------------------------------------------------------------------------------------------------------------------
Class C (625,739) (10,598,205) (364,164) (9,388,533)
=======================================================================================================================
873,515 $ 23,822,092 15,318,871 $ 395,964,770
_______________________________________________________________________________________________________________________
=======================================================================================================================
|
FS-168
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 DECEMBER 31,
JUNE 30, --------------------------------------------------------
2001(a) 2000(a) 1999 1998 1997(a) 1996
---------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 22.88 $ 26.23 $ 19.35 $ 15.67 $ 14.78 $ 13.05
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.03) (0.01) (0.06) (0.04) 0.01 0.07
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (4.05) (0.44) 8.00 4.24 2.82 2.34
=================================================================================================================================
Total from investment operations (4.08) (0.45) 7.94 4.20 2.83 2.41
=================================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- -- (0.01) --
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (2.90) (1.06) (0.52) (1.93) (0.68)
=================================================================================================================================
Total distributions -- (2.90) (1.06) (0.52) (1.94) (0.68)
=================================================================================================================================
Net asset value, end of period $ 18.80 $ 22.88 $ 26.23 $ 19.35 $ 15.67 $ 14.78
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) (17.83)% (1.77)% 41.48% 27.09% 19.54% 18.61%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $455,444 $532,042 $461,628 $320,143 $266,168 $227,882
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.16%(c) 1.07% 1.09% 1.11% 1.13% 1.18%
=================================================================================================================================
Ratio of net investment income (loss) to average
net assets (0.36)%(c) (0.02)% (0.31)% (0.22)% 0.04% 0.46%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 92% 56% 31% 68% 110% 97%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(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
$465,383,245.
CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
2001(a) 2000(a) 1999(a) 1998 1997(a) 1996
---------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 21.07 $ 24.57 $ 18.33 $ 14.98 $ 14.32 $ 12.77
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.10) (0.22) (0.23) (0.17) (0.13) (0.05)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) (3.72) (0.38) 7.53 4.04 2.72 2.28
=================================================================================================================================
Total from investment operations (3.82) (0.60) 7.30 3.87 2.59 2.23
=================================================================================================================================
Less distributions:
Distributions from net realized gains -- (2.90) (1.06) (0.52) (1.93) (0.68)
=================================================================================================================================
Net asset value, end of period $ 17.25 $ 21.07 $ 24.57 $ 18.33 $ 14.98 $ 14.32
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) (18.13)% (2.50)% 40.29% 26.13% 18.50% 17.60%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $531,480 $661,445 $592,555 $428,002 $356,186 $280,807
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.92%(c) 1.84% 1.90% 1.93% 1.99% 2.03%
=================================================================================================================================
Ratio of net investment loss to average net assets (1.12)%(c) (0.80)% (1.12)% (1.04)% (0.82)% (0.39)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 92% 56% 31% 68% 110% 97%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(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
$562,420,644.
FS-169
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-------------------------------------------------------------------
AUGUST 4, 1997
(DATE SALES
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, COMMENCED) TO
JUNE 30, ----------------------------- DECEMBER 31,
2001(a) 2000(a) 1999(a) 1998(a) 1997(a)
---------------- ------- ------- ------- --------------
Net asset value, beginning of period $ 21.05 $ 24.55 $ 18.32 $14.98 $17.65
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.10) (0.22) (0.23) (0.17) (0.04)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (3.72) (0.38) 7.52 4.03 (0.70)
=================================================================================================================================
Total from investment operations (3.82) (0.60) 7.29 3.86 (0.74)
=================================================================================================================================
Less distributions:
Distributions from net realized gains -- (2.90) (1.06) (0.52) (1.93)
=================================================================================================================================
Net asset value, end of period $ 17.23 $ 21.05 $ 24.55 $18.32 $14.98
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) (18.15)% (2.50)% 40.26% 26.07% (3.86)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $67,392 $71,989 $25,275 $8,501 $1,189
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets 1.92%(c) 1.84% 1.90% 1.93% 1.95%(d)
=================================================================================================================================
Ratio of net investment loss to average net assets (1.12)%(c) (0.80)% (1.12)% (1.04)% (0.77)%(d)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 92% 56% 31% 68% 110%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(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 $67,010,186.
(d) Annualized.
FS-170
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-94.38%
AEROSPACE & DEFENSE-1.04%
Aeroflex Inc.(a) 32,500 $ 341,250
-----------------------------------------------------------------------
BE Aerospace, Inc.(a) 50,500 962,025
=======================================================================
1,303,275
=======================================================================
AGRICULTURAL PRODUCTS-0.75%
Delta & Pine Land Co. 47,600 935,340
=======================================================================
AIR FREIGHT & COURIERS-0.65%
UTI Worldwide, Inc. 50,800 808,736
=======================================================================
AIRLINES-1.37%
AirTran Holdings, Inc.(a) 54,800 575,400
-----------------------------------------------------------------------
Atlantic Coast Airlines Holdings(a) 38,100 1,142,619
=======================================================================
1,718,019
=======================================================================
APPAREL RETAIL-1.82%
Abercrombie & Fitch Co.-Class A(a) 24,000 1,068,000
-----------------------------------------------------------------------
Too Inc.(a) 43,800 1,200,120
=======================================================================
2,268,120
=======================================================================
APPLICATION SOFTWARE-6.16%
BSQUARE Corp.(a) 102,200 1,074,122
-----------------------------------------------------------------------
Eclipsys Corp.(a) 35,000 983,500
-----------------------------------------------------------------------
Lightbridge, Inc.(a) 67,300 1,305,620
-----------------------------------------------------------------------
Macromedia, Inc.(a) 26,500 500,850
-----------------------------------------------------------------------
MSC. Software Corp.(a) 30,000 562,500
-----------------------------------------------------------------------
Peregrine Systems, Inc.(a) 46,400 1,345,600
-----------------------------------------------------------------------
Secure Computing Corp.(a) 57,200 898,612
-----------------------------------------------------------------------
Take-Two Interactive Software, Inc.(a) 27,200 504,560
-----------------------------------------------------------------------
Verity, Inc.(a) 26,300 524,685
=======================================================================
7,700,049
=======================================================================
BANKS-5.37%
Downey Financial Corp. 25,800 1,219,308
-----------------------------------------------------------------------
East West Bancorp, Inc. 18,800 507,600
-----------------------------------------------------------------------
Hibernia Corp.-Class A 33,100 589,180
-----------------------------------------------------------------------
IndyMac Mortgage Holdings, Inc.(a) 16,400 439,520
-----------------------------------------------------------------------
Provident Financial Group, Inc. 32,400 1,066,608
-----------------------------------------------------------------------
Republic Bancorp, Inc. 81,100 1,127,290
-----------------------------------------------------------------------
Southwest Bancorp. of Texas, Inc.(a) 27,400 827,754
-----------------------------------------------------------------------
TCF Financial Corp. 20,100 930,831
=======================================================================
6,708,091
=======================================================================
BROADCASTING & CABLE TV-3.32%
Cox Radio, Inc.-Class A(a) 27,300 760,305
-----------------------------------------------------------------------
|
MARKET
SHARES VALUE
BROADCASTING & CABLE TV-(CONTINUED)
Entercom Communications Corp.(a) 14,600 $ 782,706
-----------------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 46,600 1,336,954
-----------------------------------------------------------------------
Mediacom Communications Corp.(a) 71,500 1,262,690
=======================================================================
4,142,655
=======================================================================
CATALOG RETAIL-0.84%
Insight Enterprises, Inc.(a) 42,750 1,047,375
=======================================================================
COMPUTER STORAGE & PERIPHERALS-0.35%
Advanced Digital Information Corp.(a) 25,100 434,230
=======================================================================
CONSTRUCTION & ENGINEERING-0.68%
Granite Construction Inc. 33,200 843,944
=======================================================================
CONSUMER FINANCE-1.93%
AmeriCredit Corp.(a) 23,000 1,194,850
-----------------------------------------------------------------------
Metris Companies Inc. 36,200 1,220,302
=======================================================================
2,415,152
=======================================================================
DIVERSIFIED COMMERCIAL SERVICES-5.31%
DiamondCluster International, Inc.-Class A(a) 36,400 463,372
-----------------------------------------------------------------------
Edison Schools Inc.(a) 54,560 1,246,151
-----------------------------------------------------------------------
Encompass Service Corp.(a) 75,000 671,250
-----------------------------------------------------------------------
Iron Mountain Inc.(a) 18,000 807,120
-----------------------------------------------------------------------
Plato Learning, Inc.(a) 42,300 1,309,185
-----------------------------------------------------------------------
Pre-Paid Legal Services, Inc.(a) 66,200 1,456,400
-----------------------------------------------------------------------
Profit Recovery Group International, Inc.
(The)(a) 60,000 687,600
=======================================================================
6,641,078
=======================================================================
DIVERSIFIED FINANCIAL SERVICES-4.09%
Affiliated Managers Group, Inc.(a) 16,500 1,014,750
-----------------------------------------------------------------------
Alliance Data Systems Corp.(a) 94,500 1,417,500
-----------------------------------------------------------------------
Allied Capital Corp. 17,900 414,385
-----------------------------------------------------------------------
American Capital Strategies, Ltd. 28,900 810,934
-----------------------------------------------------------------------
LaBranche & Co. Inc.(a) 20,100 582,900
-----------------------------------------------------------------------
W.P. Stewart & Co., Ltd. (Bermuda) 35,400 867,300
=======================================================================
5,107,769
=======================================================================
DRUG RETAIL-0.70%
Duane Reade, Inc.(a) 26,900 874,250
=======================================================================
ELECTRICAL COMPONENTS & EQUIPMENT-0.98%
Sensormatic Electronics Corp.(a) 72,200 1,227,400
=======================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-3.99%
Amphenol Corp.-Class A(a) 22,000 881,100
-----------------------------------------------------------------------
CTS Corp. 38,600 791,300
-----------------------------------------------------------------------
Garmin Ltd.(a) 38,800 886,580
-----------------------------------------------------------------------
|
FS-171
MARKET
SHARES VALUE
ELECTRONIC EQUIPMENT & INSTRUMENTS-(CONTINUED)
Kopin Corp.(a) 48,100 $ 583,934
-----------------------------------------------------------------------
Tektronix, Inc.(a) 30,500 828,075
-----------------------------------------------------------------------
Varian Inc.(a) 31,600 1,020,680
=======================================================================
4,991,669
=======================================================================
EMPLOYMENT SERVICES-0.16%
Heidrick & Struggles International, Inc.(a) 10,100 205,333
=======================================================================
ENVIRONMENTAL SERVICES-1.88%
Tetra Tech, Inc.(a) 37,300 1,014,560
-----------------------------------------------------------------------
Waste Connections, Inc.(a) 37,100 1,335,600
=======================================================================
2,350,160
=======================================================================
GENERAL MERCHANDISE STORES-0.86%
Ross Stores, Inc. 45,000 1,077,750
=======================================================================
HEALTH CARE DISTRIBUTORS & SERVICES-5.48%
AdvancePCS(a) 2,000 128,100
-----------------------------------------------------------------------
Apria Healthcare Group Inc.(a) 43,300 1,249,205
-----------------------------------------------------------------------
First Horizon Pharmaceutical Corp.(a) 24,800 796,080
-----------------------------------------------------------------------
Lincare Holdings Inc.(a) 27,400 846,386
-----------------------------------------------------------------------
MAXIMUS, Inc.(a) 34,000 1,363,060
-----------------------------------------------------------------------
Professional Detailing, Inc.(a) 7,300 671,600
-----------------------------------------------------------------------
Syncor International Corp.(a) 34,600 1,072,600
-----------------------------------------------------------------------
Unilab Corp.(a) 28,700 723,240
=======================================================================
6,850,271
=======================================================================
HEALTH CARE EQUIPMENT-1.42%
Apogent Technologies Inc.(a) 33,400 821,640
-----------------------------------------------------------------------
Noven Pharmaceuticals, Inc.(a) 24,150 946,680
=======================================================================
1,768,320
=======================================================================
HEALTH CARE FACILITIES-3.13%
LifePoint Hospitals, Inc.(a) 36,500 1,616,220
-----------------------------------------------------------------------
RehabCare Group, Inc.(a) 21,800 1,050,760
-----------------------------------------------------------------------
Select Medical Corp.(a) 62,500 1,250,000
=======================================================================
3,916,980
=======================================================================
INSURANCE BROKERS-0.48%
Willis Group Holdings Ltd.(a) 33,900 601,725
=======================================================================
INTEGRATED TELECOMMUNICATION
SERVICES-0.88%
Illuminet Holdings, Inc.(a) 35,000 1,100,750
=======================================================================
INTERNET SOFTWARE & SERVICES-2.77%
Hotel Reservations Network, Inc.-Class A(a) 19,500 907,335
-----------------------------------------------------------------------
IntraNet Solutions, Inc.(a) 27,200 1,034,960
-----------------------------------------------------------------------
PEC Solutions, Inc.(a) 68,500 1,513,850
=======================================================================
3,456,145
=======================================================================
IT CONSULTING & SERVICES-0.69%
Titan Corp. (The)(a) 37,400 856,460
=======================================================================
|
MARKET
SHARES VALUE
LEISURE PRODUCTS-0.44%
Callaway Golf Co. 34,700 $ 548,260
=======================================================================
MANAGED HEALTH CARE-2.51%
First Health Group Corp.(a) 34,700 836,964
-----------------------------------------------------------------------
Orthodontic Centers of America, Inc.(a) 40,100 1,218,639
-----------------------------------------------------------------------
Rightchoice Managed Care, Inc.(a) 24,300 1,078,920
=======================================================================
3,134,523
=======================================================================
MOVIES & ENTERTAINMENT-0.87%
Alliance Atlantis Communications Inc.-Class B
(Canada)(a) 80,000 1,085,068
=======================================================================
MULTI-UTILITIES-2.41%
Aquila, Inc.(a) 14,400 354,960
-----------------------------------------------------------------------
Covanta Energy Corp.(a) 56,900 1,050,374
-----------------------------------------------------------------------
MDU Resources Group, Inc. 26,100 825,804
-----------------------------------------------------------------------
UtiliCorp United Inc. 25,500 779,025
=======================================================================
3,010,163
=======================================================================
NETWORKING EQUIPMENT-0.38%
Stratos Lightwave, Inc.(a) 36,573 475,449
=======================================================================
OIL & GAS DRILLING-0.56%
Pride International, Inc.(a) 37,000 703,000
=======================================================================
OIL & GAS EQUIPMENT & SERVICES-1.21%
Grant Prideco, Inc.(a) 47,400 829,026
-----------------------------------------------------------------------
Key Energy Services, Inc.(a) 63,400 687,256
=======================================================================
1,516,282
=======================================================================
OIL & GAS EXPLORATION & PRODUCTION-1.75%
Forest Oil Corp.(a) 21,450 600,600
-----------------------------------------------------------------------
Louis Dreyfus Natural Gas Corp.(a) 24,100 839,885
-----------------------------------------------------------------------
XTO Energy, Inc. 51,600 740,460
=======================================================================
2,180,945
=======================================================================
PACKAGED FOODS-0.79%
Earthgrains Co.(The) 38,100 990,600
=======================================================================
PHARMACEUTICALS-0.69%
ICN Pharmaceuticals, Inc. 27,100 859,612
=======================================================================
PROPERTY & CASUALTY INSURANCE-2.21%
HCC Insurance Holdings, Inc. 27,700 678,650
-----------------------------------------------------------------------
Radian Group Inc. 15,000 606,750
-----------------------------------------------------------------------
Vesta Insurance Group, Inc. 135,000 1,478,250
=======================================================================
2,763,650
=======================================================================
PUBLISHING & PRINTING-0.39%
PRIMEDIA Inc.(a) 72,700 493,633
=======================================================================
REAL ESTATE INVESTMENT TRUSTS-3.57%
America First Mortgage Investments, Inc. 150,000 1,113,000
-----------------------------------------------------------------------
Annaly Mortgage Management Inc. 74,000 1,014,540
-----------------------------------------------------------------------
|
FS-172
MARKET
SHARES VALUE
REAL ESTATE INVESTMENT TRUSTS-(CONTINUED)
Anthracite Mortgage Capital, Inc. 100,000 $ 1,105,000
-----------------------------------------------------------------------
CarrAmerica Realty Corp. 21,800 664,900
-----------------------------------------------------------------------
Post Properties, Inc. 14,800 560,180
=======================================================================
4,457,620
=======================================================================
REINSURANCE-2.51%
Annuity and Life Reassurance Holdings, Ltd.
(Bermuda) 34,100 1,219,075
-----------------------------------------------------------------------
PartnerRe Ltd. (Bermuda) 20,200 1,119,080
-----------------------------------------------------------------------
RenaissanceRe Holdings Ltd. (Bermuda) 10,700 792,870
=======================================================================
3,131,025
=======================================================================
RESTAURANTS-1.98%
CEC Entertainment Inc.(a) 26,000 1,283,100
-----------------------------------------------------------------------
Jack in the Box Inc.(a) 24,400 636,840
-----------------------------------------------------------------------
P.F. Chang's China Bistro, Inc.(a) 14,700 557,130
=======================================================================
2,477,070
=======================================================================
SEMICONDUCTOR EQUIPMENT-1.72%
Ultratech Stepper, Inc.(a) 54,800 1,405,620
-----------------------------------------------------------------------
Varian Semiconductor Equipment Associates,
Inc.(a) 18,000 738,000
=======================================================================
2,143,620
=======================================================================
SEMICONDUCTORS-2.71%
Actel Corp.(a) 24,200 594,110
-----------------------------------------------------------------------
Alpha Industries, Inc.(a) 26,500 783,075
-----------------------------------------------------------------------
Fairchild Semiconductor Corp.-Class A(a) 48,000 1,104,000
-----------------------------------------------------------------------
Semtech Corp.(a) 30,000 900,000
=======================================================================
3,381,185
=======================================================================
SPECIALTY CHEMICALS-0.76%
International Flavors & Fragrances Inc. 38,000 954,940
=======================================================================
SPECIALTY STORES-6.41%
Barnes & Noble, Inc.(a) 29,100 1,145,085
-----------------------------------------------------------------------
|
MARKET
SHARES VALUE
SPECIALTY STORES-(CONTINUED)
Copart, Inc.(a) 45,300 $ 1,325,025
-----------------------------------------------------------------------
Linens 'n Things, Inc.(a) 34,000 928,880
-----------------------------------------------------------------------
Michaels Stores, Inc.(a) 31,100 1,275,100
-----------------------------------------------------------------------
Rent-A-Center, Inc.(a) 17,900 941,540
-----------------------------------------------------------------------
Sonic Automotive, Inc.(a) 61,300 1,170,830
-----------------------------------------------------------------------
Venator Group, Inc.(a) 80,300 1,228,590
=======================================================================
8,015,050
=======================================================================
STEEL-0.79%
Allegheny Technologies, Inc. 54,800 991,332
=======================================================================
SYSTEMS SOFTWARE-0.91%
Moldflow Corp.(a) 73,600 1,134,176
=======================================================================
TELECOMMUNICATIONS EQUIPMENT-0.92%
Polycom, Inc.(a) 35,700 824,313
-----------------------------------------------------------------------
Powerwave Technologies, Inc.(a) 22,300 323,350
=======================================================================
1,147,663
=======================================================================
TEXTILES-0.79%
Wellman, Inc. 55,100 986,290
=======================================================================
Total Common Stocks & Other Equity
Interests (Cost $101,031,469) 117,932,202
=======================================================================
MONEY MARKET FUNDS-6.28%
STIC Liquid Assets Portfolio(b) 3,920,281 3,920,281
-----------------------------------------------------------------------
STIC Prime Portfolio(b) 3,920,281 3,920,281
=======================================================================
Total Money Market Funds (Cost
$7,840,562) 7,840,562
=======================================================================
TOTAL INVESTMENTS-100.66% (Cost $108,872,031) 125,772,764
=======================================================================
OTHER ASSETS LESS LIABILITIES-(0.66%) (819,957)
=======================================================================
NET ASSETS-100.00% $124,952,807
_______________________________________________________________________
=======================================================================
|
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-173
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$108,872,031) $125,772,764
------------------------------------------------------------
Receivables for:
Investments sold 34,267
------------------------------------------------------------
Fund shares sold 1,678,782
------------------------------------------------------------
Dividends 119,638
------------------------------------------------------------
Investment for deferred compensation plan 4,688
------------------------------------------------------------
Other assets 49,572
============================================================
Total assets 127,659,711
============================================================
LIABILITIES:
Payables for:
Investments purchased 1,436,746
------------------------------------------------------------
Fund shares reacquired 1,086,373
------------------------------------------------------------
Deferred compensation plan 4,688
------------------------------------------------------------
Accrued distribution fees 99,696
------------------------------------------------------------
Accrued transfer agent fees 45,566
------------------------------------------------------------
Accrued operating expenses 33,835
============================================================
Total liabilities 2,706,904
============================================================
Net assets applicable to shares outstanding $124,952,807
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 65,489,648
____________________________________________________________
============================================================
Class B $ 41,682,785
____________________________________________________________
============================================================
Class C $ 17,780,374
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 6,411,786
____________________________________________________________
============================================================
Class B 4,104,420
____________________________________________________________
============================================================
Class C 1,750,773
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 10.21
------------------------------------------------------------
Offering price per share:
(Net asset value of $10.21 divided
by 94.50%) $ 10.80
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 10.16
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 10.16
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends $ 324,855
------------------------------------------------------------
Dividends from affiliated money market funds 177,771
============================================================
Total investment income 502,626
============================================================
EXPENSES:
Advisory fees 354,228
------------------------------------------------------------
Administrative services fees 24,795
------------------------------------------------------------
Custodian fees 19,045
------------------------------------------------------------
Distribution fees -- Class A 79,477
------------------------------------------------------------
Distribution fees -- Class B 130,705
------------------------------------------------------------
Distribution fees -- Class C 62,407
------------------------------------------------------------
Transfer agent fees -- Class A 73,316
------------------------------------------------------------
Transfer agent fees -- Class B 44,535
------------------------------------------------------------
Transfer agent fees -- Class C 21,264
------------------------------------------------------------
Trustees' fees 4,947
------------------------------------------------------------
Registration and filing fees 88,176
------------------------------------------------------------
Other 42,310
============================================================
Total expenses 945,205
============================================================
Less: Fees waived (54,886)
------------------------------------------------------------
Expenses paid indirectly (672)
============================================================
Net expenses 889,647
============================================================
Net investment income (loss) (387,021)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT
SECURITIES, FOREIGN CURRENCIES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (3,885,265)
------------------------------------------------------------
Foreign currencies 834
------------------------------------------------------------
Option contracts written 30,574
============================================================
(3,853,857)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 14,836,829
------------------------------------------------------------
Option contracts written (3,677)
============================================================
14,833,152
============================================================
Net gain from investment securities, foreign
currencies and option contracts 10,979,295
============================================================
Net increase in net assets resulting from
operations $10,592,274
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-174
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the year ended December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income (loss) $ (387,021) $ (42,970)
-----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, futures contracts and option
contracts (3,853,857) (3,388,953)
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and option contracts 14,833,152 2,067,581
=========================================================================================
Net increase (decrease) in net assets resulting from
operations 10,592,274 (1,364,342)
=========================================================================================
Share transactions-net:
Class A 27,070,714 33,716,692
-----------------------------------------------------------------------------------------
Class B 21,840,033 16,719,812
-----------------------------------------------------------------------------------------
Class C 7,230,911 9,146,713
=========================================================================================
Net increase in net assets 66,733,932 58,218,875
=========================================================================================
NET ASSETS:
Beginning of period 58,218,875 --
=========================================================================================
End of period $124,952,807 $58,218,875
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $115,714,239 $59,572,581
-----------------------------------------------------------------------------------------
Undistributed net investment income (loss) (419,355) (32,334)
-----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, futures contracts and
option contracts (7,242,810) (3,388,953)
-----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
option contracts 16,900,733 2,067,581
=========================================================================================
$124,952,807 $58,218,875
_________________________________________________________________________________________
=========================================================================================
|
See Notes to Financial Statements.
FS-175
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Small Cap Equity Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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. The Fund has a capital loss carryforward of $700,371 as of December 31, 2000 which may be carried forward to offset future taxable gains, if any, which expires, if not previously utilized, through 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
FS-176
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. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.85% of the Fund's
average daily net assets. For the six months ended June 30, 2001, AIM waived
fees of $54,886.
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 June 30, 2001, AIM was
paid $24,795 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 June 30, 2001, AFS
was paid $62,129 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
0.35% 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 June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $79,477,
$130,705 and $62,407, respectively, as compensation under the Plans.
AIM Distributors received commissions of $69,645 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $33,408 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,763
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $672 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $672.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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
FS-177
commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2001 was
$101,373,955 and $48,387,933, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $19,637,678 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (2,838,390) ========================================================= Net unrealized appreciation of investment securities $16,799,288 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $108,973,476. |
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of period 47 $ 8,084
---------------------------------------------------------
Written 183 194,804
---------------------------------------------------------
Exercised (120) (172,314)
---------------------------------------------------------
Expired (110) (30,574)
=========================================================
End of period -- $ --
_________________________________________________________
=========================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the period August 31, 2000 (date operations commenced) through December 31, 2000:
JUNE 30, 2001 DECEMBER 31, 2000
-------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
Sold:
Class A 3,983,468 $ 37,080,488 3,707,242 $35,554,951
--------------------------------------------------------------------------------------------------------------------
Class B 2,644,547 24,616,601 1,851,798 17,580,252
--------------------------------------------------------------------------------------------------------------------
Class C 1,180,152 10,886,338 1,021,221 9,654,027
====================================================================================================================
Reacquired:
Class A (1,078,252) (10,009,774) (200,672) (1,838,259)
--------------------------------------------------------------------------------------------------------------------
Class B (295,533) (2,776,568) (96,392) (860,440)
--------------------------------------------------------------------------------------------------------------------
Class C (396,402) (3,655,427) (54,198) (507,314)
====================================================================================================================
6,037,980 $ 56,141,658 6,228,999 $59,583,217
____________________________________________________________________________________________________________________
====================================================================================================================
|
FS-178
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 9.36 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.03) --
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 0.88 (0.64)
==================================================================================================
Total from investment operations 0.85 (0.64)
==================================================================================================
Net asset value, end of period $ 10.21 $ 9.36
__________________________________________________________________________________________________
==================================================================================================
Total return(b) 9.08% (6.40)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $65,490 $32,805
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.81%(c) 1.78%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 1.94%(c) 2.72%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (0.61)%(c) (0.12)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 60% 49%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $45,791,536.
(d) Annualized.
CLASS B
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 9.33 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06) (0.03)
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 0.89 (0.64)
==================================================================================================
Total from investment operations 0.83 (0.67)
==================================================================================================
Net asset value, end of period $ 10.16 $ 9.33
__________________________________________________________________________________________________
==================================================================================================
Total return(b) 8.90% (6.70)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $41,683 $16,385
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.48%(c) 2.49%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 2.61%(c) 3.43%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.28)%(c) (0.83)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 60% 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 annualized and based on average daily net assets of $26,357,664.
(d) Annualized.
FS-179
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 9.34 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06) (0.03)
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 0.88 (0.63)
==================================================================================================
Total from investment operations 0.82 (0.66)
==================================================================================================
Net asset value, end of period $ 10.16 $ 9.34
__________________________________________________________________________________________________
==================================================================================================
Total return(b) 8.78% (6.60)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data: Net assets, end of period (000s
omitted) $17,780 $ 9,028
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.48%(c) 2.49%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 2.61%(c) 3.43%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.28)%(c) (0.83)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 60% 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 annualized and based on average daily net assets of $12,584,915.
(d) Annualized.
FS-180
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY INTERESTS-90.97%
ADVERTISING-2.93%
Omnicom Group Inc.(a) 7,550,000 $ 649,300,000
============================================================================
APPLICATION SOFTWARE-1.34%
Amdocs Ltd. (United Kingdom)(b) 4,131,700 222,492,045
----------------------------------------------------------------------------
PeopleSoft, Inc.(b) 1,493,000 73,500,390
============================================================================
295,992,435
============================================================================
BANKS-1.36%
Bank of New York Co., Inc. (The) 6,250,000 300,000,000
============================================================================
BROADCASTING & CABLE TV-7.88%
Comcast Corp.-Class A(b) 19,773,700 858,178,580
----------------------------------------------------------------------------
Cox Communications, Inc.-Class A(b) 20,000,000 886,000,000
============================================================================
1,744,178,580
============================================================================
COMPUTER & ELECTRONICS RETAIL-1.15%
Best Buy Co., Inc.(b) 4,000,000 254,080,000
============================================================================
COMPUTER HARDWARE-0.46%
Compaq Computer Corp. 6,600,000 102,234,000
============================================================================
COMPUTER STORAGE & PERIPHERALS-0.62%
EMC Corp.(b) 4,750,000 137,987,500
============================================================================
DATA PROCESSING SERVICES-5.12%
Automatic Data Processing, Inc. 6,000,000 298,200,000
----------------------------------------------------------------------------
First Data Corp. 13,000,000 835,250,000
============================================================================
1,133,450,000
============================================================================
DIVERSIFIED FINANCIAL SERVICES-12.80%
American Express Co. 6,000,000 232,800,000
----------------------------------------------------------------------------
Citigroup Inc. 13,000,000 686,920,000
----------------------------------------------------------------------------
Fannie Mae 4,750,000 404,462,500
----------------------------------------------------------------------------
Freddie Mac 7,500,000 525,000,000
----------------------------------------------------------------------------
J.P. Morgan Chase & Co. 11,277,500 502,976,500
----------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 7,500,000 481,725,000
============================================================================
2,833,884,000
============================================================================
DRUG RETAIL-1.39%
Walgreen Co. 9,000,000 307,350,000
============================================================================
ELECTRIC UTILITIES-1.55%
Calpine Corp.(b) 1,000,000 37,800,000
----------------------------------------------------------------------------
Duke Energy Corp. 4,291,000 167,391,910
----------------------------------------------------------------------------
Mirant Corp.(b) 4,000,000 137,600,000
============================================================================
342,791,910
============================================================================
|
MARKET
SHARES VALUE
ELECTRONIC EQUIPMENT & INSTRUMENTS-1.92%
Celestica Inc. (Canada)(b) 7,788,400 $ 401,102,600
----------------------------------------------------------------------------
Solectron Corp.(b) 1,350,000 24,705,000
============================================================================
425,807,600
============================================================================
FOOD RETAIL-2.85%
Kroger Co. (The)(b) 8,000,000 200,000,000
----------------------------------------------------------------------------
Safeway Inc.(b) 9,000,000 432,000,000
============================================================================
632,000,000
============================================================================
GENERAL MERCHANDISE STORES-2.97%
Target Corp. 19,000,000 657,400,000
============================================================================
HEALTH CARE EQUIPMENT-1.63%
Baxter International Inc. 5,175,000 253,575,000
----------------------------------------------------------------------------
Guidant Corp.(b) 3,000,000 108,000,000
============================================================================
361,575,000
============================================================================
HEALTH CARE FACILITIES-1.94%
HCA Inc. 9,500,000 429,305,000
============================================================================
HOUSEHOLD PRODUCTS-0.95%
Kimberly-Clark Corp. 3,750,000 209,625,000
============================================================================
INDUSTRIAL CONGLOMERATES-5.72%
General Electric Co. 11,455,000 558,431,250
----------------------------------------------------------------------------
Tyco International Ltd. (Bermuda) 13,000,000 708,500,000
============================================================================
1,266,931,250
============================================================================
INTEGRATED OIL & GAS-4.26%
BP Amoco PLC-ADR (United Kingdom) 8,500,000 423,725,000
----------------------------------------------------------------------------
Chevron Corp. 2,375,000 214,937,500
----------------------------------------------------------------------------
Exxon Mobil Corp. 3,500,000 305,725,000
============================================================================
944,387,500
============================================================================
INTEGRATED TELECOMMUNICATION SERVICES-0.48%
Qwest Communications International Inc. 3,363,000 107,178,810
============================================================================
INTERNET SOFTWARE & SERVICES-0.40%
Check Point Software Technologies Ltd.
(Israel)(b) 1,734,000 87,688,380
============================================================================
MANAGED HEALTH CARE-3.74%
CIGNA Corp. 3,000,000 287,460,000
----------------------------------------------------------------------------
UnitedHealth Group Inc. 8,750,000 540,312,500
============================================================================
827,772,500
============================================================================
MOVIES & ENTERTAINMENT-2.99%
AOL Time Warner Inc.(b) 12,500,000 662,500,000
============================================================================
|
FS-181
MARKET
SHARES VALUE
MULTI-LINE INSURANCE-4.64%
American International Group, Inc. 10,125,000 $ 870,750,000
----------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The) 2,300,000 157,320,000
============================================================================
1,028,070,000
============================================================================
MULTI-UTILITIES-2.37%
Enron Corp. 4,519,000 221,431,000
----------------------------------------------------------------------------
Williams Cos., Inc. (The) 9,205,800 303,331,110
============================================================================
524,762,110
============================================================================
NETWORKING EQUIPMENT-0.91%
Brocade Communications Systems, Inc.(b) 1,665,300 73,256,547
----------------------------------------------------------------------------
Cisco Systems, Inc.(b) 7,000,000 127,400,000
============================================================================
200,656,547
============================================================================
OIL & GAS DRILLING-1.05%
Transocean Sedco Forex Inc. 5,650,000 233,062,500
============================================================================
PHARMACEUTICALS-7.76%
Abbott Laboratories 3,500,000 168,035,000
----------------------------------------------------------------------------
Allergan, Inc. 450,000 38,475,000
----------------------------------------------------------------------------
Johnson & Johnson 10,650,000 532,500,000
----------------------------------------------------------------------------
Pfizer Inc. 20,391,200 816,667,560
----------------------------------------------------------------------------
Schering-Plough Corp. 4,500,000 163,080,000
============================================================================
1,718,757,560
============================================================================
PROPERTY & CASUALTY INSURANCE-0.16%
St. Paul Co., Inc. (The) 713,100 36,147,039
============================================================================
SEMICONDUCTOR EQUIPMENT-0.59%
Applied Materials, Inc.(b) 2,000,000 98,200,000
----------------------------------------------------------------------------
Teradyne, Inc.(b) 1,000,000 33,100,000
============================================================================
131,300,000
============================================================================
SEMICONDUCTORS-1.61%
Analog Devices, Inc.(b) 8,250,000 356,812,500
============================================================================
|
MARKET
SHARES VALUE
SOFT DRINKS-1.05%
PepsiCo, Inc. 5,250,000 $ 232,050,000
============================================================================
SYSTEMS SOFTWARE-1.46%
Microsoft Corp.(b) 2,339,000 170,747,000
----------------------------------------------------------------------------
Oracle Corp.(b) 8,000,000 152,000,000
============================================================================
322,747,000
============================================================================
TELECOMMUNICATIONS EQUIPMENT-0.62%
Nokia Oyj-ADR (Finland) 6,200,000 136,648,000
============================================================================
WIRELESS TELECOMMUNICATION SERVICES-2.30%
Nextel Communications, Inc.-Class A(b) 29,093,800 509,141,500
----------------------------------------------------------------------------
Total Common Stocks & Other Equity Interests
(Cost $17,841,625,791) 20,143,574,221
============================================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.31%
U.S. TREASURY BILLS-0.31%
3.44%, 09/20/01 (Cost $69,464,500)(c) 70,000,000(d) 69,469,400
============================================================================
SHARES
MONEY MARKET FUNDS-9.01%
STIC Liquid Assets Portfolio(e) 997,987,008 997,987,008
----------------------------------------------------------------------------
STIC Prime Portfolio(e) 997,987,008 997,987,008
============================================================================
Total Money Market Funds (Cost
$1,995,974,016) 1,995,974,016
============================================================================
TOTAL INVESTMENTS-100.29% (Cost
$19,907,064,307) 22,209,017,637
============================================================================
OTHER ASSETS LESS LIABILITIES-(0.29)% (64,642,351)
============================================================================
NET ASSETS-100.00% $22,144,375,286
____________________________________________________________________________
============================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt |
Notes to Schedule of Investments:
(a) Affiliated issuer in which the Fund's holdings of the issuer represent 5%
or more of the outstanding voting securities of the issuer. The Fund has
not owned enough of the outstanding voting securities of the issuer to have
control (as defined in the Investment Company Act of 1940) of that issuer.
The market value as of 06/30/01 represented 2.93% of the Fund's net assets.
(b) Non-income producing security.
(c) U.S. Treasury bills are traded on a discount basis. The interest rate shown
represents the rate of discount paid or received at the time of purchase by
the Fund.
(d) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 8.
(e) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-182
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$19,907,064,307)* $22,209,017,637
-------------------------------------------------------------
Receivables for:
Investments sold 122,112,727
-------------------------------------------------------------
Variation margin 2,585,000
-------------------------------------------------------------
Fund shares sold 15,712,679
-------------------------------------------------------------
Dividends 12,389,589
-------------------------------------------------------------
Investment for deferred compensation plan 309,908
-------------------------------------------------------------
Collateral for securities loaned 222,948,300
-------------------------------------------------------------
Other assets 91,338
=============================================================
Total assets 22,585,167,178
=============================================================
LIABILITIES:
Payables for:
Investments purchased 140,790,925
-------------------------------------------------------------
Fund shares reacquired 44,975,352
-------------------------------------------------------------
Foreign currency contracts closed 1,235,895
-------------------------------------------------------------
Foreign currency contracts outstanding 3,649,485
-------------------------------------------------------------
Deferred compensation plan 309,908
-------------------------------------------------------------
Collateral upon return of securities
loaned 222,948,300
-------------------------------------------------------------
Accrued distribution fees 22,047,346
-------------------------------------------------------------
Accrued transfer agent fees 3,547,295
-------------------------------------------------------------
Accrued operating expenses 1,287,386
=============================================================
Total liabilities 440,791,892
=============================================================
Net assets applicable to shares outstanding $22,144,375,286
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $10,045,220,358
_____________________________________________________________
=============================================================
Class B $10,972,771,687
_____________________________________________________________
=============================================================
Class C $ 1,126,383,241
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 855,188,556
_____________________________________________________________
=============================================================
Class B 982,025,658
_____________________________________________________________
=============================================================
Class C 100,752,287
_____________________________________________________________
=============================================================
Class A:
Net asset value per share $ 11.75
-------------------------------------------------------------
Offering price per share:
(Net asset value of $11.75 divided by
94.50%) $ 12.43
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 11.17
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 11.18
_____________________________________________________________
=============================================================
|
* At June 30, 2001, securities with an aggregate market value of $184,346,881 were on loan to brokers.
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$790,867) $ 68,585,478
-------------------------------------------------------------
Dividends from affiliated money market funds 53,185,014
-------------------------------------------------------------
Interest 1,560,496
-------------------------------------------------------------
Security lending income 237,666
=============================================================
Total investment income 123,568,654
=============================================================
EXPENSES:
Advisory fees 72,746,231
-------------------------------------------------------------
Administrative services fees 400,626
-------------------------------------------------------------
Custodian fees 555,898
-------------------------------------------------------------
Distribution fees -- Class A 13,084,290
-------------------------------------------------------------
Distribution fees -- Class B 57,766,811
-------------------------------------------------------------
Distribution fees -- Class C 5,907,455
-------------------------------------------------------------
Transfer agent fees -- Class A 9,757,009
-------------------------------------------------------------
Transfer agent fees -- Class B 11,370,582
-------------------------------------------------------------
Transfer agent fees -- Class C 1,162,799
-------------------------------------------------------------
Trustees' fees 54,926
-------------------------------------------------------------
Other 3,385,596
=============================================================
Total expenses 176,192,223
=============================================================
Less: Fees waived (5,432,918)
-------------------------------------------------------------
Expenses paid indirectly (212,610)
=============================================================
Net expenses 170,546,695
=============================================================
Net investment income (loss) (46,978,041)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCY
CONTRACTS, FUTURES CONTRACTS AND OPTION
CONTRACTS:
Net realized gain (loss) from:
Investment securities (827,278,249)
-------------------------------------------------------------
Foreign currency contracts 4,187,021
-------------------------------------------------------------
Futures contracts (93,528,988)
-------------------------------------------------------------
Option contracts written 48,068,160
=============================================================
(868,552,056)
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (609,045,292)
-------------------------------------------------------------
Foreign currency contracts 26,524,143
-------------------------------------------------------------
Futures contracts (18,000,598)
-------------------------------------------------------------
Option contracts written (49,439,506)
=============================================================
(649,961,253)
=============================================================
Net gain (loss) from investment securities,
foreign currency contracts, futures
contracts and option contracts: (1,518,513,309)
=============================================================
Net increase (decrease) in net assets
resulting from operations $(1,565,491,350)
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
FS-183
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the year ended December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
--------------- ---------------
OPERATIONS:
Net investment income (loss) $ (46,978,041) $ (153,822,863)
------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currency contracts, futures contracts and option
contracts (868,552,056) 1,802,222,254
------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currency contracts,
futures contracts and option contracts (649,961,253) (6,293,440,690)
================================================================================================
Net increase (decrease) in net assets resulting from
operations (1,565,491,350) (4,645,041,299)
================================================================================================
Distributions to shareholders from net realized gains:
Class A -- (1,074,794,698)
------------------------------------------------------------------------------------------------
Class B -- (1,247,299,950)
------------------------------------------------------------------------------------------------
Class C -- (126,240,715)
------------------------------------------------------------------------------------------------
Share transactions-net:
Class A (495,177,582) 1,670,331,026
------------------------------------------------------------------------------------------------
Class B (718,097,498) 1,786,995,772
------------------------------------------------------------------------------------------------
Class C (53,919,909) 774,093,169
================================================================================================
Net increase (decrease) in net assets (2,832,686,339) (2,861,956,695)
================================================================================================
NET ASSETS:
Beginning of period 24,977,061,625 27,839,018,320
================================================================================================
End of period $22,144,375,286 $24,977,061,625
________________________________________________________________________________________________
================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $20,769,314,314 $22,036,509,303
------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (47,729,205) (751,164)
------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currency contracts, futures
contracts and option contracts (846,705,002) 21,847,054
------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currency contracts, futures contracts and option
contracts 2,269,495,179 2,919,456,432
================================================================================================
$22,144,375,286 $24,977,061,625
________________________________________________________________________________________________
================================================================================================
|
See Notes to Financial Statements.
FS-184
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve long-term growth of capital. Income is a secondary objective.
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 fluctuations are included with the net realized and unrealized gain or loss from investments.
FS-185
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.
Outstanding foreign currency contracts at June 30, 2001 were as follows:
CONTRACT TO UNREALIZED
SETTLEMENT -------------------------- APPRECIATION
DATE CURRENCY DELIVER RECEIVE VALUE (DEPRECIATION)
---------- -------- ----------- ------------ ------------ --------------
08/30/01 CAD 452,750,000 $293,139,268 $297,865,501 $(4,726,233)
---------------------------------------------------------------------------------
08/31/01 EUR 125,350,000 107,204,514 106,127,766 1,076,748
=================================================================================
$400,343,782 $403,993,267 $(3,649,485)
_________________________________________________________________________________
=================================================================================
|
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 and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.80% of the first
$150 million of the Fund's average daily net assets, plus 0.625% of the Fund's
average daily net assets in excess of $150 million. Effective July 1, 2000, AIM
has agreed to waive advisory fees payable by the Fund to AIM at the annual rate
of 0.025% for each $5 billion increment in net assets over $5 billion, up to a
maximum waiver of 0.175% on net assets in excess of $35 billion. For the six
months ended June 30, 2001, AIM waived fees of $5,432,918.
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 June 30, 2001, AIM was
paid $400,626 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 June 30, 2001, AFS
was paid $11,068,372 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $13,084,290,
$57,766,811 and $5,907,455, respectively, as compensation under the Plans.
AIM Distributors received commissions of $1,347,004 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
FS-186
2001, AIM Distributors received $351,065 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $13,240
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $212,610 which resulted in a reduction of the Fund's total expenses of $212,610.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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 6-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 June 30, 2001, securities with an aggregate value of $184,346,881 were on
loan to brokers. The loans were secured by cash collateral of $222,948,300
received by the Fund and subsequently invested in the affiliated money market
fund STIC Liquid Assets Portfolio, an affiliated money market fund. For the six
months ended June 30, 2001, the Fund received fees of $237,666 for securities
lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2001 was
$4,909,177,455 and $6,015,655,414, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 3,669,810,613 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (1,402,154,602) ========================================================== Net unrealized appreciation of investment securities $ 2,267,656,011 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $19,941,361,626. |
NOTE 8-FUTURES CONTRACTS
On June 30, 2001, $42,175,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts at June 30, 2001 were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- ------------ ------------ --------------
S&P 500 Index 2,200 Sep. 01/Long $677,435,000 $(28,808,666)
_______________________________________________________________________________
===============================================================================
|
NOTE 9-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Beginning of period 86,390 $ 76,053,069
----------------------------------------------------------
Closed (17,000) (10,569,566)
----------------------------------------------------------
Exercised (32,000) (26,673,189)
----------------------------------------------------------
Expired (37,390) (38,810,314)
==========================================================
End of period -- $ --
__________________________________________________________
==========================================================
|
FS-187
NOTE 10-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the year ended December 31, 2000 were as follows:
JUNE 30, 2001 DECEMBER 31, 2000
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------- ---------------
Sold:
Class A 56,447,089 $ 681,583,286 630,010,408 $ 3,156,759,316
------------------------------------------------------------------------------------------------------------------------------
Class B 33,894,693 390,739,225 703,853,509 2,552,273,834
------------------------------------------------------------------------------------------------------------------------------
Class C 8,735,076 101,198,005 87,455,815 904,931,025
==============================================================================================================================
Issued as reinvestment of dividends:
Class A -- -- 83,714,399 1,028,837,590
------------------------------------------------------------------------------------------------------------------------------
Class B -- -- 99,085,297 1,163,271,351
------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 10,150,935 119,273,711
==============================================================================================================================
Reacquired:
Class A (98,553,596) (1,176,760,868) (75,280,734) (2,515,265,880)
------------------------------------------------------------------------------------------------------------------------------
Class B (97,742,000) (1,108,836,723) (60,835,163) (1,928,549,413)
------------------------------------------------------------------------------------------------------------------------------
Class C (13,608,731) (155,117,914) (10,212,288) (250,111,567)
==============================================================================================================================
(110,827,469) $(1,267,194,989) 1,467,942,178 $ 4,231,419,967
______________________________________________________________________________________________________________________________
==============================================================================================================================
|
NOTE 11-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 DECEMBER 31,
JUNE 30, --------------------------------------------------------------------
2001 2000(a) 1999(b) 1998(b) 1997(b) 1996(a)(b)
---------------- ----------- ----------- ---------- ---------- ----------
Net asset value, beginning of period $ 12.51 $ 16.28 $ 13.40 $ 10.81 $ 9.72 $ 8.94
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.00 (0.04) (0.01) 0.03 0.05 0.14
=================================================================================================================================
Net gains (losses) on securities
(both realized and unrealized) (0.76) (2.42) 3.97 3.46 2.26 1.14
=================================================================================================================================
Total from investment operations (0.76) (2.46) 3.96 3.49 2.31 1.28
=================================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- (0.03) (0.01) (0.13)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.31) (1.08) (0.87) (1.21) (0.37)
=================================================================================================================================
Total distributions -- (1.31) (1.08) (0.90) (1.22) (0.50)
=================================================================================================================================
Net asset value, end of period $ 11.75 $ 12.51 $ 16.28 $ 13.40 $ 10.81 $ 9.72
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (6.08)% (14.95)% 29.95% 32.76% 23.95% 14.52%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $10,045,220 $11,223,504 $12,640,073 $8,823,094 $6,745,253 $5,100,061
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 1.05%(d) 1.00% 1.00% 1.00% 1.04% 1.11%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.10%(d) 1.04% 1.02% 1.02% 1.06% 1.13%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of net investment income (loss)
to average net assets 0.01%(d) (0.11)% (0.09)% 0.26% 0.57% 1.65%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 23% 67% 66% 113% 137% 126%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend on November 10,
2000.
(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
$10,554,134,321.
FS-188
NOTE 11-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
----------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------------------
2001 2000(a) 1999(a)(b) 1998(b) 1997(b) 1996(a)(b)
---------------- ----------- ----------- ---------- ---------- ----------
Net asset value, beginning of period $ 11.94 $ 15.73 $ 13.08 $ 10.63 $ 9.64 $ 8.88
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.31) (0.13) (0.06) (0.02) 0.07
=================================================================================================================================
Net gains (losses) on securities
(both realized and unrealized) (0.73) (2.17) 3.86 3.38 2.22 1.13
=================================================================================================================================
Total from investment operations (0.77) (2.48) 3.73 3.32 2.20 1.20
=================================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- -- -- (0.07)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.31) (1.08) (0.87) (1.21) (0.37)
=================================================================================================================================
Total distributions -- (1.31) (1.08) (0.87) (1.21) (0.44)
=================================================================================================================================
Net asset value, end of period $ 11.17 $ 11.94 $ 15.73 $ 13.08 $ 10.63 $ 9.64
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (6.45)% (15.65)% 28.94% 31.70% 22.96% 13.57%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $10,972,772 $12,491,366 $14,338,087 $9,680,068 $6,831,796 $4,875,933
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 1.81%(d) 1.77% 1.79% 1.80% 1.85% 1.94%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.86%(d) 1.81% 1.81% 1.82% 1.87% 1.96%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of net investment income (loss)
to average net assets (0.75)%(d) (0.89)% (0.88)% (0.54)% (0.24)% 0.82%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 23% 67% 66% 113% 137% 126%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend on November 10,
2000.
(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
$11,649,108,310.
FS-189
NOTE 11-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
------------------------------------------------------------------------------
AUGUST 4, 1997
(DATE OPERATIONS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, COMMENCED) TO
JUNE 30, -------------------------------------- DECEMBER 31,
2001 2000(a) 1999(a)(b) 1998(a)(b) 1997(b)
---------------- ---------- ---------- ---------- ----------------
Net asset value, beginning of period $ 11.95 $ 15.74 $ 13.09 $ 10.63 $ 11.86
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.31) (0.13) (0.06) --
=================================================================================================================================
Net gains (losses) on securities (both realized
and unrealized) (0.73) (2.17) 3.86 3.39 (0.02)
=================================================================================================================================
Total from investment operations (0.77) (2.48) 3.73 3.33 (0.02)
=================================================================================================================================
Less distributions from net realized gains -- (1.31) (1.08) (0.87) (1.21)
=================================================================================================================================
Net asset value, end of period $ 11.18 $ 11.95 $ 15.74 $ 13.09 $ 10.63
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) (6.44)% (15.62)% 28.92% 31.72% (0.08)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,126,383 $1,262,192 $860,859 $212,095 $ 32,900
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.81%(d) 1.77% 1.79% 1.80% 1.84%(e)
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.86%(d) 1.81% 1.81% 1.82% 1.86%(e)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of net investment loss to average net
assets (0.75)%(d) (0.88)% (0.88)% (0.54)% (0.23)%(e)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 23% 67% 66% 113% 137%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend on November 10,
2000.
(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
$1,191,282,292.
(e) Annualized.
FS-190
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-74.62%
ADVERTISING-2.59%
Interpublic Group of Companies, Inc. (The) 39,000 $ 1,144,650
-------------------------------------------------------------------------
Omnicom Group Inc. 44,400 3,818,400
=========================================================================
4,963,050
=========================================================================
AIRLINES-0.64%
Continental Airlines, Inc.-Class B(a) 25,000 1,231,250
=========================================================================
APPAREL RETAIL-0.54%
Abercrombie & Fitch Co.-Class A(a) 23,000 1,023,500
=========================================================================
APPLICATION SOFTWARE-2.91%
BEA Systems, Inc.(a) 29,400 902,874
-------------------------------------------------------------------------
Cadence Design Systems, Inc.(a) 60,000 1,117,800
-------------------------------------------------------------------------
PeopleSoft, Inc.(a) 72,000 3,544,560
=========================================================================
5,565,234
=========================================================================
BANKS-1.81%
Bank of New York Co., Inc. (The) 72,000 3,456,000
=========================================================================
BROADCASTING & CABLE TV-6.01%
Charter Communications, Inc.-Class A(a) 331,000 7,728,850
-------------------------------------------------------------------------
Comcast Corp.-Class A(a) 49,000 2,126,600
-------------------------------------------------------------------------
General Motors Corp.-Class H(a) 34,500 698,625
-------------------------------------------------------------------------
Univision Communications Inc.-Class A(a) 22,000 941,160
=========================================================================
11,495,235
=========================================================================
COMPUTER & ELECTRONICS RETAIL-0.73%
Best Buy Co., Inc.(a) 22,000 1,397,440
=========================================================================
COMPUTER STORAGE & PERIPHERALS-0.36%
EMC Corp.(a) 24,000 697,200
=========================================================================
CONSTRUCTION & ENGINEERING-0.99%
Jacobs Engineering Group Inc.(a) 29,000 1,891,670
=========================================================================
CONSUMER FINANCE-1.58%
Capital One Financial Corp. 23,000 1,380,000
-------------------------------------------------------------------------
Providian Financial Corp. 27,700 1,639,840
=========================================================================
3,019,840
=========================================================================
DATA PROCESSING SERVICES-7.21%
Automatic Data Processing, Inc. 30,400 1,510,880
-------------------------------------------------------------------------
BISYS Group, Inc. (The)(a) 81,000 4,779,000
-------------------------------------------------------------------------
Concord EFS, Inc.(a) 77,200 4,015,172
-------------------------------------------------------------------------
First Data Corp. 54,100 3,475,925
=========================================================================
13,780,977
=========================================================================
DIVERSIFIED FINANCIAL SERVICES-8.24%
Ambac Financial Group, Inc. 41,000 2,386,200
-------------------------------------------------------------------------
Citigroup Inc. 70,500 3,725,220
-------------------------------------------------------------------------
J.P. Morgan Chase & Co. 17,490 780,054
-------------------------------------------------------------------------
Lehman Brothers Holdings Inc. 43,000 3,343,250
-------------------------------------------------------------------------
|
MARKET
SHARES VALUE
DIVERSIFIED FINANCIAL SERVICES-(CONTINUED)
Morgan Stanley Dean Witter & Co. 35,000 $ 2,248,050
-------------------------------------------------------------------------
State Street Corp. 18,000 890,820
-------------------------------------------------------------------------
Waddell & Reed Financial, Inc.-Class A 75,000 2,381,250
=========================================================================
15,754,844
=========================================================================
ELECTRIC UTILITIES-4.56%
AES Corp. (The)(a) 60,000 2,583,000
-------------------------------------------------------------------------
Calpine Corp.(a) 53,000 2,003,400
-------------------------------------------------------------------------
Duke Energy Corp. 65,000 2,535,650
-------------------------------------------------------------------------
Reliant Resources, Inc.(a) 64,900 1,603,030
=========================================================================
8,725,080
=========================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-1.64%
Symbol Technologies, Inc. 76,000 1,687,200
-------------------------------------------------------------------------
Waters Corp.(a) 52,600 1,452,286
=========================================================================
3,139,486
=========================================================================
GENERAL MERCHANDISE STORES-2.94%
BJ's Wholesale Club, Inc.(a) 27,000 1,438,020
-------------------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 76,000 2,115,840
-------------------------------------------------------------------------
Target Corp. 60,000 2,076,000
=========================================================================
5,629,860
=========================================================================
HEALTH CARE DISTRIBUTORS & SERVICES-1.80%
Quest Diagnostics Inc.(a) 46,000 3,443,100
=========================================================================
HEALTH CARE EQUIPMENT-1.74%
Baxter International Inc. 68,000 3,332,000
=========================================================================
HEALTH CARE FACILITIES-3.81%
HCA Inc. 75,000 3,389,250
-------------------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 88,000 3,896,640
=========================================================================
7,285,890
=========================================================================
HEAVY ELECTRICAL EQUIPMENT-0.75%
Capstone Turbine Corp.(a) 65,000 1,435,850
=========================================================================
INDUSTRIAL CONGLOMERATES-1.80%
General Electric Co. 70,800 3,451,500
=========================================================================
INTERNET SOFTWARE & SERVICES-0.44%
Openwave Systems Inc.(a) 24,000 832,800
=========================================================================
LIFE & HEALTH INSURANCE-1.60%
AFLAC, Inc. 97,000 3,054,530
=========================================================================
MANAGED HEALTH CARE-2.58%
CIGNA Corp. 17,000 1,628,940
-------------------------------------------------------------------------
Wellpoint Health Networks Inc.(a) 35,000 3,298,400
=========================================================================
4,927,340
=========================================================================
MULTI-UTILITIES-2.74%
Dynegy Inc.-Class A 42,000 1,953,000
-------------------------------------------------------------------------
|
FS-191
MARKET
SHARES VALUE
MULTI-UTILITIES-(CONTINUED)
Enron Corp. 67,000 $ 3,283,000
=========================================================================
5,236,000
=========================================================================
OIL & GAS DRILLING-1.56%
ENSCO International Inc. 74,000 1,731,600
-------------------------------------------------------------------------
Transocean Sedco Forex Inc. 30,400 1,254,000
=========================================================================
2,985,600
=========================================================================
OIL & GAS EQUIPMENT & SERVICES-1.19%
Weatherford International, Inc.(a) 47,500 2,280,000
=========================================================================
OIL & GAS EXPLORATION & PRODUCTION-0.45%
Anadarko Petroleum Corp. 16,000 864,480
=========================================================================
PHARMACEUTICALS-4.32%
Allergan, Inc. 28,800 2,462,400
-------------------------------------------------------------------------
IVAX Corp.(a) 31,250 1,218,750
-------------------------------------------------------------------------
Pfizer Inc. 114,300 4,577,715
=========================================================================
8,258,865
=========================================================================
SEMICONDUCTORS-1.18%
Microchip Technology Inc.(a) 67,700 2,263,211
=========================================================================
STEEL-1.38%
Shaw Group Inc. (The)(a) 66,000 2,646,600
=========================================================================
SYSTEMS SOFTWARE-0.89%
VERITAS Software Corp.(a) 25,500 1,696,515
=========================================================================
TELECOMMUNICATIONS EQUIPMENT-1.48%
Comverse Technology, Inc.(a) 19,500 1,123,590
-------------------------------------------------------------------------
Scientific-Atlanta, Inc. 42,000 1,705,200
=========================================================================
2,828,790
=========================================================================
WIRELESS TELECOMMUNICATION SERVICES-2.16%
Nextel Communications, Inc.-Class A(a) 61,000 1,067,500
-------------------------------------------------------------------------
Nextel Partners, Inc.-Class A(a) 197,600 3,066,752
=========================================================================
4,134,252
=========================================================================
Total Domestic Common Stocks (Cost
$141,021,294) 142,727,989
=========================================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-14.35%
BERMUDA-5.67%
ACE Ltd. (Property & Casualty Insurance) 62,500 2,443,125
-------------------------------------------------------------------------
Everest Re Group, Ltd. (Reinsurance) 43,200 3,231,360
-------------------------------------------------------------------------
Tyco International Ltd. (Industrial
Conglomerates) 95,000 5,177,500
=========================================================================
10,851,985
=========================================================================
|
MARKET
SHARES VALUE
CANADA-1.52%
Celestica Inc. (Electronic Equipment &
Instruments)(a) 56,500 $ 2,909,750
=========================================================================
FINLAND-0.45%
Nokia Oyj-ADR (Telecommunications Equipment) 39,000 859,560
=========================================================================
IRELAND-1.63%
Elan Corp. PLC-ADR (Pharmaceuticals)(a) 51,000 3,111,000
=========================================================================
ISRAEL-0.60%
Check Point Software Technologies Ltd.
(Internet Software & Services)(a) 22,600 1,142,882
=========================================================================
NETHERLANDS-1.03%
ASM Lithography Holding N.V.-New York Shares
(Semiconductor Equipment)(a) 89,000 1,980,250
=========================================================================
SINGAPORE-0.74%
Flextronics International Ltd. (Electronic
Equipment & Instruments)(a) 54,200 1,415,162
=========================================================================
UNITED KINGDOM-2.71%
Amdocs Ltd. (Application Software)(a) 60,000 3,231,000
-------------------------------------------------------------------------
Shire Pharmaceuticals Group PLC-ADR
(Pharmaceuticals)(a) 35,100 1,948,050
=========================================================================
5,179,050
=========================================================================
Total Foreign Stocks & Other Equity
Interests (Cost $28,061,380) 27,449,639
=========================================================================
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-1.04%
U.S. Treasury Bills-1.04%
3.44%, 09/20/01 (Cost $1,984,700)(b) $ 2,000,000(c) $ 1,984,840
=========================================================================
SHARES
MONEY MARKET FUNDS-10.76%
STIC Liquid Assets Portfolio(d) 10,288,291 10,288,291
-------------------------------------------------------------------------
STIC Prime Portfolio(d) 10,288,291 10,288,291
=========================================================================
Total Money Market Funds (Cost
$20,576,582) 20,576,582
=========================================================================
TOTAL INVESTMENTS-100.77% (Cost $191,643,956) 192,739,050
=========================================================================
OTHER ASSETS LESS LIABILITIES-(0.77%) (1,472,659)
=========================================================================
NET ASSETS-100.00% $191,266,391
_________________________________________________________________________
=========================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. The interest rate shown
represents the rate of discount paid or received at the time of purchase by
the Fund.
(c) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 9.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-192
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost
$191,643,956)* $192,739,050
------------------------------------------------------------
Receivables for:
Investments sold 515,509
------------------------------------------------------------
Variation margin 25,850
------------------------------------------------------------
Fund shares sold 430,455
------------------------------------------------------------
Dividends 105,684
------------------------------------------------------------
Investment for deferred compensation plan 4,761
------------------------------------------------------------
Collateral for securities loaned 17,220,095
------------------------------------------------------------
Other assets 70,067
============================================================
Total assets 211,111,471
============================================================
LIABILITIES:
Payables for:
Investments purchased 2,004,812
------------------------------------------------------------
Fund shares reacquired 325,608
------------------------------------------------------------
Deferred compensation plan 4,761
------------------------------------------------------------
Collateral upon return of securities
loaned 17,220,095
------------------------------------------------------------
Accrued distribution fees 204,871
------------------------------------------------------------
Accrued transfer agent fees 47,609
------------------------------------------------------------
Accrued operating expenses 37,324
============================================================
Total liabilities 19,845,080
============================================================
Net assets applicable to shares outstanding $191,266,391
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 73,032,077
____________________________________________________________
============================================================
Class B $ 81,288,167
____________________________________________________________
============================================================
Class C $ 36,946,147
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 8,977,412
____________________________________________________________
============================================================
Class B 10,050,501
____________________________________________________________
============================================================
Class C 4,568,207
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 8.14
------------------------------------------------------------
Offering price per share:
(Net asset value of $8.14 divided by
94.50%) $ 8.61
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 8.09
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 8.09
____________________________________________________________
============================================================
|
* At June 30, 2001, securities with an aggregate market value of $17,065,940, were on loan to brokers
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$1,484) $ 269,033
------------------------------------------------------------
Dividends from affiliated money market funds 594,807
------------------------------------------------------------
Interest 39,107
------------------------------------------------------------
Security lending income 3,148
============================================================
Total investment income 906,095
============================================================
EXPENSES:
Advisory fees 658,940
------------------------------------------------------------
Administrative services fees 24,795
------------------------------------------------------------
Custodian fees 23,113
------------------------------------------------------------
Distribution fees -- Class A 117,461
------------------------------------------------------------
Distribution fees -- Class B 373,118
------------------------------------------------------------
Distribution fees -- Class C 171,663
------------------------------------------------------------
Transfer agent fees -- Class A 74,018
------------------------------------------------------------
Transfer agent fees -- Class B 89,406
------------------------------------------------------------
Transfer agent fees -- Class C 41,134
------------------------------------------------------------
Trustees' fees 5,271
------------------------------------------------------------
Other 88,201
============================================================
Total expenses 1,667,120
============================================================
Less: Fees waived (40,715)
------------------------------------------------------------
Expenses paid indirectly (5,189)
============================================================
Net expenses 1,621,216
============================================================
Net investment income (loss) (715,121)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FUTURES CONTRACTS
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (17,354,793)
------------------------------------------------------------
Futures contracts (278,010)
------------------------------------------------------------
Option contracts written 128,996
============================================================
(17,503,807)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 7,040,948
------------------------------------------------------------
Futures contracts (181,345)
============================================================
6,859,603
============================================================
Net gain (loss) from investment securities,
futures contracts and option contracts: (10,644,204)
============================================================
Net increase (decrease) in net assets
resulting from operations $(11,359,325)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-193
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the period August 31, 2000
(date operations commenced) to December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
------------ ------------
OPERATIONS:
Net investment income (loss) $ (715,121) $ (77,478)
------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
futures contracts and option contracts (17,503,807) (2,436,640)
------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and futures contracts 6,859,603 (6,097,963)
==========================================================================================
Net increase (decrease) in net assets resulting from
operations (11,359,325) (8,612,081)
==========================================================================================
Distributions to shareholders from net realized gains:
Class A -- (62,905)
------------------------------------------------------------------------------------------
Class B -- (71,403)
------------------------------------------------------------------------------------------
Class C -- (35,183)
------------------------------------------------------------------------------------------
Share transactions-net:
Class A 21,525,282 59,053,644
------------------------------------------------------------------------------------------
Class B 23,561,508 66,427,674
------------------------------------------------------------------------------------------
Class C 8,780,326 32,058,854
==========================================================================================
Net increase in net assets 42,507,791 148,758,600
==========================================================================================
NET ASSETS:
Beginning of period 148,758,600 --
==========================================================================================
End of period $191,266,391 $148,758,600
__________________________________________________________________________________________
==========================================================================================
NET ASSETS CONSIST OF
Shares of beneficial interest $211,395,921 $157,528,805
------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (741,899) (26,778)
------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, futures contracts and option contracts (20,149,271) (2,645,464)
------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities and futures contracts 761,640 (6,097,963)
==========================================================================================
$191,266,391 $148,758,600
__________________________________________________________________________________________
==========================================================================================
|
See Notes to Financial Statements.
FS-194
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value II Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B shares
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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. 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
FS-195
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.
F. 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.
G. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.75% of the Fund's
average daily net assets. For the six months ended June 30, 2001, AIM waived
fees of $40,715.
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 June 30, 2001, AIM was
paid $24,795 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 June 30, 2001, AFS
was paid $104,500 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
0.35% 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 June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $117,461,
$373,118 and $171,663, respectively, as compensation under the Plans.
AIM Distributors received commissions of $73,641 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $14,839 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,811
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $1,538 and reductions in custodian fees of $3,651 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $5,189.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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 6-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-196
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 June 30, 2001, securities with an aggregate value of $17,065,940 were on
loan to brokers. The loans were secured by cash collateral of $17,220,095
received by the Fund and subsequently invested in the affiliated money market
fund STIC Liquid Assets Portfolio. For the six months ended June 30, 2001, the
Fund received fees of $3,148 for securities lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2001 was
$99,363,965 and $47,141,798, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 15,918,869 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (15,051,920) ========================================================= Net unrealized appreciation of investment securities $ 866,949 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $191,872,101. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2001 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of period -- $ --
---------------------------------------------------------
Written 250 128,996
---------------------------------------------------------
Expired (250) (128,996)
=========================================================
End of period -- $ --
_________________________________________________________
=========================================================
|
NOTE 9-FUTURES CONTRACTS
On June 30, 2001, $426,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts as of June 30, 2001 were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- ------------ ---------- --------------
S&P 500 Index 22 Sep. 01/Long $6,774,350 $(333,454)
________________________________________________________________________________
================================================================================
|
NOTE 10-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the period August 31, 2000 (date operations commenced) through December 31, 2000:
JUNE 30, 2001 DECEMBER 31, 2000
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 4,710,701 $ 39,451,596 6,803,909 $ 62,419,096
----------------------------------------------------------------------------------------------------------------------
Class B 3,885,322 32,713,745 7,466,598 67,975,309
----------------------------------------------------------------------------------------------------------------------
Class C 1,659,091 13,954,969 3,674,621 33,162,044
======================================================================================================================
Issued as reinvestment of dividends:
Class A -- -- 7,039 59,975
----------------------------------------------------------------------------------------------------------------------
Class B -- -- 8,075 68,635
----------------------------------------------------------------------------------------------------------------------
Class C -- -- 3,982 33,851
======================================================================================================================
Reacquired:
Class A (2,149,972) (17,926,314) (394,265) (3,425,427)
----------------------------------------------------------------------------------------------------------------------
Class B (1,123,761) (9,152,237) (185,733) (1,616,270)
----------------------------------------------------------------------------------------------------------------------
Class C (637,699) (5,174,643) (131,788) (1,137,041)
======================================================================================================================
6,343,682 $ 53,867,116 17,252,438 $157,540,172
______________________________________________________________________________________________________________________
======================================================================================================================
|
FS-197
NOTE 11-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 8.64 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.02) --
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.48) (1.35)
==================================================================================================
Total from investment operations (0.50) (1.35)
==================================================================================================
Less distributions from net realized gains -- (0.01)
==================================================================================================
Net asset value, end of period $ 8.14 $ 8.64
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (5.79)% (13.49)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $73,032 $ 55,409
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.43%(c) 1.40%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 1.48%(c) 2.00%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (0.40)%(c) 0.10%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 31% 13%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $67,677,053.
(d) Annualized.
CLASS B
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 8.61 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.02)
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.48) (1.36)
==================================================================================================
Total from investment operations (0.52) (1.38)
==================================================================================================
Less distributions from net realized gains -- (0.01)
==================================================================================================
Net asset value, end of period $ 8.09 $ 8.61
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (6.04)% (13.79)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $81,288 $62,792
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.10%(c) 2.10%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 2.15%(c) 2.70%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.07)%(c) (0.60)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 31% 13%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $75,241,967.
(d) Annualized.
FS-198
NOTE 11-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
------------------------------------
AUGUST 31, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000(a)
---------------- ----------------
Net asset value, beginning of period $ 8.62 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.02)
--------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.49) (1.35)
==================================================================================================
Total from investment operations (0.53) (1.37)
==================================================================================================
Less distributions from net realized gains -- (0.01)
==================================================================================================
Net asset value, end of period $ 8.09 $ 8.62
__________________________________________________________________________________________________
==================================================================================================
Total return(b) (6.15)% (13.69)%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $36,946 $ 30,557
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.10%(c) 2.10%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 2.15%(c) 2.70%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.07)%(c) (0.60)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 31% 13%
__________________________________________________________________________________________________
==================================================================================================
|
(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 $34,617,188.
(d) Annualized.
FS-199
SCHEDULE OF INVESTMENTS
June 30, 2001
(Unaudited)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-63.16%
BANKS-0.94%
Bank of New York Co., Inc. (The) 1,700 $ 81,600
===================================================================
BROADCASTING & CABLE TV-3.85%
Comcast Corp.-Class A(a) 4,000 173,600
-------------------------------------------------------------------
EchoStar Communications Corp.-Class A(a) 5,000 162,100
===================================================================
335,700
===================================================================
CONSTRUCTION & ENGINEERING-5.88%
Granite Construction Inc. 4,000 101,680
-------------------------------------------------------------------
Jacobs Engineering Group Inc.(a) 6,300 410,949
===================================================================
512,629
===================================================================
DATA PROCESSING SERVICES-3.26%
Concord EFS, Inc.(a) 3,000 156,030
-------------------------------------------------------------------
First Data Corp. 2,000 128,500
===================================================================
284,530
===================================================================
DIVERSIFIED COMMERCIAL SERVICES-1.48%
H&R Block, Inc. 2,000 129,100
===================================================================
DIVERSIFIED FINANCIAL SERVICES-5.99%
Citigroup Inc. 4,000 211,360
-------------------------------------------------------------------
Freddie Mac 1,500 105,000
-------------------------------------------------------------------
Gabelli Asset Management Inc.-Class A(a) 5,000 205,750
===================================================================
522,110
===================================================================
ELECTRIC UTILITIES-9.98%
Calpine Corp.(a) 3,000 113,400
-------------------------------------------------------------------
Duke Energy Corp. 5,000 195,050
-------------------------------------------------------------------
Exelon Corp. 2,000 128,240
-------------------------------------------------------------------
Mirant Corp.(a) 12,600 433,440
===================================================================
870,130
===================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS-3.62%
Agilent Technologies, Inc.(a) 7,000 227,500
-------------------------------------------------------------------
Thermo Electron Corp.(a) 4,000 88,080
===================================================================
315,580
===================================================================
FOOTWEAR-1.36%
Timberland Co. (The)-Class A(a) 3,000 118,530
===================================================================
GAS UTILITIES-1.20%
El Paso Corp. 2,000 105,080
===================================================================
HEALTH CARE DISTRIBUTORS & SERVICES-2.18%
Cardinal Health, Inc. 1,200 82,800
-------------------------------------------------------------------
Laboratory Corp. of America Holdings(a) 1,400 107,660
===================================================================
190,460
===================================================================
|
MARKET
SHARES VALUE
INSURANCE BROKERS-1.22%
Willis Group Holdings Ltd.(a) 6,000 $ 106,500
===================================================================
INTEGRATED OIL & GAS-3.99%
Conoco Inc.-Class B 6,000 173,400
-------------------------------------------------------------------
Exxon Mobil Corp. 2,000 174,700
===================================================================
348,100
===================================================================
LIFE & HEALTH INSURANCE-1.37%
AFLAC, Inc. 3,800 119,662
===================================================================
MANAGED HEALTH CARE-3.54%
UnitedHealth Group Inc. 5,000 308,750
===================================================================
OIL & GAS EQUIPMENT & SERVICES-1.99%
Tidewater Inc. 4,600 173,420
===================================================================
PHARMACEUTICALS-7.63%
Abbott Laboratories 2,000 96,020
-------------------------------------------------------------------
Allergan, Inc. 2,000 171,000
-------------------------------------------------------------------
Barr Laboratories, Inc.(a) 2,500 176,025
-------------------------------------------------------------------
Johnson & Johnson 3,400 170,000
-------------------------------------------------------------------
Pfizer Inc. 1,300 52,065
===================================================================
665,110
===================================================================
STEEL-3.68%
Shaw Group Inc. (The)(a) 8,000 320,800
===================================================================
Total Domestic Common Stocks (Cost
$5,483,152) 5,507,791
===================================================================
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-25.45%
BERMUDA-3.43%
Everest Re Group, Ltd. (Reinsurance) 4,000 299,200
===================================================================
BRAZIL-1.03%
Embraer-Empresa Brasileira de Aeronautica
S.A.-ADR (Aerospace & Defense) 2,300 89,815
===================================================================
CANADA-1.20%
Biovail Corp. (Pharmaceuticals)(a) 2,400 104,400
===================================================================
DENMARK-1.00%
Vestas Wind Systems A.S. (Heavy Electrical
Equipment) 1,874 87,472
===================================================================
FRANCE-6.23%
Aventis S.A. (Pharmaceuticals) 1,700 135,879
-------------------------------------------------------------------
Coflexip S.A. (Oil & Gas Equipment &
Services)(b) 400 60,315
-------------------------------------------------------------------
Coflexip S.A.-ADR (Oil & Gas Equipment &
Services)(b) 2,000 150,140
-------------------------------------------------------------------
|
FS-200
MARKET
SHARES VALUE
FRANCE-(CONTINUED)
Sanofi-Synthelabo S.A. (Pharmaceuticals) 3,000 $ 197,067
===================================================================
543,401
===================================================================
GERMANY-1.57%
Altana A.G. (Pharmaceuticals) 3,600 137,006
===================================================================
IRELAND-3.98%
Elan Corp. PLC-ADR (Pharmaceuticals)(a) 2,000 122,000
-------------------------------------------------------------------
Ryanair Holdings PLC (Airlines)(a) 21,700 225,313
===================================================================
347,313
===================================================================
ITALY-0.54%
Riunione Adriatica di Sicurta S.p.A
(Multi-Line Insurance) 3,800 46,767
===================================================================
SPAIN-1.32%
NH Hoteles, S.A. (Hotels) 9,703 114,893
===================================================================
|
MARKET
SHARES VALUE
UNITED KINGDOM-5.15%
ARM Holdings PLC (Semiconductors)(a) 20,000 $ 75,626
-------------------------------------------------------------------
BP PLC-ADR (Integrated Oil & Gas) 5,500 274,175
-------------------------------------------------------------------
Smith & Nephew PLC (Health Care Supplies) 19,000 98,736
===================================================================
448,537
===================================================================
Total Foreign Stocks & Other Equity
Interests (Cost $2,122,119) 2,218,804
===================================================================
MONEY MARKET FUNDS-10.75%
STIC Liquid Assets Portfolio(c) 468,617 468,617
-------------------------------------------------------------------
STIC Prime Portfolio(c) 468,617 468,617
===================================================================
Total Money Market Funds (Cost $937,234) 937,234
===================================================================
TOTAL INVESTMENTS-99.36% (Cost $8,542,505) 8,663,829
===================================================================
OTHER ASSETS LESS LIABILITIES-0.64% 56,069
===================================================================
NET ASSETS-100.00% $8,719,898
___________________________________________________________________
===================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Security fair valued in accordance with the procedures established by the
Board of Trustees.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-201
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2001
(Unaudited)
ASSETS:
Investments, at market value (cost $8,542,505) $8,663,829
------------------------------------------------------------
Foreign currencies, at value (cost $622) 612
------------------------------------------------------------
Receivables for:
Fund shares sold 13,647
------------------------------------------------------------
Dividends 3,100
------------------------------------------------------------
Due from advisor 18,251
------------------------------------------------------------
Investment for deferred compensation plan 1,537
------------------------------------------------------------
Other assets 51,574
============================================================
Total assets 8,752,550
============================================================
LIABILITIES:
Payables for:
Fund shares reacquired 2,538
------------------------------------------------------------
Foreign currency contracts outstanding 3,126
------------------------------------------------------------
Deferred compensation plan 1,537
------------------------------------------------------------
Accrued distribution fees 7,812
------------------------------------------------------------
Accrued transfer agent fees 1,425
------------------------------------------------------------
Accrued operating expenses 16,214
============================================================
Total liabilities 32,652
============================================================
Net assets applicable to shares outstanding $8,719,898
____________________________________________________________
============================================================
NET ASSETS:
Class A $6,833,854
____________________________________________________________
============================================================
Class B $ 977,927
____________________________________________________________
============================================================
Class C $ 908,117
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 723,331
____________________________________________________________
============================================================
Class B 103,831
____________________________________________________________
============================================================
Class C 96,324
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 9.45
------------------------------------------------------------
Offering price per share:
(Net asset value of $9.45 divided by
94.50%) $ 10.00
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 9.42
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 9.43
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2001
(Unaudited)
INVESTMENT INCOME:
Interest $ 42,057
-----------------------------------------------------------
Dividends (net of foreign withholding tax of
$2,972) 29,135
-----------------------------------------------------------
Dividends from affiliated money market funds 1,252
===========================================================
Total investment income 72,444
===========================================================
EXPENSES:
Advisory fees 28,332
-----------------------------------------------------------
Administrative services fees 24,795
-----------------------------------------------------------
Custodian fees 7,927
-----------------------------------------------------------
Distribution fees -- Class A 9,546
-----------------------------------------------------------
Distribution fees -- Class B 2,862
-----------------------------------------------------------
Distribution fees -- Class C 3,499
-----------------------------------------------------------
Transfer agent fees -- Class A 4,173
-----------------------------------------------------------
Transfer agent fees -- Class B 479
-----------------------------------------------------------
Transfer agent fees -- Class C 585
-----------------------------------------------------------
Trustees' fees 4,465
-----------------------------------------------------------
Registration and filing fees 43,001
-----------------------------------------------------------
Printing 11,910
-----------------------------------------------------------
Professional fees 31,110
-----------------------------------------------------------
Other 3,746
===========================================================
Total expenses 176,430
===========================================================
Less: Fees waived and expenses reimbursed (112,034)
-----------------------------------------------------------
Expenses paid indirectly (54)
===========================================================
Net expenses 64,342
===========================================================
Net investment income 8,102
===========================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FOREIGN CURRENCY CONTRACTS, FUTURES
CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (599,533)
-----------------------------------------------------------
Foreign currencies (2,178)
-----------------------------------------------------------
Futures contracts 26,574
-----------------------------------------------------------
Option contracts written 15,020
===========================================================
(560,117)
===========================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 121,324
-----------------------------------------------------------
Foreign currencies (25)
-----------------------------------------------------------
Foreign currency contracts (3,126)
===========================================================
118,173
===========================================================
Net gain (loss) from investment securities,
foreign currencies, foreign currency
contracts, futures contracts and option
contracts (441,944)
===========================================================
Net increase (decrease) in net assets
resulting from operations $(433,842)
___________________________________________________________
===========================================================
|
See Notes to Financial Statements.
FS-202
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2001 and the period December 29, 2000 (date
operations commenced) to December 31, 2000
(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
---------- ------------
OPERATIONS:
Net investment income $ 8,102 $ 321
---------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, futures contracts and option
contracts (560,117) --
---------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and foreign currency
contracts 118,173 --
=======================================================================================
Net increase (decrease) in net assets resulting from
operations (433,842) 321
=======================================================================================
Share transactions-net:
Class A 6,087,338 1,109,445
---------------------------------------------------------------------------------------
Class B 1,005,297 10
---------------------------------------------------------------------------------------
Class C 951,319 10
=======================================================================================
Net increase in net assets 7,610,112 1,109,786
=======================================================================================
NET ASSETS:
Beginning of period 1,109,786 --
=======================================================================================
End of period $8,719,898 $1,109,786
_______________________________________________________________________________________
=======================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $9,150,419 $1,106,465
---------------------------------------------------------------------------------------
Undistributed net investment income 11,423 3,321
---------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, futures contracts and
option contracts (560,117) 0
---------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and foreign currency contracts 118,173 0
=======================================================================================
$8,719,898 $1,109,786
_______________________________________________________________________________________
=======================================================================================
|
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Worldwide Spectrum Fund (the "Fund") is a series portfolio of AIM Funds
Group (the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of ten separate 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. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve 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
FS-203
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.
Outstanding foreign currency contracts at June 30, 2001 were as follows:
CONTRACT TO UNREALIZED
SETTLEMENT ---------------------- APPRECIATION
DATE CURRENCY DELIVER RECEIVE VALUE (DEPRECIATION)
---------- -------- --------- ---------- ---------- --------------
09/06/01 BRL 180,000 $ 73,590 $ 76,176 $(2,586)
----------------------------------------------------------------------------
09/04/01 DKK 635,000 71,934 72,141 (207)
----------------------------------------------------------------------------
09/04/01 EUR 1,100,000 928,400 931,260 (2,860)
----------------------------------------------------------------------------
09/04/01 GBP 260,000 367,757 365,230 2,527
============================================================================
$1,441,681 $1,444,807 $(3,126)
___________________________________________________________________________
============================================================================
|
G. 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.
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
FS-204
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. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged to those classes' operations. All other expenses which are attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.85% of the first $1
billion of the Fund's average daily net assets, plus 0.80% of the Fund's average
daily net assets in excess of $1 billion. For the six months ended June 30,
2001, AIM waived fees of $28,332 and reimbursed expenses of $83,702.
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 June 30, 2001, AIM was
paid $24,795 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 June 30, 2001, AFS
was paid $2,528 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
0.35% 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 June 30,
2001, the Class A, Class B and Class C shares paid AIM Distributors $9,546,
$2,862 and $3,499, respectively, as compensation under the Plans.
AIM Distributors received commissions of $7,672 from sales of the Class A
shares of the Fund during the six months ended June 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 June 30,
2001, AIM Distributors received $260 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2001, the Fund paid legal fees of $1,442
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2001, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $54 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $54.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. During the six months ended June 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 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 June 30, 2001 was
$13,453,514 and $5,248,710, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2001 is as follows:
Aggregate unrealized appreciation of investment securities $ 463,986 -------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (342,662) ======================================================== Net unrealized appreciation of investment securities $ 121,324 ________________________________________________________ ======================================================== Investments have the same cost for tax and financial statement purposes. |
FS-205
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2001 and the period December 29, 2000 (date operations commenced) through December 31, 2000 were as follows:
JUNE 30, 2001 DECEMBER 31, 2000
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
Sold:
Class A 632,546 $6,268,529 110,945 $1,109,445
------------------------------------------------------------------------------------------------------------
Class B 110,902 1,073,335 1 10
------------------------------------------------------------------------------------------------------------
Class C 117,445 1,147,173 1 10
============================================================================================================
Reacquired:
Class A (20,160) (181,191) -- --
------------------------------------------------------------------------------------------------------------
Class B (7,072) (68,038) -- --
------------------------------------------------------------------------------------------------------------
Class C (21,122) (195,854) -- --
============================================================================================================
812,539 $8,043,954 110,947 $1,109,465
____________________________________________________________________________________________________________
============================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-------------------------------------
DECEMBER 29, 2000
(DATE OPERATIONS
SIX MONTHS ENDED COMMENCED) TO
JUNE 30, DECEMBER 31,
2001(a) 2000
---------------- -----------------
Net asset value, beginning of period $10.00 $10.00
---------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 --
---------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.57) --
===================================================================================================
Total from investment operations (0.55) --
===================================================================================================
Net asset value, end of period $ 9.45 $10.00
___________________________________________________________________________________________________
===================================================================================================
Total return(b) (5.50)% 0%
___________________________________________________________________________________________________
===================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $6,834 $1,110
___________________________________________________________________________________________________
===================================================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 1.79%(c) 1.80%(d)
---------------------------------------------------------------------------------------------------
Without fee waivers and expense reimbursements 5.12%(c) 76.90%(d)
===================================================================================================
Ratio of net investment income to average net assets 0.37%(c) 3.91%(d)
___________________________________________________________________________________________________
===================================================================================================
Portfolio turnover rate 106% --
___________________________________________________________________________________________________
===================================================================================================
|
(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 $5,499,741.
(d) Annualized.
FS-206
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------
JANUARY 2, 2001
(DATE SALES
COMMENCED) TO
JUNE 30,
2001(a)
---------------
Net asset value, beginning of period $10.00
-----------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.01)
-----------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.57)
=============================================================================
Total from investment operations (0.58)
=============================================================================
Net asset value, end of period $ 9.42
_____________________________________________________________________________
=============================================================================
Total return(b) (5.80)%
_____________________________________________________________________________
=============================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 978
_____________________________________________________________________________
=============================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.45%(c)
-----------------------------------------------------------------------------
Without fee waivers and expense reimbursements 5.78%(c)
=============================================================================
Ratio of net investment income (loss) to average net assets (0.29)%(c)
_____________________________________________________________________________
=============================================================================
Portfolio turnover rate 106%
_____________________________________________________________________________
=============================================================================
|
(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 $577,173.
CLASS C
----------------
JANUARY 11, 2001
(DATE SALES
COMMENCED) TO
JUNE 30,
2001(a)
----------------
Net asset value, beginning of period $10.00
------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.01)
------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.56)
==============================================================================
Total from investment operations (0.57)
==============================================================================
Net asset value, end of period $ 9.43
______________________________________________________________________________
==============================================================================
Total return(b) (5.70)%
______________________________________________________________________________
==============================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 908
______________________________________________________________________________
==============================================================================
Ratio of expenses to average net assets:
With fee waivers and expense reimbursements 2.45%(c)
------------------------------------------------------------------------------
Without fee waivers and expense reimbursements 5.78%(c)
==============================================================================
Ratio of net investment income (loss) to average net assets (0.30)%(c)
______________________________________________________________________________
==============================================================================
Portfolio turnover rate 106%
______________________________________________________________________________
==============================================================================
|
(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 $705,685.
FS-207
PART C
OTHER INFORMATION
Item 23. Exhibits
a (1) - (a) Amended and Restated Agreement and Declaration of Trust,
dated November 5, 1998.(6)
- (b) Amendment No. 1, dated December 21, 1998, to Amended and
Restated Agreement and Declaration of Trust.(6)
- (c) Amendment No. 2, dated June 1, 2000, to Amended and
Restated Agreement and Declaration of Trust.(10)
- (d) Amendment No. 3, dated June 14, 2000, to Amended and
Restated Agreement and Declaration of Trust.(10)
- (e) Amendment No. 4, dated September 22, 2000, to Amended and
Restated Agreement and Declaration of Trust.(11)
- (f) Amendment No. 5, dated December 12, 2000, to Amended and
Restated Agreement and Declaration of Trust.(12)
- (g) Amendment No. 6, dated December 13, 2000, to Amended and
Restated Agreement and Declaration of the Trust.(13)
- (h) Amendment No. 7, dated March 14, 2001, to Amended and
Restated Agreement and Declaration of Trust.(13)
- (i) Amendment No. 8, dated June 12, 2001, to Amended and
Restated Agreement and Declaration of Trust.(14)
- (j) Amendment No. 9, dated July 13, 2001, to Amended and
Restated Agreement and Declaration of Trust.(14)
- (k) Amendment No. 10, dated September 28, 2001, to Amended
and Restated Agreement and Declaration of Trust. (15)
b (1) - (a) Amended and Restated Bylaws, dated November 5, 1999. (6)
- (b) First Amendment, adopted June 9, 1999, to Amended and
Restated Bylaws. (8)
- (c) Amendment No. 2, adopted June 14, 2000, to Amended and
Restated Bylaws. (10)
c - Articles II, VI, VII and VIII of the Amended and Restated
Agreement and Declaration of Trust, as amended, and Articles
IV and VI of the Amended and Restated Bylaws, as amended, as
previously filed, define rights of holders of shares.(6)
d (1) - (a) Master Investment Advisory Agreement, dated June 1, 2000,
between the Registrant and A I M Advisors, Inc.(10)
- (b) Amendment No. 1, dated August 30, 2000, to the Master
Investment Advisory Agreement, dated June 1, 2000, between
Registrant and A I M Advisors, Inc.(11)
|
- (c) Amendment No. 2, dated December 27, 2000, to the Master Investment Advisory Agreement, dated June 1, 2000, between Registrant and A I M Advisors, Inc.(13)
- (d) Amendment No. 3, dated September 28, 2001, to the Master Investment Advisory Agreement, dated June 1, 2000, between Registrant and A I M Advisors, Inc. (15)
- (e) Form of Amendment No. 4, dated December __, 2001, to the Master Investment Advisory Agreement, dated June 1, 2000, between Registrant and A I M Advisors, Inc. (15)
e (1) - (a) Second Amended and Restated Master Distribution
Agreement, dated July 1, 2000, between Registrant (with
respect to its Class A Shares and Class C Shares) and A I M
Distributors, Inc. (11)
- (b) Amendment No. 1, dated as of August 30, 2000, to the
Second Amended and Restated Master Distribution Agreement
between Registrant (with respect to its Class A Shares and
Class C Shares) and A I M Distributors, Inc.(11)
- (c) Amendment No. 2, dated December 27, 2000, to the Second
Amended and Restated Master Distribution Agreement between
Registrant (with respect to its Class A Shares and Class C
Shares) and A I M Distributors, Inc.(13)
- (d) Amendment No. 3, dated September 28, 2001, to the Second
Amended and Restated Master Distribution Agreement, dated
July 1, 2000, between Registrant (with respect to its Class A
Shares and Class C Shares) and A I M Distributors, Inc. (15)
|
- (e) Form of Amendment No. 4, dated December __, 2001, to the Second Amended and Restated Master Distribution Agreement, dated July 1, 2000, between Registrant (with respect to its Class and Class C Shares) and A I M Distributors, Inc. (15)
(2) - (a) First Amended and Restated Master Distribution Agreement,
dated December 31, 2000, between Registrant (with respect to
its Class B shares) and A I M Distributors, Inc.(13)
- (b) Amendment No. 1, dated September 28, 2001, to the First
Amended and Restated Master Distribution Agreement, dated
December 31, 2000, between Registrant (with respect to its
Class B Shares) and A I M Distributors, Inc.(15)
|
- (c) Form of Amendment No. 2, dated December __, 2001, to the First Amended and restated Master Distribution Agreement, dated December 31, 2000, between Registrant (with respect to Class B Shares) and A I M Advisors, Inc. (15)
(3) - Form of Selected Dealer Agreement between A I M Distributors,
Inc. and selected dealers.(13)
(4) - Form of Bank Selling Group Agreement between A I M
Distributors, Inc. and banks.(6)
f (1) - AIM Funds Retirement Plan for Eligible
Directors/Trustees, as restated March 7, 2000.(10)
(2) - Form of Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended March 7,
2000.(10)
g (1) - (a) Master Custodian Contract, dated May 1, 2000, between the
Registrant and State Street Bank and Trust Company.(11)
- (b) Amendment, dated May 1, 2000, to the Master Custodian
Contract, dated May 1, 2000, between Registrant and State
Street Bank and Trust Company.(11)
|
(2) - (a) Subcustodian Agreement, dated September 9, 1994, among
the Registrant, Texas Commerce Bank National Association,
State Street Bank and Trust Company and A I M Fund Services,
Inc.(2)
- (b) Amendment No. 1, dated October 2, 1998 to Subcustodian
Agreement, dated September 9, 1994, among the Registrant,
Chase Bank of Texas N.A. (formerly Texas Commerce Bank),
State Street Bank and Trust Company and A I M Fund Services,
Inc.(8)
(3) - (a) Foreign Country Selection and Mandatory Securities
Depository Responsibilities Delegation Agreement, dated
September 9, 1998, between Registrant and A I M Advisors,
Inc.(6)
- (b) Amendment No. 1, dated September 28, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc.(6)
- (c) Amendment No. 2, dated as of December 14, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc.(7)
- (d) Amendment No. 3, dated as of December 22, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc.(7)
- (e) Amendment No. 4, dated as of January 26, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc.(7)
- (f) Amendment No. 5, dated as of March 1, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. (7)
- (g) Amendment No. 6, dated as of March 18, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc.(7)
- (h) Amendment No. 7, dated as of November 15, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc.(8)
h (1) - (a) Transfer Agency and Service Agreement, dated as of
November 1, 1994, between the Registrant and A I M Fund
Services, Inc.(1)
- (b) Amendment No. 1, dated August 4, 1997, to the Transfer
Agency and Service Agreement, dated as of November 1, 1994,
between Registrant and A I M Fund Services, Inc.(5)
- (c) Amendment No. 2, dated January 1, 1999, to the Transfer
Agency and Service Agreement, dated as of November 1, 1994,
between Registrant and A I M Fund Services, Inc.(8)
|
- (d) Amendment No. 3, dated July 1, 2000, to the Transfer
Agency and Service Agreement, dated as of November 1, 1994,
between Registrant and A I M Fund Services, Inc.(11)
(2) - (a) Remote Access and Related Service Agreement, dated as of
December 23, 1994, between the Registrant and First Data
Investor Services Group, Inc. (formerly, The Shareholder
Services Group, Inc.).(2)
- (b) Amendment No. 1, effective October 4, 1995, to the Remote
Access and Related Services Agreement, dated as of December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc.(2)
- (c) Addendum No. 2, effective October 12, 1995, to the Remote
Access and Related Services Agreement, dated as of December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc.(2)
- (d) Amendment No. 3, effective February 1, 1997, to the
Remote Access and Related Services Agreement, dated December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc.(4)
- (e) Amendment No. 4, dated June 30, 1998, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc.(6)
- (f) Amendment No. 5, dated July 1, 1998, to the Remote Access
and Related Services Agreement, dated December 23, 1994,
between Registrant and First Data Investor Services Group,
Inc. was filed electronically as an Exhibit to Post-Effective
Amendment No. 75 on February 12, 1999, and is hereby
incorporated by reference.(6)
- (g) Exhibit 1, effective as of August 4, 1997, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between the Registrant and First Data Investor Services
Group, Inc.(5)
- (h) Amendment No. 6, dated August 30, 1999, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc.(8)
- (i) Amendment No. 7, dated February 29, 2000, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc.(11)
- (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 Inc.
(formerly known as First Data Investor Services Group,
Inc.).(14)
- (k) Amendment No. 9, dated June 26, 2000, to the Remote
Access and Related Services Agreement for
IMPRESS--Trademark-- Services, dated December 23, 1994,
between Registrant and PFPC Inc. (14)
- (l) Amendment No. 10, dated July 28, 2000, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and PFPC Inc.(14)
(3) - Preferred Registration Technology Escrow Agreement, dated
September 10, 1997, between the Registrant and First Data
Investor Services Group, Inc.(5)
|
(4) - Shareholder Sub-Accounting Services Agreement, dated as of
October 1, 1993, between the Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group, Inc.),
Financial Data Services, Inc. and Merrill, Lynch, Pierce,
Fenner & Smith Incorporated.(2)
(5) - (a) Master Administrative Services Agreement, dated June 1,
2000, between the Registrant and A I M Advisors, Inc.(10)
- (b) Amendment No. 1, dated August 30, 2000, to the Master
Administrative Services Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc.(11)
- (c) Amendment No. 2, dated December 27, 2000, to the Master
Administrative Services Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc.(13)
- (d) Amendment No. 3, dated September 28, 2001, to the Master
Administrative Services Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc.(15)
|
- (e) Form of Amendment No. 4, dated December __, 2001, to the Master Administrative Services Agreement, dated June 1, 2000, between Registrant and A I M Advisors, Inc. (15)
(6) - Memorandum of Agreement regarding securities lending, dated
June 1, 2000, between Registrant, with respect to all Funds,
and A I M Advisors, Inc.(13)
(7) - Interfund Loan Agreement, dated September 18, 2001, between
Registrant and A I M Advisors, Inc.(15)
|
i - Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP for AIM Mid Cap Basic Value Fund.(15)
j (1) - Consent of PricewaterhouseCoopers LLP.(15)
k - Omitted Financial Statements - None.
l (1) - Initial Capitalization Agreement for AIM European Small
Company Fund, AIM International Emerging Growth Fund, AIM New
Technology Fund, AIM Small Cap Equity Fund and AIM Value II
Fund.(11)
(2) - Initial Capitalization Agreement for AIM Worldwide Spectrum
Fund.(13)
(3) - Initial Capitalization Agreement for AIM Basic Balanced
Fund.(15)
(4) - Form of Initial Capitalization Agreement for AIM Mid Cap
Basic Value Fund. (15)
m (1) - (a) Fifth Amended and Restated Master Distribution Plan,
dated July 1, 2000 for Registrant's Class A Shares and Class
C Shares.(11)
- (b) Amendment No. 1, dated as of August 30, 2000, to the
Fifth Amended and Restated Master Distribution Plan, dated
July 1, 2000 for Registrant's Class A Shares and Class C
Shares.(11)
- (c) Amendment No. 2, dated as of December 27, 2000, to the
Fifth Amended and Restated Master Distribution Plan, dated
July 1, 2000 for Registrant's Class A Shares and Class C
Shares.(13)
|
- (d) Amendment No. 3, dated September 28, 2001, to the Fifth Amended and Restated Master Distribution Plan, dated July 1, 2000 for Registrant's Class A Shares and Class C Shares.(15)
- (e) Form of Amendment No. 4, dated December __, 2001, to the Fifth Amended and Restated Master Distribution Plan, dated July 1, 2000, for Registrant's Class A and Class C Shares.
(2) - (a) Third Amended and Restated Master Distribution Plan,
dated December 31, 2000, for Registrant's Class B Shares.(13)
- (b) Amendment No. 1, dated September 28, 2001, to the Third
Amended and Restated Master Distribution Plan, dated December
31, 2000, for Registrant's Class B Shares.(15)
|
- (c) Form of Amendment No. 2, dated December __, 2001, to the Third Amended and Restated Master Distribution Plan, dated December 31, 2000, for Registrant's Class B Shares. (15)
(3) - Form of Shareholder Service Agreement to be used in connection with Registrant's Master Distribution Plan.(15)
(4) - Form of Bank Shareholder Service Agreement to be used in connection with Registrant's Master Distribution Plan.(15)
(5) - Form of Variable Group Annuity Contractholder Service
Agreement to be used in connection with Registrant's Master
Distribution Plan.(15)
|
(6) - Form of Agency Pricing Agreement to be used in connection with Registrant's Master Distribution Plan.(15)
(7) - Forms of Service Agreement for Bank Trust Departments and for
Brokers for Bank Trust Departments to be used in connection
with Registrant's Master Distribution Plan.(15)
(8) - Form of Shareholder Service Agreement for Shares of the AIM
Mutual Funds.(15)
n (1) - Third Amended and Restated Multiple Class Plan (effective
August 5, 1999).(8)
o - Reserved
p (1) - The A I M Management Group Inc. Code of Ethics, as revised
February 24, 2000.(11)
(2) - AIM Funds Code of Ethics of the Registrant, effective
September 23, 2000.(11)
----------
|
(1) Incorporated by reference to PEA No. 70, filed on November 17, 1995.
(2) Incorporated by reference to PEA No. 71, filed on April 26, 1996.
(3) Incorporated by reference to PEA No. 72, filed on April 28, 1997.
(4) Incorporated by reference to PEA No. 73, filed on July 25, 1997.
(5) Incorporated by reference to PEA No. 74, filed on February 27, 1998.
(6) Incorporated by reference to PEA No. 75, filed on February 12, 1999.
(7) Incorporated by reference to PEA No. 76, filed on April 15, 1999.
(8) Incorporated by reference to PEA No. 77, filed on March 9, 2000.
(9) Incorporated by reference to PEA No. 78, filed on March 13, 2000.
(10) Incorporated by reference to PEA No. 80, filed on June 15, 2000.
(11) Incorporated by reference to PEA No. 81, filed on September 29, 2000.
(12) Incorporated by reference to PEA No. 82, filed on December 13, 2000.
(13) Incorporated by reference to PEA No. 84, filed on April 27, 2001.
(14) Incorporated by reference to PEA No. 85, filed on July 13, 2001.
(15) Filed herewith electronically.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
The Registrant's Amended and Restated Agreement and Declaration of
Trust, dated November 5, 1998, as amended, provides, among other things
(i) that trustees shall not be liable for any act or omission or any
conduct whatsoever (except for liabilities to the Registrant or its
shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty); (ii) for the indemnification
by the Registrant of the trustees and officers to the fullest extent
permitted by the Delaware Business Trust Act and Bylaws; and (iii) that
the shareholders and former shareholders of the Registrant are held
harmless by the Registrant (or applicable portfolio or class) from
personal liability arising from their status as such, and are
indemnified by the Registrant (or applicable portfolio or class)
against all loss and expense arising from such personal liability in
accordance with the Registrant's Bylaws and applicable law.
A I M Advisors, Inc., the Registrant and other investment companies managed by A I M Advisors, Inc., 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.
Item 26. Business and Other Connections of the Investment Advisor
The only employment of a substantial nature of the Advisor's directors and officers is with the Advisor and its affiliated companies. Reference is also made to the caption "Fund Management--The Advisor" in the Prospectus which comprises Part A of the Registration Statement, and to the caption "Investment Advisory and Other Services" of the Statement of Additional Information which comprises Part B of the Registration Statement, and to Item 27(b) of this Part C.
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 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
(b)
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Fund
---------------- ---------------- ---------
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 ---------- |
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Fund
---------------- ---------------- ---------
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
----------
|
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
(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 Custodians, 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 FUNDS GROUP
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 TO EXHIBITS
AIM FUNDS GROUP
Exhibit
Number Description
------ -----------
a (1) (k) Form of Amendment No. 10, dated September __, 2001, to Amended
and Restated Agreement and Declaration of Trust.
d (1) (d) Amendment No. 3, dated September 28, 2001, to the Master
Investment Advisory Agreement, dated June 1, 2000, between
Registrant and A I M Advisors, Inc.
d (1) (e) Form of Amendment No. 4, dated December __, 2001, to the
Master Investment Advisory Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc.
e (1) (d) Amendment No. 3, dated September 28, 2001, to the Second
Amended and Restated Master Distribution Agreement, dated July
1, 2000, between Registrant (with respect to its Class A
Shares and Class C Shares) and A I M Distributors, Inc.
e (1) (e) Form of Amendment No. 4, dated December __, 2001, to the
Second Amended and Restated Master Distribution Agreement,
dated July 1, 2000, between Registrant (with respect to its
Class and Class C Shares) and A I M Distributors, Inc.
e (2) (b) Amendment No. 1, dated September 28, 2001, to the First
Amended and Restated Master Distribution Agreement, dated
December 31, 2000, between Registrant (with respect to 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, dated
December 31, 2000, between Registrant (with respect to Class B
Shares) and A I M Advisors, Inc.
h (5) (d) Amendment No. 3, dated September 28, 2001, to the Master
Administrative Services Agreement, dated June 1, 2000, between
Registrant and A I M Advisors, Inc.
h (5) (e) Form of Amendment No. 4, dated December __, 2001, to the
Master Administrative Services Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc.
h (7) Interfund Loan Agreement, dated September 18, 2001, between
Registrant and A I M Advisors, Inc.
i Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP
for AIM Mid Cap Basic Value Fund.
j (1) Consent of PricewaterhouseCoopers LLP.
l (3) Initial Capitalization Agreement for AIM Basic Balanced Fund.
l (4) Form of Initial Capitalization Agreement for AIM Mid Cap Basic
Value Fund.
m (1) (d) Amendment No. 3, dated September 28, 2001, to the Fifth
Amended and Restated Master Distribution Plan, dated July 1,
2000 for Registrant's Class A Shares and Class C Shares.
m (1) (e) Form of Amendment No. 4, dated December __, 2001, to the Fifth
Amended and Restated Master Distribution Plan, dated July 1,
2000, for Registrant's Class A and Class C Shares.
|
m (2) (b) Amendment No. 1, dated September 28, 2001, to the Third
Amended and Restated Master Distribution Plan, dated December
31, 2000, for Registrant's Class B Shares.
m (2) (c) Form of Amendment No. 2, dated December __, 2001, to the Third
Amended and Restated Master Distribution Plan, dated December
31, 2000, for Registrant's Class B Shares.
m (3) Form of Shareholder Service Agreement to be used in connection
with Registrant's Master Distribution Plan.
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 to be used in connection with Registrant's Master
Distribution Plan.
m (6) Form of Agency Pricing Agreement to be used in connection with
Registrant's Master Distribution Plan.
m (7) Forms of Service Agreement for Bank Trust Departments and for
Brokers for Bank Trust Departments to be used in connection
with Registrant's Master Distribution Plan.
m (8) Form of Shareholder Service Agreement for Shares of the AIM
Mutual Funds.
|
a(1)(k)
AMENDMENT NO. 10
TO
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
This Amendment No. 10 to the Amended and Restated Agreement and Declaration of Trust of AIM Funds Group ("Amendment") amends, effective as of September 28, 2001, the Amended and Restated Agreement and Declaration of Trust of AIM Funds Group dated as of November 5, 1998 (the "Agreement").
Whereas, under Section 9.7 of the Agreement, a duly authorized officer of the Trust may execute the Amendment.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Schedule A of the Agreement is hereby amended and restated to read in its entirety as set forth on Exhibit 1 to this Amendment.
2. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by the Amendment and all prior amendments thereto.
3. Except as specifically provided for by this Amendment, the Agreement (including all prior amendments) is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Trust, has executed this Amendment as of September 28, 2001.
/s/ ROBERT H. GRAHAM -------------------------------- Name: Robert H. Graham Title: President |
EXHIBIT 1 TO AMENDMENT NO. 10
TO
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
"SCHEDULE A
AIM FUNDS GROUP
PORTFOLIOS AND CLASSES THEREOF
AIM Balanced Fund AIM New Technology Fund
----------------- -----------------------
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
Institutional Class Shares
AIM Select Equity Fund
AIM Basic Balanced Fund ----------------------
-----------------------
Class A Shares
Class A Shares Class B Shares
Class B Shares Class C Shares
Class C Shares
AIM Small Cap Equity Fund
AIM European Small Company Fund -------------------------
-------------------------------
Class A Shares
Class A Shares Class B Shares
Class B Shares Class C Shares
Class C Shares
AIM Value Fund
AIM Global Utilities Fund --------------
-------------------------
Class A Shares
Class A Shares Class B Shares
Class B Shares Class C Shares
Class C Shares Institutional Class Shares
AIM International Emerging Growth Fund AIM Value II Fund
-------------------------------------- -----------------
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
AIM Mid Cap Basic Value Fund AIM Worldwide Spectrum Fund
---------------------------- ---------------------------
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares"
|
d(1)(d)
AMENDMENT NO. 3
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of September 28, 2001, amends the Master Investment Advisory Agreement (the "Agreement"), dated June 1, 2000, between AIM Funds Group, 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 a new portfolio, the AIM Basic Balanced 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 Balanced Fund June 1, 2000 AIM Basic Balanced Fund September 28, 2001 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000 AIM Worldwide Spectrum Fund December 27, 2000 |
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 BALANCED FUND
NET ASSETS ANNUAL RATE
First $150 million................................................. 0.75%
Over $150 million.................................................. 0.50%
AIM BASIC BALANCED FUND
NET ASSETS ANNUAL RATE
First $1 billion................................................... 0.65%
Next $4 billion.................................................... 0.60%
Over $5 billion.................................................... 0.55%
AIM GLOBAL UTILITIES FUND
NET ASSETS ANNUAL RATE
First $200 million................................................. 0.60%
Next $300 million.................................................. 0.50%
Next $500 million.................................................. 0.40%
Over $1 billion.................................................... 0.30%
AIM SELECT GROWTH FUND
NET ASSETS ANNUAL RATE
First $150 million................................................. 0.80%
Over $150 million.................................................. 0.625%
|
AIM VALUE FUND
NET ASSETS ANNUAL RATE
First $150 million................................................. 0.80%
Over $150 million.................................................. 0.625%
AIM EUROPEAN SMALL COMPANY FUND
AIM INTERNATIONAL EMERGING GROWTH FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 0.95%
AIM NEW TECHNOLOGY FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 1.00%
AIM SMALL CAP EQUITY FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 0.85%
AIM VALUE II FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 0.75%
AIM WORLDWIDE SPECTRUM FUND
NET ASSETS ANNUAL RATE
First $1 billion................................................... 0.85%
Over $1 billion.................................................... 0.80%"
|
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 FUNDS GROUP
Attest: /s/ JOHN H. LIVELY By: /s/ ROBERT H. GRAHAM
--------------------------------- ----------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
A I M ADVISORS, INC.
Attest: /s/ JOHN H. LIVELY By: /s/ ROBERT H. GRAHAM
--------------------------------- ----------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
d(1)(e)
AMENDMENT NO. 4
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of December ___, 2001, amends the Master Investment Advisory Agreement (the "Agreement"), dated June 1, 2000, between AIM Funds Group, 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 a new portfolio, the AIM Mid Cap Basic Value 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 Balanced Fund June 1, 2000 AIM Basic Balanced Fund September 28, 2001 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM Mid Cap Basic Value Fund December __, 2001 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000 AIM Worldwide Spectrum Fund December 27, 2000 |
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 BALANCED FUND
NET ASSETS ANNUAL RATE
First $150 million................................................. 0.75%
Over $150 million.................................................. 0.50%
AIM BASIC BALANCED FUND
NET ASSETS ANNUAL RATE
First $1 billion................................................... 0.65%
Next $4 billion.................................................... 0.60%
Over $5 billion.................................................... 0.55%
AIM GLOBAL UTILITIES FUND
NET ASSETS ANNUAL RATE
First $200 million................................................. 0.60%
Next $300 million.................................................. 0.50%
Next $500 million.................................................. 0.40%
Over $1 billion.................................................... 0.30%
AIM SELECT GROWTH FUND
NET ASSETS ANNUAL RATE
First $150 million................................................. 0.80%
Over $150 million.................................................. 0.625%
|
AIM VALUE FUND
NET ASSETS ANNUAL RATE
First $150 million................................................. 0.80%
Over $150 million.................................................. 0.625%
AIM EUROPEAN SMALL COMPANY FUND
AIM INTERNATIONAL EMERGING GROWTH FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 0.95%
AIM MID CAP BASIC VALUE FUND
NET ASSETS ANNUAL RATE
[First $1 billion.................................................. 80%
Next $4 billion.................................................... 75%
Over $5 billion.................................................... 70%]
AIM NEW TECHNOLOGY FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 1.00%
AIM SMALL CAP EQUITY FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 0.85%
AIM VALUE II FUND
NET ASSETS ANNUAL RATE
All Assets......................................................... 0.75%
AIM WORLDWIDE SPECTRUM FUND
NET ASSETS ANNUAL RATE
First $1 billion................................................... 0.85%
Over $1 billion.................................................... 0.80%"
|
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 FUNDS GROUP
Attest: By:
-------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
A I M ADVISORS, INC.
Attest: By:
-------------------------------- -------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
e(1)(d)
AMENDMENT NO. 3
TO THE SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(APPLICABLE TO CLASS A AND CLASS C SHARES)
The Second Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000, by and between AIM Funds Group, 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 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 Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund
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 Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 28, 2001
AIM FUNDS GROUP
Attest: /s/ RENEE A. FRIEDLI By: /s/ Robert H. Graham
-------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
|
A I M DISTRIBUTORS, INC.
Attest: /S/ LISA A. MOSS By: /s/ MICHAEL J. CEMO
-------------------------------- --------------------------------
Assistant Secretary Michael J. Cemo
President
|
e(1)(e)
AMENDMENT NO. 4
TO THE SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(APPLICABLE TO CLASS A AND CLASS C SHARES)
The Second Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000, by and between AIM Funds Group, 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 FUNDS GROUP
CLASS A SHARES
AIM Balanced Fund
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM Mid Cap Basic Value Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund
CLASS C SHARES
AIM Balanced Fund
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM Mid Cap Basic Value Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December ____, 2001
AIM FUNDS GROUP
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 Funds Group, 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 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 Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund AIM Value II Fund
AIM Worldwide Spectrum Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 28, 2001
AIM FUNDS GROUP
Attest: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
-------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
|
A I M DISTRIBUTORS, INC.
Attest: /s/ LISA A. MOSS 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 Funds Group, 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 FUNDS GROUP
CLASS B SHARES
AIM Balanced Fund
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM Mid Cap Basic Value Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Worldwide Spectrum Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December ______, 2001
AIM FUNDS GROUP
Attest: By:
--------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
A I M DISTRIBUTORS, INC.
Attest: By:
--------------------------- -----------------------------
Assistant Secretary Michael J. Cemo
President
|
h(5)(d)
AMENDMENT NO. 3
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated June 1, 2000, by and between A I M Advisors, Inc., a Delaware corporation, and AIM Funds Group, 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 FUNDS GROUP
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Balanced Fund June 1, 2000 AIM Basic Balanced Fund September 28, 2001 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000 AIM Worldwide Spectrum Fund December 27, 2000" |
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 28, 2001
A I M ADVISORS, INC.
Attest: /s/ JOHN H. LIVELY By: /s/ ROBERT H. GRAHAM
-------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
AIM FUNDS GROUP
Attest: /s/ JOHN H. LIVELY By: /s/ ROBERT H. GRAHAM
-------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
h(5)(e)
AMENDMENT NO. 4
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated June 1, 2000, by and between A I M Advisors, Inc., a Delaware corporation, and AIM Funds Group, 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 FUNDS GROUP
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Balanced Fund June 1, 2000 AIM Basic Balanced Fund September 28 2001 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM Mid Cap Basic Value Fund December __, 2001 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000 AIM Worldwide Spectrum Fund December 27, 2000" |
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 FUNDS GROUP
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
EXHIBIT h(7)
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 10, 2001
AIM Funds Group
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Re: AIM Funds Group Registration Statement on Form N-1A
Gentlemen:
We have acted as counsel to AIM Funds Group, 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. 86 to the Registration Statement on Form N-1A under the Securities Act of 1933, as amended, and Amendment No. 86 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 Mid Cap Basic Value Fund (the "Fund").
In connection with our giving this opinion, we have examined copies of the Trust's Certificate of Trust, Amended and Restated 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.
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.
AIM Funds Group
October 10, 2001
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 "Investment Advisory and Other Services - Other Service Providers - Counsel to the Trust" 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 February 19, 2001, relating to the financial statements and financial highlights of AIM Funds Group, which appear in such Registration Statement. We also consent to the references to us under the headings "Financial Statements" and "Investment Advisory and Other Services " in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts October 12, 2001 |
1(3)
[AIM LOGO APPEARS HERE]
--Registered Trademark--
11 Greenway Plaza, Suite 1000
Houston, TX 77046-1173
713-626-1919
A I M Advisors, Inc.
September 27, 2001
Board of Trustees
AIM Funds Group
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Re: Initial Capital Investment in New Portfolio of AIM Funds Group (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 Basic Balanced Fund - Class A Shares $1,000,000 September 27, 2001
AIM Basic Balanced Fund - Class B Shares $1,000,000 September 27, 2001
AIM Basic Balanced Fund - Class C Shares $1,000,000 September 27, 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
1(4)
Board of Trustees
AIM Funds Group
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 Funds Group (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 Mid Cap Basic Value Fund - Class A Shares $ 10.00 December 27, 2001
AIM Mid Cap Basic Value Fund - Class B Shares $ 10.00 December 27, 2001
AIM Mid Cap Basic Value Fund - Class C Shares $ 10.00 December 27, 2001
AIM Mid Cap Basic Value Fund - Class A Shares [$ ] December 28, 2001
AIM Mid Cap Basic Value Fund - Class B Shares [$ ] December 28, 2001
AIM Mid Cap Basic Value 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,
Robert H. Graham
President
A Member of the AMVESCAP Group
m(1)(d)
AMENDMENT NO. 3
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Fifth Amended and Restated Master Distribution Plan (the "Plan"), dated as of July 1, 2000, pursuant to Rule 12b-1 of AIM Funds Group, 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:
"SCHEDULE A
TO
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(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 (or Class thereof) 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.
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS A SHARES SALES CHARGE FEE FEE
-------------- ------------ --- ---
AIM Balanced Fund 0.00% 0.25% 0.25%
AIM Basic Balanced Fund 0.10% 0.25% 0.35%
AIM European Small Company Fund 0.10% 0.25% 0.35%
AIM Global Utilities Fund 0.00% 0.25% 0.25%
AIM International Emerging Growth Fund 0.10% 0.25% 0.35%
AIM New Technology Fund 0.10% 0.25% 0.35%
AIM Select Growth Fund 0.00% 0.25% 0.25%
AIM Small Cap Equity Fund 0.10% 0.25% 0.35%
AIM Value Fund 0.00% 0.25% 0.25%
AIM Value II Fund 0.10% 0.25% 0.35%
AIM Worldwide Spectrum Fund 0.10% 0.25% 0.35%
|
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS C SHARES SALES CHARGE FEE FEE
-------------- ------------ --- ---
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%
AIM Worldwide Spectrum Fund 0.75% 0.25% 1.00%"
|
The Distributor will waive part or all of its Distribution Fee as to a Portfolio (or Class thereof) to the extent that the ordinary business expenses of the Portfolio exceed the expense limitation as to the Portfolio (if any) as contained in the Master Investment Advisory Agreement between the Company and A I M Advisors, Inc.
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: September 28, 2001
AIM FUNDS GROUP
(on behalf of its Class A and
Class C Shares)
Attest: /s/ JOHN H. LIVELY By: /s/ ROBERT H. GRAHAM
---------------------------- ----------------------------
Assistant Secretary Robert H. Graham
President
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m(1)(e)
AMENDMENT NO. 4
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Fifth Amended and Restated Master Distribution Plan (the "Plan"), dated as of July 1, 2000, pursuant to Rule 12b-1 of AIM Funds Group, 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:
"SCHEDULE A
TO
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(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 (or Class thereof) 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.
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS A SHARES SALES CHARGE FEE FEE
-------------- ------------ --- ---
AIM Balanced Fund 0.00% 0.25% 0.25%
AIM Basic Balanced Fund 0.10% 0.25% 0.35%
AIM European Small Company Fund 0.10% 0.25% 0.35%
AIM Global Utilities Fund 0.00% 0.25% 0.25%
AIM International Emerging Growth Fund 0.10% 0.25% 0.35%
AIM Mid Cap Basic Value Fund 0.10% 0.25% 0.35%
AIM New Technology Fund 0.10% 0.25% 0.35%
AIM Select Growth Fund 0.00% 0.25% 0.25%
AIM Small Cap Equity Fund 0.10% 0.25% 0.35%
AIM Value Fund 0.00% 0.25% 0.25%
AIM Value II Fund 0.10% 0.25% 0.35%
AIM Worldwide Spectrum Fund 0.10% 0.25% 0.35%
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MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS C SHARES SALES CHARGE FEE FEE
-------------- ------------ --- ---
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%
AIM Worldwide Spectrum Fund 0.75% 0.25% 1.00%"
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The Distributor will waive part or all of its Distribution Fee as to a Portfolio (or Class thereof) to the extent that the ordinary business expenses of the Portfolio exceed the expense limitation as to the Portfolio (if any) as contained in the Master Investment Advisory Agreement between the Company and A I M Advisors, Inc.
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: December _____, 2001
AIM FUNDS GROUP
(on behalf of its Class A and
Class C Shares)
Attest: By:
--------------------------- ----------------------------
Assistant Secretary Robert H. Graham
President
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m(2)(b)
AMENDMENT NO. 1
TO THE THIRD AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The Third Amended and Restated Master Distribution Plan (the "Plan"), dated as of December 31, 2000, pursuant to Rule 12b-1 of AIM Funds Group, 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 FUNDS GROUP
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ --- ---
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%
AIM Worldwide Spectrum 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 28, 2001
AIM FUNDS GROUP
(on behalf of its Class B Shares)
Attest: /s/ JOHN H. LIVELY By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary Robert H. Graham
President
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m(2)(c)
AMENDMENT NO. 2
TO THE THIRD AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The Third Amended and Restated Master Distribution Plan (the "Plan"), dated as of December 31, 2000, pursuant to Rule 12b-1 of AIM Funds Group, 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 FUNDS GROUP
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ ------- ---------
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%
AIM Worldwide Spectrum 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 FUNDS GROUP
(on behalf of its Class B Shares)
Attest: By: /s/ ROBERT H. GRAHAM
-------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
President
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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
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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
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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 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
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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 Basic Value A Shares 0.25 December __, 2001
AIM Mid Cap Basic Value B Shares 0.25 December __, 2001
AIM Mid Cap Basic Value C Shares 1.00** December __, 2001
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
---------------------
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(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
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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
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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 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
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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 Basic Value A Shares 0.25 December __, 2001
AIM Mid Cap Basic Value B Shares 0.25 December __, 2001
AIM Mid Cap Basic Value C Shares 1.00 December __, 2001
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
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*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
------------------------------------
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Print Name
The undersigned agrees to abide by the foregoing terms and conditions.
Date:
------------------------------ ------------------------------------
(Firm Name)
------------------------------------
(Address)
------------------------------------
(City) / (State) / (County)
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
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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 Mid Cap Basic Value 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 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%
------------------
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(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 Mid Cap Basic Value 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 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.
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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
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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.
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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 Mid Cap Basic Value 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 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.
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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 Mid Cap Basic Value
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 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.
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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)
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Shareholder Service Agreement 3
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
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Signature
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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
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Shareholder Service Agreement 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
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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
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Shareholder Service Agreement 5
Fund Fee Rate* Plan Calculation Date
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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 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
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Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
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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 Basic Value Fund A Shares 0.25 December __, 2001
AIM Mid Cap Basic Value Fund B Shares 0.25 December __, 2001
AIM Mid Cap Basic Value Fund C Shares 1.00** December __, 2001
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
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Shareholder Service Agreement 7
Fund Fee Rate* Plan Calculation Date
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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
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*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%.
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